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If you’re old enough to remember Y2K, you’ll recall the general fear that technology would somehow fail us at the stroke of midnight, crashing markets and disrupting business systems.
[pullquote]Our research reveals that digitally proficient firms tend to achieve more revenue per employee compared to those that resist or delay digitisation.[/pullquote]
It’s almost 20 years since that millennial turning point. A different kind of transformation has occurred – and along with it came a general air of excitement. In fact, across Southeast Asia, 52 per cent of people under the age of 35 believe technology will improve their job prospects, while 67 per cent believe it will help increase their income. These were the results of a survey of 64,000 ASEAN youths by the World Economic Forum.
While Singaporean youths in the survey exhibited less optimism compared to some of their ASEAN counterparts, the country remains the region’s technological and innovation hub. It’s also an entrepreneurial place, with more than 50,000 businesses being launched in the city-state every year.
As technology-led business transformations continue to penetrate every aspect of our professional and private lives, here’s my take on what to expect for the year ahead.
Cloud adoption for entrepreneurs over 40
Our research reveals that digitally proficient firms tend to achieve more revenue per employee compared to those that resist or delay digitisation. We’ve also found that SMEs in Singapore that use cloud-based accounting tools are able to shorten the period in between invoicing and getting paid by as much as thirteen days, enabling them to get paid faster. Improved cash flow is something that would benefit all businesses and will be a great driver of technological adoption amongst older or more traditional entrepreneurs.
As the immediate and long-term benefits of technology adoption stack up against the initial inconveniences, I foresee a majority of entrepreneurs over the age of 40 will adopt cloud technology by 2020. These tangible benefits, along with increased competition and government funding for SMEs that adopt digital processes, will help older entrepreneurs find success in the cloud.
Millennial entrepreneurs changing the face of business
[pullquote]… an increasing percentage of our small business clients in Singapore are businesses founded by millennials.[/pullquote]
Of late, we’ve observed that an increasing percentage of our small business clients in Singapore are businesses founded by millennials. We can only expect this trend to continue, given the country’s thriving startup ecosystem and a more educated and tech-savvy workforce.
These millennial entrepreneurs are changing the face of business, focusing more on employee management than other generations of business owners did. A study by HSBC also found that Singapore’s millennial entrepreneurs are more self-reliant, with fewer of them having started their businesses with the help of their parents’ money compared to their older peers. The same study also noted that millennial entrepreneurs are aligning their business models to personal values and social causes. Personal development has taken precedence over personal wealth and family expectations.
[pullquote]… millennial entrepreneurs are aligning their business models to personal values and social causes.[/pullquote]
The rise of millennial entrepreneurs could be partly attributed to a more educated generation. Singapore’s 2017 census recorded the highest percentage of residents over the age of 25 who have attained university and diploma/professional qualification – at 30.7 per cent and 14.6 per cent, respectively.
Beyond the lecture halls, these tertiary educational institutions expose students to a network of peers and mentors. For example, a growing number of universities, such as the National University of Singapore and the Singapore Management University, offer incubators and funding support for qualified student projects.
Within the broader startup ecosystem, budding entrepreneurs can also take advantage of the extensive startup programmes, incubators, workshops and even pitching competitions to widen their network and gain access to investors and mentors to spearhead their growth.
Governments will have a greater impact on SMEs
[pullquote][SMEs] make up 99 per cent of the businesses locally and contribute 43 per cent of the nation’s GDP.[/pullquote]
The Singapore government has been active in providing grants and tax incentives to SMEs, acknowledging their role as the lifeblood of the economy in that they make up 99 per cent of the businesses locally and contribute 43 per cent of the nation’s GDP.
Many of the grants in recent years have focused on helping SMEs adopt digital processes and systems. In April 2018, the government established Enterprise Singapore to support local businesses, especially in their efforts towards digital transformation and overseas expansion.
One key aspect of digitisation is the move towards being a cashless industry. The government launched a roadmap in June 2018 to make Singapore a global accountancy hub within five to ten years. The roadmap includes a $2.4 million budget to help SME accounting firms adopt baseline technologies in practice management, tax, and internal auditing. It also includes a national e-invoicing framework, with the potential to offer seamless cross-border e-invoicing.
[pullquote]The government launched a roadmap in June 2018 to make Singapore a global accountancy hub within five to ten years.[/pullquote]
With these efforts, the Singapore government is steering SMEs towards cashless payments. In fact, it aims to make the country cheque-free by 2025. An OCBC poll estimates the two in three Singapore SMEs will be cashless by 2023.
With fintech firms playing a major role in digitisation, SMEs will be able to gain more access to loans. Fintech firms offering alternative finance have received increased support from the Monetary Authority of Singapore (MAS), and even from traditional banks.
Government support will also influence SMEs in leveraging international trade opportunities, propelled by programs like Enterprise Singapore’s Market Readiness Assistance grant and MAS and IMDA’s hybrid business data and digital solutions hub. This also reflects ASEAN’s Vision 2020, which aims to achieve closer economic integration within the region and make it easier for SMEs to expand beyond their countries’ borders.
Let 2019 be the turning point for SME owners
If you haven’t implemented key digitisation practices like cloud computing and automation, the time to do so is now. Take advantage of the government’s drive for technology adoption and innovation in business, as well as its support of SMEs.
If you’ve already adopted cloud and automation technology, use the amount of time the technology has saved you to focus on growing your business. This includes developing further products or services, adding value to your customers, and maybe even expanding beyond Singapore’s shores.
2019 will be a turning point for many businesses, especially in the area of technology adoption. Once you implement the digital solutions that are best fit for your business, 2020 will be the year to reap the fruits of your labour.
The article has been updated to reflect that SMEs make up 99 per cent of the businesses in Singapore, not that they employ 99 per cent of the workforce in Singapore.