Even as the Singapore economy is projected to see worsening economic climate next year, local businesses appear unwilling to transform to cope with the changing environment.
Just 15 percent of small and midsize businesses (SMBs) and 36 percent of large enterprises strongly agreed with the need to transform to adapt to slowing economic growth as well as technological change and disruption.
Across the board, 62 percent agreed with the need for businesses to transform, according to the annual National Business Survey conducted by Singapore Business Federation (SBF). The study polled 1,100 respondents from both SMBs and large businesses in major industries.
Some 63 percent said the economic climate had worsened in 2016 and 48 percent believed it would continue its downward slide in the new year.
The apparent resistance to change indicated that most businesses were still not embracing the Singapore government's call for economic transformation, said SBF.
Amid the bleak economic outlook, 68 percent cited operating costs as a major challenge while 66 percent pointed to manpower issues, which including rising labour costs and manpower rules and regulations.
In fact, 31 percent perceived government regulations as a key challenge for businesses, ahead of other issues such as technological change and disruption. The organisations highlighted regulatory issues such as the cost of compliance, struggles with bureaucracy, and mandatory fees and levies.
Just 27 percent of SMBs described current policies as satisfactory, while only 39 percent among large enterprises said likewise. SBF noted, though, that most respondents chose to remain neutral on the subject, indicating that the country's Budget 2016 was "not far-reaching enough" and lacked significant near-term impact.
It suggested that next year's budget needed to consider measures to help businesses with manpower challenges and lower government compliance-related costs and taxes.
SBF added that more could be done to enable companies to drive their economic transformation.
Just 13 percent of respondents said steps taken in Budget 2016 were sufficient in helping local businesses with the slowing economic growth. Furthermore, only 18 percent said help with adaptation to technological change and disruption was adequate.
Six in 10 SMBs, or 58 percent, had yet to make significant changes to cope with the slowing economic growth, while 64 percent did likewise for technological disruption.
SBF CEO Ho Meng Kit said: "Singapore is impacted by the current subdued external demand and global trade due to its open and outward-oriented economy. Domestically, high operating costs and the constraints imposed by our foreign worker policies continue to affect businesses. Businesses find operating under this persistently tepid global and domestic economy challenging."
He pointed to a recent SBF report, which called for the Singapore government to relook measures for Budget 2017 to help companies cope with the near-term economic headwinds and anticipated lacklustre business landscape.
Ho, though, also urged Singapore companies to transform and identify "new ways of doing things and offer innovative new products and services". He further stressed the need for them to expand overseas, noting that current technological disruptions had lowered barriers for companies to achieve this.