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Seeing opportunities in uncertainty
ECONOMIC uncertainties and geo-political tensions have dominated the headlines this year, and businesses large and small have been grappling with how these events impact their businesses.
As part of SGSME.sg's Business Solutions and Empowerment series, audiences get to hear economic and geo-political experts speak about 2019 in retrospect, and what business opportunities may be gleaned from uncertainties in the coming year at the Possibilities 2020 event.
Senior Minister of State Chee Hong Tat will deliver a keynote speech and there will also be talks by Parag Khanna, founder and managing partner of FutureMap; Garick Kea, executive director of Consumer Insight, Nielsen Singapore; and Shekhar Jaiswal, head of Singapore Equity Research, RHB Research, RHB Securities Singapore.
They will share individual insights on the current economic and political landscape and how business owners can better plan ahead.
A panel discussion moderated by David Kuo, co-founder of The Smart Investor, will explore how SMEs can better navigate choppy waters.
Panellist Victor Mills, chief executive of the Singapore International Chamber of Commerce, sums up his view of the current political climate: "Governments around the world are increasingly turning to protectionism, populist policies - this leads to a difficult environment for businesses to operate in. It is up to businesses to be like water, and find a way around obstacles."
Joining Mr Mills and Mr Kea on the panel is Singapore entrepreneur Krystal Choo, chief executive and founder of Tickle, and a partner at Neo Sapio. Tickle is a platform that lets people host or join paid experiences; and Ms Choo's work at Neo Sapio is what she prefers to be known for. Neo Sapio creates and deliver transformative solutions for women.
"By mid-2019, China's trade with Singapore and the rest of Asean surpassed China's trade with the US, indicating a major inflection point in the trade war," says Dr Khanna, founder and managing partner of FutureMap, stating that Singapore is in a good position as a gateway for businesses looking to diversify into the Asean market.
"Asia's integration is accelerating as a result of the US-China trade war, and the late 2019 progress in Bangkok on the RCEP agreement will accelerate this into 2020," says Dr Khanna. "Though trade is decelerating due to cyclical conditions, Singapore is the key conduit for FDI into Asean and should thus benefit from this unfolding integration."
Risks and rewards
Owing to their smaller size, SMEs can leverage their agility to better ride the waves of volatility as opportunities present themselves.
Clear vision, backed by meticulous research and learned insight is paramount to making good business decisions.
However, their small stature usually means they have a limited pool of resources, and this can be a pain point when the tide turns.
"SMEs are fundamentally vulnerable to global headwinds, and lack the resilience of MNCs when it comes to periods of uncertainties," says Mr Kea. "They do not have the mobility to relocate their markets when things get difficult, and it's often a case of being constrained by their sunk costs after entering a country," notes Mr Kea, referring to the considerable investments made in doing business in a foreign country.
Singapore provides a safe harbour for SMEs to grow. However, the limited size of the domestic market sees companies crossing borders to continue their growth journey.
"Be resilient, be hungry to survive. Singapore is unique within the region, as we offer an exceptional amount of networking and support for businesses to grow - this may have resulted in local SMEs becoming risk averse," shares Mr Mills.
"Doing business has always been about taking calculated risks; there are no rewards without risk - you must be wary of who you are doing business with, as there is a different set of rules for every country; you do not want to regret having sunk time, money and effort into a partner in whom interests later diverge," he says.
"Leverage the experience of Singapore's initial diaspora - mentors who have accrued years of experience... And the many free trade agreements that have been negotiated by the government to find new pathways to business."
Mr Mills says that businesses need to have a clear identity to better realise their strengths.
Dr Khanna says that 2020 should bring fuller implementation of the RCEP agreement as well as greater investment coming into Asean countries as manufacturers and other sectors divert from China and look south. "Singapore businesses should take full advantage by working with the many new foreign companies registering in Singapore on an ongoing basis.
"Singapore businesses need to step up in terms of digital productivity and cross-border activities," advises Dr Khanna, author of one of this year's bestselling books, The Future is Asian: Commerce, Conflict And Culture In The 21st Century. "Working with banks on trade finance, multi-currency settlement products, and other areas will help to broaden the customer base," he says.
Tickle's Ms Choo says looking both at the bigger picture and diving deeper, it is imperative for a company to put people and their humanity at the forefront, and adopt more innovative and inclusive pathways to profitability.
"People are caring more about a business's values," she says. "Imbalances have swung too far on polar ends, and now corrections are occurring across the lengths we go to make money, how we treat employees, and power dynamics between the genders."
"2020 is an opportunity to first examine your business's reason for being, exploring what actions define those values, then having the courage to actively be part of a positive change."
- Possibilities 2020 will be held on Jan 10, 2020, from 2-5 pm at the NTUC Centre (Room 801, Level 8), 1 Marina Boulevard, Singapore 018989. Register now at 2020.sphevents.com.sg. The event is organised by sgsme.sg, a resource-rich business portal powered by The Straits Times, Lianhe Zaobao and The Business Times. It is supported by RHB Bank and NTUC USME.