UOB: One-Third Of SMEs Have Negative 2020 Outlook
One in three small-to-medium-sized enterprises in Singapore held a negative outlook for their business in 2020, according to a survey by UOB.
Just under half (46 percent) of the 615 SMEs surveyed (with annual revenue of less than S$100 million or $74 million) had positive outlooks while the remainder were neutral. Business services sectors had the most positive outlook compared to the least positive ones held by the wholesale and real sectors. Top headwinds highlighted include concerns of a slowdown in global demand (23 percent), U.S.-China trade war impact (18 percent) and the strengthening Singapore dollar (17 percent).
The key areas of focus highlighted by respondents include boosting productivity (51 percent), cutting costs (43 percent) and developing new revenue lines (42 percent).
SME Digitalization
Technology continues to be a major driver of efficiency with 65 percent of SMEs already using digital solutions for at least one area of their business, according to the survey. Most commonly digitalized processes include accounting (46 percent), payroll (45 percent) and marketing (38 percent).
Moving forward, more investments in tech are expected with 38 percent of respondents saying they would digitalize more processes in 2020. The top three areas for digitalization are expense management (24 percent), customer relationship management (24 percent) and sales (23 percent).
Specifically, on electronic payments, 86 percent of SMEs indicated plans to increase usage. Of the 14 percent that had no such plans, the major concerns cited include acceptance from customers and suppliers (33 percent), security (33 percent) and access to accounts by employees (31 percent).
Sustainability
Greater long-termism is increasingly being embedded in SME thinking with the UOB survey indicating more focus on sustainability (59 percent) especially from firms in the business services, infocommunications and technology, and transport and logistics sectors.
Existing or planned initiatives include greater efficiency in resource usage (47 percent), improved polices and processes for better governance (43 percent) and usage of energy-efficient equipment and technologies (40 percent).
