Tangible Outcomes of Grants Provided Under SMEs Go Digital

11 Mr Liang Eng Hwa asked the Minister for Communications and Information (a) what are the tangible outcomes of the grants provided under the SMEs Go Digital programme since it was introduced; (b) how has it helped SMEs in terms of value adding and improvements in productivity; and (c) whether there will be further improvements to enhance the effectiveness of the grants.

The Senior Minister of State for Communications and Information (Mr Tan Kiat How) (for the Minister for Communications and Information): Mdm Deputy Speaker, over 88,000 small- and medium-sized enterprises (SMEs) have benefited from the SMEs Go Digital programme since it was launched in 2017. Between 2018 and 2022, the Annual Survey on Infocomm Usage by Enterprises found that firms which had adopted at least one digital technology increased from 78% to 93%.

Earlier this year, the Infocomm Media Development Authority, or IMDA, which administers the SMEs Go Digital programme, worked with the Ministry of Trade and Industry (MTI) to evaluate the scheme's impact. The report found that SMEs Go Digital grants have added value to SMEs and improved their productivity. For instance, firms which adopted the Productivity Solutions Grant, or PSG, saw overall increases in Value Add Per Worker and revenue. In addition, IMDA's survey showed that 85% of participating SMEs reported time savings, and 75% said digitalisation helped them to alleviate manpower challenges.

The Ministry of Communications and Information (MCI) regularly reviews the SMEs Go Digital programme to ensure that it remains relevant to firms' needs. In 2021, we launched the CTO-as-a-Service, which is a one-stop platform that helps SMEs tap on the available support under the SMEs Go Digital programme more effectively. Besides a wide suite of digital solutions and subsidised digital consultancy for SMEs, the platform also brings together initiatives by SkillsFuture Singapore, the Cyber Security Agency, the Personal Data Protection Commission and other Government agencies to help firms improve their capabilities.

MCI has also progressively refreshed our Industry Digital Plans, or IDPs, which help to curate the support provided under the SMEs Go Digital programme to meet specific needs in over 20 sectors. This year, we will be refreshing the Retail and Security IDPs and launching the Legal IDP. These will feature a refreshed digital solution roadmap as well as updated roadmaps for digital skills, cybersecurity and data protection measures to better support our SMEs.

That said, we know that the digital landscape is fast evolving, and our work to help SMEs reap the benefits of digitalisation will have to continue. As shared at MCI's Committee of Supply debate earlier this year, we will be developing the Digital Enterprise Blueprint over the coming months to identify new challenges faced by SMEs and outline the Government's approach to help SMEs thrive in our growing digital economy.

Mdm Deputy Speaker: Mr Liang Eng Hwa.

Mr Liang Eng Hwa (Bukit Panjang): Thank you, Madam. I read the feature articles on the impact evaluation for the SMEs Go Digital Programme and it was recently included in the Economic Survey Report. It was mentioned that whenever there are tailored solutions, the outcome tends to be better for the SMEs. So, I would like to ask the Senior Minister of State whether in the Digital Enterprise Blueprint that MCI is working on now, are there going to be more emphasis on tailored solutions.

My second supplementary question is: it is good that we have all these improvements and outcomes, better value-add to the workers and so on. I want to ask whether the good outcomes are also because of the COVID-19 period where enterprises tend to want to adopt digital means because of the restrictions and whether this momentum will continue now that we are post-COVID-19.

Mr Tan Kiat How: Mdm Deputy Speaker, I thank Mr Liang for his two supplementary questions.

On the first question about the benefits being greater for the SMEs when they use tailored solutions, I will make a couple of observations.

First, it is our observation as well. It is really because of the state of our digitalisation and transformation efforts in our economy across industries and companies. There is no sector in Singapore that is not touched by digitalisation. However, having said that, the low-hanging fruits or the easy benefits of using digital technology or solutions are largely reaped.

It is how firms can better use digital technologies by going deeper, transforming their business operations – transforming not just their customer-facing operations, but also how they work with their vendors, partners and supply chains in the broader ecosystem they are in.

Therefore, we have to look at sector by sector. The SMEs in the manufacturing sector will have very different needs from the SMEs in the retail, hospitality or legal profession. That is the reason why we work very hard with the trade associations and partners to develop Industry Digital Plans so that the technology roadmaps, the digital skills recommendations and solutions that are available to those SMEs would be specific to their needs.

Building on this, the Digital Enterprise Blueprint will look at how we can help our companies, including SMEs, deepen their digitalisation and tap on emerging new technologies, like generative AI, cloud-based solutions, while at the same time making sure that they are cybersecure and can also protect their customer data. You can invest a lot in digital solutions but if it is not cybersafe and is subject to cybersecurity attacks – and many of our SMEs are not a target but collateral damage – all the hard work and investment over the many years can be wiped out overnight. So, even as we help our companies digitalise, we will help them to be cybersecure. These will be some of the focus areas for the Digital Enterprise Blueprint over the coming months.

The second point that Mr Liang asked was about whether COVID-19 has helped to accelerate the pace of digitalisation. Anecdotally, we hear many businesses say that, thankfully, because of their early investment in digital technologies and solutions, they were able to operate even during the COVID-19 pandemic. They had their business continuity plans in place. Their workers and employees could continue to work remotely offsite. They could continue to service their customers and clients remotely – even customers and clients who are not based in Singapore.

Anecdotally, we do hear feedback from our companies, including SMEs saying that they had benefited from early investments in digital technologies.

In my conversations with many of the towkays at SMEs, business owners and management of companies, they also indicate to me they are not resting on their laurels. Many of the conversations have shifted at the management level, at the board level, from seeing digitalisation and technology as a cost centre to one of investment in capabilities, investment for greater competitiveness and better productivity for their employees.

I am very glad these conversations have shifted partly, perhaps, due to COVID-19, but they reinforce the point that we must not lose these gains. We should continue to hasten our digital transformation because, as a system, I believe our ecosystem in Singapore, our business environment, can enable us to be thriving competitive economy that can allow us to create new opportunities for companies and all Singaporeans.

Mdm Deputy Speaker: Mr Edward Chia.

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Thank you, Mdm Deputy Speaker. I would like to ask Senior Minister of State this: he mentioned about the impact from Chief Technology Officer-as-a-Service (CTO-as-a-Service). It is great to hear that companies are benefiting from CTO-as-a-Service since 2021. Just want to ask the Senior Minister of State since 2021, has there been any learnings from the service and any tweaks, particularly impact, in terms of scaling up and impacting more companies and raising awareness.

The second supplementary question is, it is also good to note that the Ministry is tracking the productivity gains of SMEs Go Digital. But does the Ministry also track the mental wellness gains or impacts on the workers in these firms as well? Because I believe that productivity and wellness go hand in hand. So, how does digitalisation also impact the mental wellness of the workers, especially senior workers in these firms?

Mr Tan Kiat How: Mdm Deputy Speaker, let me take Member Mr Edward Chia's supplementary questions in turn.

Let me address the first one around the CTO-as-a-Service. We launched the CTO-as-a-Service initiative in 2021, that is, about a couple of years ago. The intent was to give SMEs the confidence and convenience to go digital. SMEs, through this platform, can better access their own individual company's digital readiness through a set of checklists, through a set of assessment, maturity assessments, so that they can better choose a set of solutions to work for their needs, tailored to different sectors. If they need to go further, there is a consultancy that they can tap on to get advice on how they can proceed on their own digital transformation journey and a set of resources that are available to them on the platform.

Since the launch, we are very glad to see many more companies coming on board and benefiting from these solutions. In fact, I am heartened to see smaller mom-and-pop shops coming on board, not just the mid-sized companies, but smaller companies who realise and understand the benefits of digitalisation. Through our process of engaging these companies and through the feedback from our consultants who are part of the CTO-as-a-Service consultancy, we have identified areas where we can enhance our programme. This was announced earlier this year as part of MCI's Committee of Supply debate.

A few things, for example – I would not go through the long list – the Member can refer to our speeches as part of the Committee of Supply debate – but some areas were how we enhanced the platform to incorporate vendor reviews from other user SMEs so that we can improve the quality of the vendors in the platform.

The second one was to enable SMEs to apply grants through using their Corppass, so that it is more seamless.

And also, how we put together a panel of consultants appointed by Cyber Security Agency of Singapore (CSA) and the Personal Data Protection Act (PDPA) to provide advisory services related to cybersecurity and data protection. Because many SMEs tell us they understand the benefits of digitalisation, but are concerned with cybersecurity attacks and personal data breaches. So, we convened a set of consultants appointed by CSA and PDPA to advise these SMEs.

These are just some examples how we enhanced the programme and I encourage the Member to look at our speeches in March this year for greater details.

The second question by Mr Edward Chia was around whether we track the mental wellness of the employees. I must say not at this point in that specific set of questions that he asked. But we track the broader indicators. Hopefully, that also correlates to the well-being of the employee. We do not just look at workers hired and the value-added per worker, which is indicative of productivity gains but also, importantly, salary increments, wage increments. And we do track those. I do believe that these are important contributors to a person's mental well-being and emotional well-being.

But this is the feedback we will take into consideration. I will discuss it with my colleagues.