2007 SME DEVELOPMENT SURVEY FOCUS ON COST AND COMPETITION

Survey is the SME community's voice on decisions that affect them

This year’s SME Development Survey will focus on two issues of crucial importance to SMEs - cost competitiveness and domestic competition.

The annual nationwide poll of SMEs is conducted by DP Information Group (DP Info) - Singapore leading provider of credit and business information services - and canvasses the views of SMEs on a range of issues that affect them.

THEME AND NEW SURVEY CHALLENGES

The theme of this year's survey is SME Challenges and Competitiveness for Continued Growth. It will ask SMEs to share their views on the issues at the heart of operating a viable enterprise in Singapore and the region, including:

CREDIT RATING PERFORMANCE

· Domestic cost competitiveness, including the impact of rising rental and manpower costs, the GST increase and the reduction in corporate tax rate;

· Human resource issues, including the difficulties SMEs face in recruiting and retaining good staff;

. The adoption of technologies and process automation to give SMEsa competitive edge;

. Expanding into new markets overseas, including the major obstacles that SMEs need to overcome in order to succeed; and

. Access to funding options to drive business growth.

"Over the last few years the strong domestic economy has allowed SMEs to record impressive growth. However, our SMEs are facing increased competition from international companies as well as local firms," said Ms Chen Yew Nah, Managing Director of DP Info.

"This year's survey examines the domestic issues that affect an SME's ability to compete successfully overseas, including costs, tax rates, technology and human resources."

"It is through the strength of their home base that Singapore SMEs have both the financial and operational confidence to compete internationally," Ms Chen said.

IMPACT OF FINDINGS

Ms Chen said the SME Development Survey has established itself as the pre-eminent vehicle by which SMEs can have a say in issues that affect them.

The findings of the annual SME Development Survey has been used by government policy-makers to formulate initiatives that benefit SMEs. The survey is also used by the private sector companies such as banks to better structure their SME offerings."

Last year's survey identified a call from the SMEs for greater government assistance to enable them to be more competitive, with 38% of SMEs requesting for more government assistance in business support related areas.

The SME Development Survey identified that many SMEs were not aware of the benefits of Free Trade Agreements (FTAs). On a positive note, the 2006 survey showed the understanding of FTAs had increased to 82%, due to IE Singapore's efforts in working through multipliers such as trade associations, law and accounting firms as well as holding numerous outreach seminars for the SME community

Previous surveys found 37% of SMEs have difficulties in meeting the bank's requirements for pledging collaterals when trying to gain access to funding. Fifty-one percent (51%) of SMEs indicated that they would like to see a shift towards non-collateral based financing. In response, in March 2007 HSBC introduced the first-in-market "Fast Track" receivables financing package for SMEs, designed to provide this community with an alternativ to asset-based financing.

GOVERNMENT AND INDUSTRY SUPPORT

Mr Png Cheong Boon, Deputy Chief Executive of SPRING Singapore highlighted technology and human capital management as two key drivers that contribute to SMEs' next phase of growth.

SMEs must now build up distinctive competencies and use competitive strategies to differentiate themselves in order to survive and thrive in today's dynamic business environment. It is timely that this year's survey examines the critical issues which affect their ability to compete successfully," Mr Png said.

Mr Ted Tan, Deputy Chief Executive Officer of International Enterprise (IE) Singapore said previous surveys had identified competition as a major issue for SMEs venturing business overseas.

"When an SME expands into a new market, they naturally expect to face some challenges. The question posed is how companies are meeting the challenge of competition. SMEs need identify their Unique Selling Propositions (USPs) and conduct in-depth market and industry research in order to successfully expand overseas. This year's survey will provide valuable information on how SMEs are responding to today's increasingly competitive business environment for us to better understand their needs so as to provide the appropriate support," Mr Tan said.

The Survey continues to have the strong backing of three government agencies – SPRING Singapore, IE Singapore and iDA.

The SME Development Survey has strong support from the private sector with HSBC, Standard Chartered Bank, BDO Raffles, Microsoft and MYOB all agreeing to sponsor the survey.

SURVEY PERIOD, RESULTS AND RESPONDENT INCENTIVE

The 2007 SME Development Survey will be conducted over a 3-month period and the results and analysis will be announced in September 2007.

More than 10,000 SMEs will be invited via mail to participate in this year's survey.

In addition to submitting the questionaire by mail, respondents may also choose to respond electronically via http://smesurvey.dpgroup.sg

Copies of the survey can be downloaded at:

www.spring.gov.sg

www.iesingapore.com

www.ida.gov.sg

To encourage participation respondents will receive a free credit rating of their company, valued at $100. Credit ratings are an invaluable tool to demonstrate a company's financial standing to customers, suppliers and business partners.