March 2, 2018


On 19 February 2018, Mr. Heng Swee Keat, Minister of Finance, delivered the Singapore Government’s Budget for 2018. Building a vibrant and innovative economy was one of the four themes touched upon and we are providing a brief recap since this topic is close to the heart of all businesses.

Small and medium-sized enterprises (SMEs) seeking to accelerate digital technology adoption can leverage Budget 2018 schemes to innovate, build deep capabilities and forge strong partnerships. For your easy reference, our cheat sheet below summarises the various grants and schemes available, with full details available at the official Budget 2018 website.

 

Fostering
Pervasive Innovation
 

Productivity Solution Grant (PSG)*
Streamline existing grant schemes that support pre-scoped, off-the-shelf productivity solutions into PSG with funding up to 70% of qualifying costs

Enterprise Development Grant (EDG)*
Consolidate SPRING's Capability Development Grant and IE Singapore's Global Company Partnership Grant to encourage building deep capabilities, scaling up and internationalisation with up to 70% funding of qualifying costs

Partnership for Capability Transformation (PACT) Enhancement*
To provide funding up to 70% of qualifying costs for collaborations between companies in areas including capability upgrading, business development and internationalisation

Open Innovation Program (OIP)*
Facilitate innovation and narrow the gap between research and commercialisation by matching problem owners and solution providers across sectors

Research & Development Incentive**
250% tax deduction (previously 150%) on qualifying costs incurred for R&D performed in Singapore

Intellectual Property (IP) Incentive**
200% tax deduction (previously 100%) for the first $100,000 of qualifying IP registration costs

Incentive for in-licensing cost**
200% tax deduction (previously 100%) for the first $100,000 of qualifying IP in-licensing costs

   
Building
Deep

Capabilities
 
   
Forging
Strong
Partnership
 

* More details to be released at Ministry of Communications and Information’s (MCI) and Ministry of Trade’s (MTI) Committee of Supply (COS)

** Tax incentive schemes. Businesses are advised to consult tax advisers prior to starting on these projects to secure the full benefits of these incentives. Changes take effect from YAs 2019 to 2025

 

3 technology areas for SMEs’ consideration

The next question that readers may have is “what technology should my business adopt?” To answer this question, this article recaps case studies of relevant technology adoption for SMEs’ reference to better understand which grants or schemes will be most applicable to your business’ unique requirements.

After scanning the technological landscape for business tools and evaluating their potential business impact, we have highlighted three high-priority technology areas below that businesses may consider.

Applicable grants or schemes for these technology areas may include the PSG, EDG and OIP1:

 

Robotics Process Automation (RPA)   Data Analytics (DA)   Artificial Intelligence (AI)
  • Advanced robotics are not just for factories. RPA is rapidly getting adopted.
  • RPA will enable smarter labor deployment by taking on monotonous tasks and introducing efficiency in business processes.
 
  • With digital transformation, data is the new "oil" and DA allows businesses to harness value from data.
  • As Software-as-a-Service (SaaS) becomes more widespread, SMEs can quickly leverage these lower-priced and user-friendly solutions to analyse existing data and obtain insights.
 
  • AI goes from Newbie to Hype to Mainstream.
  • By 2020, 85% of CIOs will be piloting AI programs through a combination of buy, build and outsource efforts[A].
  • AI creates synergy together with automation and DA.

 [A] Gartner’s “Predicts 2018: Artificial Intelligence” report, 13 November 2017.

 

Automation, data analytics and artificial intelligence case studies

Automation - introduction and case study

RPA uses a "robot" that can be in the form of software to handle high-volume, repeatable tasks that previously required manual processing. For example, imagine instead of a large team of accountants, a software robot extracts data from various documents and keys the data into multiple systems, 24/7, 365 days. RPA will free up staff to perform more value-added functions, such as analysis of financial records, and enhance employee satisfaction while reducing manual error rates.

As labour costs increase while technology costs decrease, RPA is becoming more widespread with this global market projected to grow at a whopping compounded annual growth rate of 47.1% from 2016 to 2024. The question for businesses is: Where, when and how will we deploy robots?

For example, United Overseas Bank’s (UOB) trade finance operations team has deployed RPA to process requests for letters of credit since 2017. RPA outperforms the previous manual process, taking just 40 seconds to complete this task which is 3.5 times faster.

 

Data analytics - introduction and case study

DA can be broken down into three key components: (a) Gathering data, (b) Analysing data and (c) Obtaining insights from data. The purpose of this process is to unearth insights to better understand customers and business processes. Our earlier insight article discusses this topic in greater detail.

For example, local leather goods specialist Goodvine Group introduced radio frequency identification (RFID) tags2 in 2015 to track granular product information such as design styles and colours. This is to inject more quantifiable data into re-stocking forecasts. Automatically capturing data also allows Goodvine to do greater in-depth analysis of seasonal demands and 'decay factors' like the possibility of products becoming less popular over time. Ultimately, such analysis also helps them glean insights on the features of a product that is popular and adapt their designs accordingly.

 

Artificial intelligence - introduction and case study

In a nutshell, AI is applied to develop systems endowed with the intellectual processes characteristic of humans. In case you have used Amazon’s Alexa product or found a great movie thanks to Netflix recommendations, you are already acquainted with AI even if you didn’t know what sort of algorithms power these recommendations.

According to a survey from MIT-Sloan Management Review and the Boston Consulting Group3, almost 85% of executives believe AI will allow their businesses to obtain or sustain a competitive advantage. Yet only about one in five businesses have started using AI.

For example, Hipvan, a local online furniture mall, has seen a 121% rise in engagement upon introducing a ‘search by image’ function on its mobile app. By using an AI image recognition tool, Hipvan has enhanced users’ product discovery process and upgraded their experience, from inspiration to design and implementation.

In our opinion, as AI becomes more mainstream in future, firms that have already adopted AI will have a first-mover advantage. This is because current AI models become better with more data and first-movers would have trained their models on far greater amounts of data than latecomers.

 

Concluding statements

Despite the Singapore Government's efforts to make it easier for SMEs to adopt digital technology and solutions, many businesses continue to find it challenging when obtaining Management's buy-in. Very often, the unfamilarity with technology or the view that it is not a priority prevents businesses from taking advantage of technological developments that could have helped them leapfrog the competition. It is crucial for them to understand that the acquisition of new technology to remain competitive and relevant to consumers is very often strategic in nature and plays a crucial role in laying the foundation for future success.

 


As these grants have just been announced in Budget 2018, precise application procedures are likely to be released in Mar 2018 when Parliament votes on the proposed budget. For additional details, please see official Budget 2018 website.
Tapping on data science in retail, SPRING Singapore.
Reshaping businesses with Artificial Intelligence, MIT Sloan Management Review, 06 Sep 2017.


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    [215] => D:\WEB\RSMSingapore\modules\mod_search\mod_search.php
    [216] => D:\WEB\RSMSingapore\modules\mod_search\helper.php
    [217] => D:\WEB\RSMSingapore\components\com_search\router.php
    [218] => D:\WEB\RSMSingapore\templates\rsm\html\mod_search\default.php
    [219] => D:\WEB\RSMSingapore\templates\rsm\html\mod_menu\worldlocation.php
    [220] => D:\WEB\RSMSingapore\libraries\joomla\document\html\renderer\head.php
    [221] => D:\WEB\RSMSingapore\libraries\joomla\document\html\renderer\message.php
    [222] => D:\WEB\RSMSingapore\libraries\cms\layout\helper.php
    [223] => D:\WEB\RSMSingapore\templates\rsm\html\layouts\joomla\system\message.php
    [224] => D:\WEB\RSMSingapore\libraries\legacy\response\response.php
    [225] => D:\WEB\RSMSingapore\administrator\components\com_acymailing\helpers\helper.php
    [226] => D:\WEB\RSMSingapore\administrator\components\com_acymailing\compat\compat3.php
    [227] => D:\WEB\RSMSingapore\administrator\components\com_acymailing\classes\cpanel.php
    [228] => D:\WEB\RSMSingapore\libraries\cms\html\select.php
)