NUS Entrepreneurship Centre

IT Usage for Direct Exports IT Usage for Direct Exports by SMEs: Commentsby SMEs: Comments

International SeminarInternational SeminarInformation Technology for Development of SMEs Information Technology for Development of SMEs

in East Asia and Latin Americain East Asia and Latin America

Santiago de Chile, 23-24 November 2004Santiago de Chile, 23-24 November 2004

NUS Entrepreneurship Centre

Full exploitation of IT for exportsFull exploitation of IT for exports

•Where SMEs have achieved basic IT usage, they often do not utilize them fully. Eg, they may have internet access, but they only use it for basic operations such as e-mail and information search

•This is true of SMEs in Singapore. In 2002, 94% of SMEs had internet access. Almost all use it for e-mail and information searches. Much fewer use it for advertising/marketing, providing information on their own websites or for e-commerce.

•One challenge for increasing exports in SMEs is to increase e-commerce, and implement the necessary infrastructure. As of 2002, none of the companies surveyed had implemented e-commerce secure infrastructure

NUS Entrepreneurship Centre

Human capital resourcesHuman capital resources

•Another common issue is the need for human capital resources. Overall, there insufficient human capital in SME exporters, especially in the more traditional industries

•Again, this is true of Singapore. The main barrier to SMEs adopting wireless IT is their concern about acceptance of the technology by their employees.

•Case studies bear this out: SMEs cited staff adjustment as their biggest challenge they faced in adapting to new IT

•There is a need to increase the level of human capital through education and training. But for existing workers, especially older workers with lower education levels, more is needed to help them adapt to new IT

•Case study: In addition to training, also have regular talks with staff, explain to them the need for IT, find out their concerns. The adjustment process takes time (up to one year)

NUS Entrepreneurship Centre

SMEs in SingaporeSMEs in Singapore•Increasing Singapore SMEs’ exports is a key issue because Singapore has a small domestic market. E-commerce development is especially important for them to to expand their markets beyond Singapore.

•The government has a comprehensive set of policies to assist SMEs in all areas, including their IT development.

•However, public policy in Singapore is still geared towards MNCs and to high-tech start-ups. SMEs in low-technology industries receive less policy attention, but also need help to upgrade their IT resources.

•Assistance needed by SMEs:– education to know which forms of IT best meets their needs and how to fully exploit them; –financial and technical assistance to acquire new IT and integrate it with their existing systems; –assistance in manpower development.

NUS Entrepreneurship Centre

Specific Government Initiatives: SME 21 Specific Government Initiatives: SME 21 Master Plan and LETASMaster Plan and LETAS•The main policy plan for the support of SMEs is the SME 21 Master Plan

•A 10-year strategic plan, launched in January 2000. Its aim is to build the capabilities of SMEs to enhance their contribution to Singapore's competitiveness and economic growth.

•One of three targets to achieve by the year 2010: Quadruple the number of local SMEs with e-commerce transactions from 8,000 to 32,000. Achieving this means that one-third of local SMEs will have overcome the limitation of the small domestic market by exporting to the global market.

•The main scheme helping local SMEs upgrade their IT is LETAS (Local Enterprise Technical Assistance Scheme): Subsidizes the cost (up to 50%) of engaging IT consultants for IT implementation and e-commerce projects.

•E-commerce consultancy includes: initial project requirement investigations, project specification & design, project development and implementation, user acceptance test, post-implementation and review.