SGTech's Recommendations for Budget 2022

SGTech's Recommendations for Budget 2022 - A Summary

As the association for the tech sector representing 1,000 companies, SGTech engaged over 200 companies in Q3 and Q4 of 2021 to solicit recommendations for Budget 2022. The following recommendations capture the common requests made by companies and the details were submitted to the Ministry of Finance in October 2021.

A. Overall business sentiments and key concerns

Business sentiments

Cost concerns are casting a pall on businesses.
Movement restrictions have impacted the population of EP holders, limiting the ability of businesses to deliver on existing projects.
Movement restrictions have also impacted international tenders, business trips become prohibitive in duration, slowing decision making and contracts.

Key concerns

The tech talent crunch has a stranglehold over businesses, raising operating costs and causing a drag on their ability to chase new opportunities.
SMEs who are surviving hand-to-mouth struggle to keep up with trends in their own industry and do not have the resources to figure out digital transformation on their own.
Grant funding using old methods to identify solutions and disburse grants are unsuited to the current VUCA environment. We must adapt our methods.

B. Recommendations

Part 1: Addressing the Tech Talent Crunch

a. Employment Pass (EP) Policy

The shortage of tech talent has been well documented. As a country that has ambitions to be a global tech node, we need to continue to allow more foreign inflow into Singapore not just for the employers willing to pay top dollar but also for our start-ups and SMEs who may not be able to pay as much.

Recommendation 1: Implement skills-based hiring for EP to ensure a strong pipeline of global tech talent to fill specific essential roles
Recommendation 2: Relax restrictions on EP to keep immediate projects going

b. Apprenticeships

We recommend modelling after the European model of apprenticeships where industry-led apprenticeship programmes groom a workforce with relevant and job-ready skills.

Recommendation 3: Groom a job-ready workforce through apprenticeships

c. Specifying skills not qualifications for Government ICT roles

Recommendation 4: Government ICT roles to specify either diploma or ITE qualifications as minimum education criteria for ICT roles instead of a university degree

d. Encouraging talent to flow to SMEs & Start-ups

Recommendation 5: Manage the perceived risk of working in startups and SMEs through a centralised hiring platform backed by the government

Part 2: Support for Companies

a. More holistic approach to upgrading VS piecemeal solutions

SMEs need more end-to-end support rather than quick-fix solutions that may not gel with business strategy and skills. As such there is a need to think more holistically about interventions:

Recommendation 6: Create a holistic programme for tech SMEs marrying business strategy with branding/marketing strategy and execution
Recommendation 7: Relook other capability areas to pursue holistic upgrading rather than piecemeal solutions

b. Internationalisation

With the opening of borders, there is a general need to be more aggressive on internationalisation to capture opportunities.

Recommendation 8: Enhance ESG’s Market Readiness Assistance (MRA) grant to provide longer duration support for B2B and allow flexibility on support for countries within a region
Recommendation 9: Place a bigger focus on introductions to prospects for business development
Recommendation 10: Involve more sectoral TACs, especially the tech association (SGTech) in DEA negotiations

c. Government Procurement

There needs to be a continuous conscious effort by government agencies to make Government IT projects accessible to SMEs.

Recommendation 11: Scope government procurement projects smaller to allow experimentation
Recommendation 12: Carve out parts of large procurement projects for small companies to participate

d. Digital Transformation

Our approach on digital transformation has been solution-centric. Despite years of efforts, the digital maturity of SMEs is still lagging. There is a need to assist SMEs holistically on this journey to also incorporate strategy and skills besides solutions.

Recommendation 13: Set Up Digital Transformation Centre @SGTech to Empower SMEs in Digital Transformation holistically
Recommendation 14: Upskill Middle manager Layer in Disrupted Industries to Drive Transformation

e. Improving Grant application experience and model to improve experience and innovation.

Recommendation 15: Explain to companies the reasons for grant approval rejection to help them succeed subsequently
Recommendation 16: Review areas where government processes are at odds with business realities
Recommendation 17: Implement a higher tier of PSG funding support for innovative or early lifecycle solutions
Recommendation 18: Self-organising committees using a venture fund concept to quickly distribute funding for innovations with potential

Part 3: Support for TACs

As we ramp up our economy for growth, there is a need for special consideration for the next 2-3 years to assist the industry through multipliers such as the trade associations and chambers (TACs). Enhanced support for TACs is needed to help the broad base of enterprises.

Recommendation 19: Heightened support for the LEAD programme
Recommendation 20: Support TACs’ digital transformation through PSG or a digital transformation grant

Read The Business Times story on SGTech’s recommendations submitted to the Ministry of Finance for Budget 2022 (gated content).

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