SINGAPORE – Business and industry leaders have told a pre-Budget roundtable that local companies are concerned about rising costs and geopolitical uncertainties as they head into 2024.
But they added that as challenging as the environment is, the business community needs to stick to its transformation journey, while expressing hope for more Government support to help firms digitalise, upskill workers and adopt more sustainable practices and technologies.
Bukit Panjang MP Liang Eng Hwa, chairman of the Government Parliamentary Committee for Finance and Trade and Industry, struck a cautionary note when he told the roundtable on Jan 11 that it will get harder to grow Singapore’s economy amid domestic constraints and a grim external environment.
As Singapore Manufacturing Federation president Lennon Tan noted at the event organised by the Institute of Singapore Chartered Accountants: “Costs keep stacking up.”
Rising energy prices have hit companies – especially the food manufacturing sector – hard, he said.
Logistics costs have gone up amid geopolitical disruptions. Most recently, said Singapore Logistics Association chief executive Oh Bee Lock, attacks by Houthi rebels in the Red Sea resulted in shippers having to take a route that adds 10 days’ travel time.
And the cost of hiring will also rise amid a tight labour market, said panellists.
For example, Singapore Computer Society president Sam Liew cited growing competition among employers for limited tech talent.
The outlook is such that costs are not likely to come down, said Mr Liang, the roundtable’s co-chair, who urged businesses to find ways to strengthen their revenues to mitigate rising prices.
The business and industry leaders aired suggestions on how the Feb 16 Budget could help companies transform in an operating environment complicated by deglobalisation, the rapid rise of new disruptive technologies and an ageing workforce.
The Government could help firms become more productive through digitalisation and the adoption of technology like artificial intelligence, said Mr Tan and Mr Oh.
Mr Sutat Chew, chairman of the listed-company association SGListCos, noted that the Government has many grants and incentives that support industries, but which may not be used to their fullest.
He suggested that the qualifying criteria for such grants could be made tighter – supporting more significant and transformative initiatives – but also more generous, thereby making their impact more targeted.
The panellists also said more support for equipping all segments of the workforce with new skills in the face of technological disruption would be helpful.
PwC Singapore partner Julia Leong said this could include older workers, who have a wealth of experience that can be tapped.
Mr Irvin Seah, who heads DBS Bank’s Asian Insights Office, noted that the rapid pace of technological advancement affects not just companies but also older Singaporeans, and it is important to ensure they do not fall through the cracks.
Mr Liew said the Budget could help support schools, to ensure their curriculum encompasses the latest developments in the technology sector and is better integrated with foundational courses.
The Government could also set up nationally-recognised courses and certification for new and in-demand skills such as sustainability, said KPMG Singapore partner Loh Yee Chuan.
This would help workers looking to switch careers acquire the necessary competencies. It would also aid companies in matching with qualified individuals, he added.
Companies could also be given assistance to embark on their sustainability journeys.
“Sustainability does cost,” Straits Times associate editor and senior columnist Lee Su Shyan pointed out, underscoring the need for more Government support on this front.
Mr Tan of the Singapore Manufacturing Federation said small and medium-sized enterprises would benefit from practical assistance to this end – such as through energy-saving equipment, and measures to reduce their carbon footprints.
More help for firms to comply with sustainability-related export requirements, such as the European Union’s carbon border adjustment mechanism, would also be useful, as most SME manufacturers are unsure on how to approach this, he added.
