Amazon has inked an agreement to help arm small and midsize businesses (SMBs) in Singapore with the knowledge and skillsets to push their business online. The country has seen sharp climbs in technology adoption among these organizations over the past couple of years, according to new research from the Singapore government.
Amazon on Wednesday said it would work with Nanyang Polytechnic's Singapore Institute of Retail Studies (SIRS) to beef up the online export capabilities of local entrepreneurs and SMBs, so they can further globalize.
Amazon is looking to help 800 local businesses tap cross-border e-commerce opportunities over the next three years through its Global Selling e-commerce scheme, which provides the infrastructure that a merchant needs to sell overseas, such as warehousing and shipping, and access to Amazon's global customers.
Micro businesses and SMBs that adopt e-commerce technology for exporting their products and services over the next five years could push up their share of total revenue to 69% in 2027, up from 45% in 2022, according to research from Access Partnership. The tech advisory firm said Singapore's business-to-consumer e-commerce export revenue clocked at SG$1.7 billion ($1.24 billion) last year, and could hit SG$3.9 billion ($2.85 billion) by 2027, if local businesses invest in cross-border e-commerce technology.
Through its partnership with SIRS, Amazon said training and courses will be provided to the local companies, including product sourcing best practices and product development workshops that are aligned with global consumption trends.
Amazon also will work with the SIRS to explore more initiatives for driving the adoption of cross-border e-commerce among local entrepreneurs and SMBs.
SMB digitalization driving Singapore's digital economy
Growing digitalization among SMBs has helped boost Singapore's digital economy, which contributed an estimated 17.3% of the country's GDP last year, up from 13% in 2017. This is almost double its economic contribution or value-add over the five-year span, from SG$58 billion ($42.46 billion) to SG$106 billion ($77.59 billion), according to new research from Infocomm Media Development Authority (IMDA). Economic contribution is assessed as the sum of income generated from the domestic production of goods and services, comprising gross operating surplus, remuneration, and taxes on production.
"Rising value-add from digitalization comes on the back of more firms embracing digital technologies and solutions," IMDA said. "In particular, the technology adoption rate among SMBs rose from 74% in 2018 to 94% in 2022. The average technology adoption intensity by SMBs has also increased from 1.7 to 2.1 over the same period."
Technology adoption rate is measured against SMBs that have adopted at least one digital technology from nine categories, which include cybersecurity, cloud, e-commerce, and artificial intelligence (AI). Technology adoption intensity refers to the number of digital technologies adopted per SMB, out of the nine categories.
However, there is a significant gap between SMBs and larger enterprises, the latter of which clocked a higher technology adoption intensity index of 5.7, compared to the 2.1 figure by SMBs.
There also are notable differences in the adoption rate of the different digital technologies, IMDA noted. For instance, 89.3% of larger enterprises have taken up cloud computing, compared to 26.5% of SMBs. Another 82% of larger enterprises have adopted data analytics, while just 12.5% of SMBs have done likewise.
The adoption of e-payment technologies, though, is almost on par between the two enterprise sizes. Some 98.7% of larger enterprises have adopted e-payment services, compared to 92.8% of SMBs that have done likewise, IMDA's study found.
Increased digitalization and online connectivity, however, can be a double-edged sword as it widens an SMB's attack surface. As it is, Singapore SMBs are among the most vulnerable to cybersecurity attacks.
These businesses were hot targets of ransomware attacks last year. Statistics released by Cyber Security Agency of Singapore (CSA) indicated there were 132 reported ransomware incidents in 2022, with SMBs most impacted by such attacks, particularly those in manufacturing and retail.
Asked if this might prove to be a challenge for SMBs looking to digitalize, IMDA's deputy CEO Kiren Kumar pointed to the government's various initiatives to ease access to help, given these companies' limited resources. For instance, CSA earlier this year introduced a "chief information security officer-as-a-service" scheme, providing eligible SMBs up to 70% in funding support to work with cybersecurity service providers to develop tailored cybersecurity plans that improve their security posture.
Kumar noted that CSA also established certification programs, including the Cyber Trust mark, to further help organizations understand their risk profiles and identify security elements they need to mitigate such risks.
He added that the government would continue to reach out to SMBs through such initiatives.