Singapore is allocating more than SG$500 million ($352.49 million) to support local businesses in their digital transformation efforts, which increasingly are imperative for enterprises to deal with the fallout of the COVID-19 crisis. Specifically, the funds will go towards facilitating companies in their adoption of e-payments, e-invoicing, as well as more advanced digital tools.
The pandemic has accelerated the pace of digital transformation, with telecommuting, online food and services, and virtual events now the norm. "Our businesses must adapt and we will support them in this," said Singapore's Deputy Prime Minister and Finance Minister Heng Swee Keat, during his speech Tuesday to announce the government's Fortitude Budget.
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The government is tapping the country's reserves for a second time to fund the SG$33 billion ($23.26 billion) Fortitude Budget, its fourth in a series of funds injections to help its business community and population ride out the pandemic. Together, these total some SG$92.9 billion, or 19.2% of Singapore's GDP, with the growth forecast today being further downgraded to a contraction of between 4% and 7%, from its earlier projection of a 1% to 4% contraction.
Digital transformation has emerged as a key shift in the COVID-19 crisis and Singapore must not revert to its old ways, said Heng, who added: "Digital solutions will become more deeply embedded in our lives." Citing a McKinsey study, he noted that what would have taken five years in consumer and business digital adoption has now been achieved in just eight weeks since the global pandemic began.
With SG$500 million now set aside to support such efforts, the focus will be to help businesses in three key areas of digital transformation, he said. For one, more would go towards helping F&B stallholders in hawker centres, wet markets, coffee shops, and industrial canteens transition towards e-payments, with each to receive SG$300 a month for five months to do so. Specifically, the deployment of Singapore QR codes would be accelerated amongst these businesses, which requires businesses to sign up only once with NETS3 to receive payments through 19 providers including Singtel Dash, GrabPay, and local bank mobile payments such as DBS PayLah.
More support will also be provided for businesses to digitalise their basic payment and invoicing functions, including helping them to implement safe management measures and business continuity strategies to adapt to post-COVID business norms. The government also said it would absorb the transaction fees until 31 December 2023.
In addition, eligible businesses in F&B and retail -- sectors most affected by safe distancing measures implemented across the island -- will get a payout of up to SG$5,000 if they adopt e-invoicing and Singapore's peer-to-peer funds transfer for businesses, PayNow Corporate. They will also be eligible to receive such funds if they adopt business processes or e-commerce tools.
Pointing to the government's earlier initiative to help retailers adopt food delivery and e-commerce services, Heng said more than 10,000 F&D and retail businesses have tapped into this funding support.
Additional funds will also now go towards helping businesses that already have basic digital capabilities to further expand their digital transformation. "We will help them make use of advanced digital tools in an integrated way," he said. For instance, an additional SG$5,000 would be set aside for F&B and retail businesses that adopt advanced digital solutions, the minister said.
Some SG$250 million has also been earmarked to help businesses digitalise alongside with digital platform application providers, for example, in developing offline-to-online (O2O) business models to access new domestic revenue streams and international demand, he said. This, he added, would mitigate the impact of COVID-19 on revenue.
Apart from the enterprise community, Heng said support would be given to schools and institutes of higher learning to enable them to make better use of digital technologies for learning. He said the government would tap the country's software engineers, artificial intelligence (AI) experts, as well as learning scientists and educators to develop relevant pedagogy and build new digital platforms for online teaching and learning, integrating these with the latest in AI technology and learning sciences.
More details on this would be available at a later stage, he said, with the National Research Foundation and Education Ministry driving these initiatives.
In addition, to plug gaps in venture capitalism, financial support will be provided for promising startups to "help them sustain their innovation and entrepreneurship journey", Heng said. Some SG$285 million will be set aside to fuel and bring in at least another SG$285 million in matching private investments. This is in addition to an earlier SG$300 million committed to help deep tech startups gain access to capital, expertise, and industry networks, he said.
The Fortitude Budget also includes several initiatives to help retain and create jobs in Singapore, including further enhancements to the Jobs Support Scheme for businesses to keep their workers, more rental relief for small and midsize businesses, and more funds to help workers gain new skills.