Businesses here are embracing digitalisation to support their operations and employee engagement. However, this is happening at different speeds.
The smaller the organisation, the less digitalised it is likely to be. This is according to a study by Economist Impact, which was commissioned by insurer Prudential Singapore.
The aim of the study was to assess how companies are leveraging technology to improve internal operations as well as help their employees maintain a healthy lifestyle and build financial resilience.
A total of 100 Singapore-based executives were surveyed in June and July 2022 for this study.
Citing the survey, 30% of the respondents working in SMEs say digital technology underpins most or all its business processes and operations. In contrast, the number is 86%, or nearly three times higher, for those working in large firms.
Jeff Ang, head of enterprise business solutions at Prudential Singapore, says that while the pandemic has accelerated digitalisation efforts in businesses, more can be done to help SMEs keep pace with large firms in leveraging technology, given how they are a key pillar of the Singapore economy.
“Engaging and supporting them in their digitalisation, whether through grants or training programmes, will be crucial in helping them stay relevant to customer needs and be more resilient as a business.
“When SMEs thrive, there will be a positive impact on the economy, resulting in greater growth for all,” says Ang.
SMEs, according to the survey, have invested less in advanced technologies compared to large firms, causing them to fall behind in advanced technology such as Artificial Intelligence (AI), data analytics and online payments.
For example, just 60% of SMEs have invested in AI compared to 82% of large firms; 30% have invested in analytics versus 70% of large firms. The corresponding response for online payments is 28% versus 70%.
Unsurprisingly, SMEs surveyed said that the primary reason for not digitalising to a greater degree was a lack of budget.
Nevertheless, Kurt Wee, president of the Association of Small and Medium Enterprises (ASME) says that the gap has narrowed considerably over the past five or six years.
According to Wee, this is partly due to “strong government support” for SMEs, which, as a result, are keen to invest in advanced capabilities such as data analytics, blockchain and product/service personalisation in the next two years.