To help companies to transform and adapt to a post Covid-19 world, Singapore has unveiled a $24 billion plan to help companies emerge stronger from the pandemic. 

In his Budget speech on Feb 16, Deputy Prime Minister Heng Swee Keat said this was important as the pandemic has triggered global shifts on the economic, social and political fronts “on a scale arguably greater than the 1929 Great Depression.” 

The pandemic has “set off new domains for competition and cooperation” and also accelerated technological advances. 

Heng said the country will face three challenges, in short, a changing competitive landscape, rising inequalities, and importance of sustainability, terming these as “mega-shifts that will continue to reshape the world.” 

As such, this year’s Budget will focus on accelerating structural adaptations. “In the face of major changes, we must move from just counter-cyclical fiscal and monetary stabilisation policies to structural economic policies to equip our businesses and workers with deep and future-ready capabilities.”

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Heng outlined three enablers that the country will focus on to emerge stronger. “First, to grow a vibrant business community, with a strong spirit of innovation and enterprise, deeply connected with Asia and the world. Second, to catalyse a wide range of capital to enable businesses to transform and scale. Third, to create opportunities and redesign jobs, for our people to develop their skills, creativity, and talents.”

To grow a vibrant business community, Heng announced that Singapore will position its aviation sector for recovery, even as about $870 million in aid is planned to be disbursed to it this year. 

“Airports will be differentiated by their capabilities in securing public health and enabling safe travel. They will need digitalised systems and the ability to effectively re-route people and goods,” he said.

As such, Singapore will restore Changi’s connectivity and invest in on-arrival testing and biosafety systems. This includes the Notarise and Verify system being developed by GovTech through private-public partnerships.

In addition, Singapore will invest in three key platforms, Heng revealed, to allow businesses to remain competitive, and to innovate and collaborate on a global scale.

The first platform is the Corporate Venture Launchpad, which will be piloted this year to drive new innovative ventures. The Launchpad will provide co-funding for corporates to build new ventures through pre-qualified venture studios. 

The second platform is the Open Innovation Platform, or OIP. The OIP facilitates the matching of problems faced by companies and public agencies, with solution providers, and co-funds prototyping and deployment. The OIP will be enhanced with new features such as a cloud-based Digital Bench for accelerated virtual prototyping and testing. 

The third platform is the Global Innovation Alliance, or GIA, which serves to catalyse cross-border collaboration between Singapore and major innovation hubs globally. Heng revealed that he will expand the alliance to more than 25 cities over the next five years from the current figure of 15.  


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The GIA will also be enhanced through the inclusion of the Co-Innovation Programme. The Programme will support up to 70% of qualifying costs for cross-border innovation and partnership projects.

Chai Sui Fun, partner of international tax and transaction services at Ernst & Young Solutions noted, “Besides job creation, the Budget also focuses on strengthening infrastructure, capabilities and international collaboration for Singapore, which will go a long way to deepen Singapore’s long-term competitiveness and relevance.”

More risk sharing arrangements

Furthermore, Heng announced that the Government will step up risk-sharing arrangements with providers of capital, and provide grants, to support businesses at various stages of growth.

High-growth enterprises, including startups continue to have access to financial capital, by extending and enhancing the Enterprise Financing Scheme - Venture Debt programme, said Heng.

As part of the Venture Debt programme, the government shares up to 70% of the risk on eligible loans with participating financial institutions. 

Singapore will continue to support this programme, and increase the cap on loan quantum supported, from $5 million to $8 million, and expects about $45 million of venture debt to be catalysed over the next year.

$1 billion will also be set aside to encourage more mature enterprises to invest in new and emerging technologies to sharpen their competitiveness, and said the government will co-fund their adoption of digital solutions and new technologies.

The new Emerging Technology Programme will co-fund the costs of trials and adoption of frontier technologies like 5G, artificial intelligence and trust technologies. This will support the commercialisation of innovations and diffusion of technology downstream.

To help firms to identify and adopt digital solutions, the Chief Technology Officer, or CTO-as-a-Service initiative will provide access to professional IT consultancies, and the new Digital Leaders Programme will also support promising firms in hiring a core digital team and in developing and implementing digital transformation roadmap.

“Beyond these new initiatives, I will also extend the enhanced support levels of up to 80% for existing enterprise schemes such as the Scale-up SG programme, Productivity Solutions Grant, Market Readiness Assistance, and Enterprise Development Grant, to end-March 2022,” Heng said. 

He also highlighted job redesign as a critical part of business transformation, and said he will enhance the Productivity Solutions Grant – Job Redesign, by raising the Government co-funding ratio from 70% to 80%, till end-March 2022.

To support the growth of local companies, the Government has partnered with equity firms to provide growth capital for companies to transform and scale.

He noted that changes in the global economic landscape and financial markets have made it harder for large local enterprises, or LLEs to attract private equity.

To ensure growth capital is available for LLEs that are ready to transform or expand overseas on a larger scale, I will complement existing grants and loans, and support them through equity investments, tapping on market players to ensure commercial discipline.

Some $500 million will be set aside to be co-invested with Temasek in a Local Enterprises Funding Platform, to be managed commercially. Heng revealed Temasek will match the Government’s funds on a one-for-one basis, so the platform will have $1 billion available for its investments.

The platform will invest in non-control equity and mezzanine debt of selected LLEs, which are willing to work with the fund manager to pursue their next phase of growth.

In response to the announcement, Kanv Pandit, group managing director for Asia Pacific Banking Solutions at FIS said “It is encouraging to see targeted initiatives such as the Emerging Technology Programme that will drive adoption of new technologies including 5G and AI...The budget measures set the scene for “the rise of the virtual and knowledge economy” and the funding provided will help businesses tap on the tremendous opportunities that these new technologies bring.”

Allen Tan, principal and head of the tax, trade and wealth management practice at Baker McKenzie Wong & Leow added, “While Budget 2021 continues to provide immediate support for local businesses in the wake of a prolonged pandemic, its key focus is clearly on the medium to longer-term transformation of Singapore’s economy, and preparing its workforce to thrive in a digitalised economy."