Singapore businesses recognise the importance of value creation and innovation to develop Singapore brands, according to the KPMG's pre-Budget 2016 poll.
More than half of poll respondents surveyed said that investing in innovation and productivity improvements is one of the top three strategies to grow their businesses.
Global economic uncertainty, rising cost pressures and measures to curb foreign labour inflows are the reasons that led to businesses in Singapore starting 2016 with a pessimistic outlook.
Sixty percent of SME respondents said that the government's focus on improving productivity has benefitted their businesses. About half of all respondents said that flexibility and greater incentives can spur value creating activities like internationalisation, brand building and innovation.
"As Singapore progresses up the economic ladder, we need to shift from simply adding value to creating value in order to develop a strong core of Singaporean businesses to compete globally at the higher end of the value chain," said Tay Hong Beng, head of Tax at KPMG in Singapore. "There needs to be a Singapore-centric talent pool, not only just having technical skills but also having the ability to innovate, lead and manage in the face of a weaker economy."
Fifty percent of those surveyed were not optimistic about their business prospects in 2016, compared with 20 percent that had an optimistic view.
Eighty-seven percent said innovation and value creation are within the top three areas of importance over the next 5 years. Fifty-one percent said that the current Productivity and Innovation Credit (PIC) scheme is not sufficiently effective and should be more calibrated to different developmental stages in a business' lifecycle.
Eighty-one percent said that there was insufficient recognition and support for value creation activities; and 85 percent of local SME respondents agreed with this statement.
Businesses recognise a need for greater focus on value creation and innovation to develop Singapore brands, however, the current incentive structure still favours firms adding value rather than creating value.
"The economy now needs a strong core of Singaporean businesses which are anchored in the country while expanding into overseas markets to capture growth. More efforts should be made to promote the perception of 'Made in Singapore' products and services as being high-tech, high-quality and high-value. This should be done both locally and overseas," added Beng.
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