Small and medium enterprises (SMEs) in Singapore continue to feel the effects from COVID-19 and a majority are still leaving their international expansion plans on the backburner for the next 12 to 24 months according to the seventh edition of QBE Insurance’s annual research survey of Singapore SMEs.
The survey conducted in Q4 2021 and including more than 400 SME decision-makers in Singapore revealed that with the COVID-19 pandemic still continuing to affect global economies, SMEs in the country are adopting a more conservative business mindset.
Around 60% of all Singapore SMEs being unsure or having no intention to internationalise in the next two years. Separately, close to a third (29%) of those who indicated they do not see internationalisation on their horizons, have a domestic presence only.
The top three concerns around internationalisation plans cited by all SMEs were travel restrictions for employees due to the pandemic; a general lack of knowledge of other markets; and having sufficient financing or funds for expansion (all 26%).
SMEs in Singapore are adopting a more conservative business mindset, with half of those who already have a business presence overseas intending to downsize in the next one to two years.
For small SMEs, 53% of them who are already internationalised intend to downsize, with their main challenges cited being cost control, mitigation and streamlining their business and addressing concerns around the cost of running the business.
QBE Singapore CEO Ronak Shah said, “In the last 12 months, SMEs have been carefully adjusting their business strategies, prioritising prudence as they continue to work in a pandemic economy. As many continue to err on the side of caution in 2022, we encourage them to take this time to reassess their business models and operations to give mind to environment-based investments or initiatives that will help provide sustainable business growth post-pandemic.”
Two years into operating in a pandemic environment, business outlook appears to be looking up for SMEs with nearly two-thirds (59%) of all SMEs polled believing business outlook will improve in the next 12 months.
Two thirds (67%) of all SMEs also expect the economic outlook to improve. One-third (33%) expect the size of their business to grow in the next 12 months, up from just under one-fifth (19%) in 2021.
The survey also revealed that 61% SME businesses feel pandemic policies, restrictions and lockdowns will worsen in the next 12 months, in addition to increased operating costs. With current regulations having adversely impacted their business operations, 44% of all SMEs stated that the cost of running their business as their top concern over the past 12 months. This also featured as the top concern for small-sized SMEs, with almost half (48%) raising this. A