Business Closures due to COVID-19 Pressures and Support for Companies for Post-crisis Growth

12 Dr Wan Rizal asked the Minister for Trade and Industry (a) how many companies have since closed down due to pressures from the COVID-19 pandemic; and (b) what are the current and future efforts to support local firms for post-crisis growth to maintain our status as an international business hub.

The Minister of State for Trade and Industry (Ms Low Yen Ling) (for the Minister for Trade and Industry): Over the last two years, an average of around 3,840 firms were deregistered each month, similar to the period 2017-2019, before the COVID-19 pandemic. On the other hand, an average of more than 5,000 new firms were registered each month over the last two years, reflecting an increase in the total number of businesses operating in Singapore, despite the impact of the COVID-19 pandemic.

In the last two years, the Government has committed substantial resources to help our businesses weather the immediate impact of COVID-19. We are also helping our businesses prepare for post-COVID-19 recovery and continuing to enhance Singapore's position as a business hub in several ways.

Firstly, we are strengthening both our physical and digital connectivity. For example, we are gradually and carefully reopening our borders to more countries through arrangements such as the Vaccinated Travel Lanes (VTLs). Our ports are kept operating throughout the pandemic to ensure supply chain resilience. We will continue to enhance both our air and sea connectivity.

The Government is similarly extending Singapore's digital connectivity by establishing a network of Digital Economy Agreements (DEAs) with like-minded partners. We are also investing in digital infrastructure and capability building for our businesses and workers to access such opportunities. For example, the Grow Digital initiative helps SMEs tap on established e-commerce platforms to better access global markets, while the Enterprise Development Grant (EDG) encourages our SMEs to transform and strengthen their capabilities. In addition, we are partnering with industry stakeholders in this endeavour. An example is the SGTraDex, which is a common data infrastructure that enables our businesses to transit into the digital domain. It also builds a stronger and more robust supply chain ecosystem for international trade flows.

Secondly, we are supporting our businesses in capturing new and emerging opportunities, such as those in the green sector. As part of the Singapore Green Plan 2030 announced earlier this year, we will help our enterprises and workforce harness sustainability as a competitive advantage, and develop innovative solutions for the green economy. These include, amongst others, carbon trading and related services, low-carbon solutions, green finance, and green infrastructure. Enterprise Singapore recently launched the Enterprise Sustainability Programme which supports businesses, especially SMEs, to build capabilities and capture new opportunities in this exciting space.

Thirdly, we are helping businesses transform for the future economy, sector by sector. The Future Economy Council chaired by Deputy Prime Minister Heng is currently refreshing the Industry Transformation Maps (ITMs) to meet the accelerated changes brought about by the COVID-19 pandemic. For each of the 23 ITMs, we are working with our tripartite partners, including the private sector to update our sectoral strategies to seize new opportunities, as well as to improve productivity and wages of our workers through digitalisation, innovation, internationalisation, upskilling and job redesign.

These are the fundamentals which will underpin our competitiveness and ensure that Singapore remains as a global-Asia node for technology, innovation and enterprise. We are confident that through close partnership with Singaporeans as well as the business community, we will be able to emerge stronger together.

Mr Speaker: Dr Wan Rizal.

Dr Wan Rizal (Jalan Besar): Thank you, Mr Speaker. I thank the Minister of State for the very comprehensive reply. Can the Minister of State give us a sense of the growth outlook across the sectors, especially the sectors where business formations are taking place? We have heard about digitalisation and the formation of DEAs and how it would help Singapore. Could you elaborate a little bit more about MTI's plan to grow the capabilities and the potential of enterprises in sustainability or even in the green economy?

Ms Low Yen Ling: Mr Speaker, I want to thank the Member, Dr Wan Rizal, for his two supplementary questions.

First, he asked about the growth outlook by sector. Growth will continue to be driven by outward-oriented sectors, like manufacturing, wholesale trade, finance and insurance and information and communications technology (ICT). The recovery in tourism related, aviation related or consumer-facing sector is projected to be gradual, in comparison.

He asked about the business formation numbers in sectors. Let me just give him a bit of insights to this. Business formations continue to flourish, in spite of the COVID-19 crisis. Earlier on, I cited the numbers, the formation number and the number of firms that closed. More new businesses have started compared to the number of businesses closed. Between March 2020 and September 2021, over this one-and-a-half year period, a total of 73,036 business entities have ceased while 103,585 business entities have formed. So, again, more business formation numbers.

In the same period, he asked about sectors, the sectors with the largest number of new businesses formed included professional services, wholesale trade and retail.

His second supplementary question is on sustainability. I have cited about digitalisation, internationalisation, innovation; and he correctly pointed out the sustainability is going to be important as a competitive advantage for our SMEs. And indeed, we are encouraging our SMEs to integrate sustainability into their business, into their business process as a competitive advantage and to grow their capabilities in the new economy by tapping on the newly launched Enterprise Sustainability Programme. It was launched by Minister Gan Kim Yong about a month back on the 1 October. It is a $180 million-dollar scheme. So, what does it entail?

The Enterprise Sustainability Programme supports our SMEs in a few areas: (a) in sustainability training; (b) capability development; and (c) product development. And also, in the month of October, ESG launched the Enterprise Financing Scheme–Green which will then catalyse funding for our SMEs to develop green solutions and technology. The Enterprise Sustainability Programme does not just support our SMEs at the enterprise level. It is very important for us to also take a sectoral view and an ecosystem-wide approach.

So, MTI and ESG will certainly work very closely with the trade associations and chambers (TACs), industry partners, to develop a vibrant sustainability ecosystem to support our SMEs in their sustainability efforts, from capability development to product development. At the same time, taking an ecosystem-wide approach to leverage key enablers like financing, certification, training and other sustainability services.

So, I want to use the opportunity to assure the Member Dr Wan Rizal and the House that the Government is fully committed to support the growth and the future of our SMEs in the post-COVID-19 recovery. We will not let up our support. In fact, we will continue to support our SMEs to adapt and develop their businesses to seize new opportunities, whether in internationalisation, digitalisation or sustainability, and other areas.