For local companies in Singapore international trade is creating more revenue than local trade. These are the findings from recently published research and the annual survey of International Enterprise*(IE) Singapore. Results show that internationalisation is the key to driving growth. Results from 700 companies were analysed. Revenues grew faster from overseas, 4.2% overseas revenue growth compared to the 1.3% overall revenue growth. Overseas trading revenues were a higher percentage of the overall trading figures, compared to local revenue, for small to medium enterprises, at 53% (50% in 2015). Findings also show that firms seeking to grow their overseas trade reported their premier markets are Myanmar and Vietnam.
*(International Enterprise Singapore or IE Singapore, is a statutory board under the Ministry of Trade and Industry of the Singapore Government. Formerly known as the Singapore Trade Development Board, IE Singapore is the lead agency promoting international trade and partnering Singapore companies in going global).
Further details from IE Singapore confirm that with over 450 projects globally in 2016, the majority were in China and Southeast Asia. This ties in with comments from Standard Chartered Bank, who are confident that firms should remain “very keen to be open to trade and to business opportunities in these areas”. More recently, following the US election, there are growing concerns as to potential protectionist measures and the risk of a trade war between the US and China.
Lee Ark Boon the CEO of IE Singapore said, “For 2017, companies are facing greater uncertainty, but (from the) Government’s perspective we want to continue to ensure that we have the support and where possible increase the support for them to manage the risks and manage the uncertainties. This includes looking at markets beyond a country, going much deeper.”
Companies in the survey said they were targeting new markets and new business sectors. Notably the mention of digital platforms and the digital economy. In the region there is a steady growth in the proportion of people living in urban areas. IE Singapore sees more opportunities for infrastructure and digital economy projects. Indeed, the agency will step up their support for companies to help them win and supply these projects.
In 2016 IE Singapore helped 37,000 companies via various schemes. In terms of grants, more than 10,000 companies benefited from total allocations of S$73.4 million.
Together with the growth of Singapore via international trade, the agency noted that there is a strong trend towards jobs that are for professionals, managers, executives and technicians (PMET). Approximately six in 10 of jobs focussing on international trade were PMET positions, compared to roughly five in 10 for domestic focused jobs.
Direct investments overseas by Singapore (DIA) grew 2.5 per cent year-on-year (S$636.8 billion as of year-end 2015). Asia accounted for the largest percentage with 54 per cent. Growth in investment funding was driven by Asia, especially the emerging markets in India, Vietnam and Myanmar. You may have seen the blog last autumn from FocusCore in Myanmar
FocusCore operate across ASIA in Singapore, Japan, Myanmar and Hong Kong. Our focus is to help companies prosper in these growing economies, offering a broad range of corporate and recruitment services, helping companies start new operations overseas and or expand nationally.
Comments from a Senior Director of the IE neatly confirms the positive findings of the IE Singapore survey, “The bustling South-east Asian market and its heavy demand for infrastructure and consumerism will likely ensure the region remains appealing to Singapore firms that want to invest abroad”.