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The secret recipe of Singapore’s Budget 2021 plan: Transforming into Smart Nation

Written by Chua Kee Lock Published on     4 mins read

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Emerging from a global pandemic, Singapore aims to future-proof itself by transforming into a Smart Nation.

COVID-19. While the pandemic has been a challenge in many ways around the world, it has also served to accelerate Singapore’s technological evolution. This is a change indeed — the disruptive varietal.

From Singapore’s recent budget 2021 announcement, it is clear that the nation’s transformation into a Smart Nation remains a priority. Having doubled down on initiatives to encourage digital adoption amongst local companies, Budget21 also aims to provide local companies with a range of options to access capital sorely needed to innovate, transform and scale.

These are bold and progressive initiatives. But how should we evaluate Budget21?

From my perspective as a venture capitalist, the lessons of entrepreneurship and leadership come to mind. In the words of Mohammad Ali: “Everybody has a plan until they get punched in the face”. Most entrepreneurs are able to execute and manage well in normal times. The proof is in the pudding when it comes to entrepreneurs confronted with a crisis.

These watershed moments differentiate the great founders from the rest. Great founders are able to provide direction for the longer term and effectively run their companies in the face of adversity.

From the recent budget announcement, it is clear that Singapore is adopting a tripartite approach of short- (cut cost), mid- and long-term (direction pointing) measures.

In the short term, to keep safe our businesses and people. Over the longer term, to safeguard our economic progress, ensuring that we advance as one nation. Importantly, that no one gets left behind. All these while cultivating a greener, more self-sufficient and sustainable Singapore.

A case in point is the Green Plan 2030. This plan points direction to the world that Singapore is committed to playing its part towards sustainability, reducing its carbon footprint, and further solidifying its status as one of the world’s greenest nations.

When COVID-19 emerged last year, the first thing Singapore did was to roll out various initiatives to help our people and businesses adversely impacted. However, we recognized early on that this was not sufficient, that the pandemic could be protracted. Critically, that this crisis would also not be our last.

Unable to cope with the disruptive change unleashed by COVID-19, many businesses have failed. The urgent need to future-proof Singapore is patently evident.

Looking ahead, we embarked on our journey to be a Smart Nation by encouraging digital adoption and transformation by local companies.

For instance, in this year’s budget, the government will co-fund the plans of Singaporean SMEs that adopt digital solutions and new technologies, as well as enter new markets. This includes the SGD 1 billion set aside for digital transformation schemes like the Emerging Technology pogram, Chief-Technology-Officer-as-a-Service (CTOaaS) initiative, and Digital Leaders program. It is also supporting companies looking to scale by committing up to 80% to existing enterprise schemes.

We have also taken proactive measures to avail capital, bridging market gaps for technology ventures domiciled in the country. This includes efforts to step up risk-sharing arrangements with providers of capital and providing grants to support businesses across their life cycle, including startups at various growth stages.

Another example is the Venture Debt program, which the government will extend and enhance by raising the cap on loan quantum support, in addition to sharing up to 70% or risk on eligible loans from financial institutions. By extending this short-term debt initiative, startups will have better access to working capital that can fund their future growth, especially since they typically do not have significant tangible assets to pledge as collateral.

When the pandemic struck, many startups had to drastically reduce expenses and rationalize headcount to survive. While short-term, decisive cost reduction measures were needed to stem the downward spiral. Great founders did not lose sight of the potential growth opportunities to be seized in the wake of a crisis.

With the situation now improving, choices made by startup founders will differentiate the good leaders from the rest. A good leader is one able to continue thinking on his or her feet, deftly pivoting the business when required, advancing swiftly and effectively, against all odds. This may take the form of business model innovation or via the adoption of new strategies.

In closing, I’m reminded of an advertisement sighted some time back: “Machines Learn. Humans Lead.”

For our startups and Singapore, my wish is that we are always a “startup” nation in our mindset, innovating and constantly driving change. Supporting societies and growing economies. Making the world a better place in our own “small” way.

Smart nations Learn. Startup nations Lead. Let’s learn. Let’s lead.

 

Chua Kee Lock is the CEO of Vertex Holdings, a Singapore-headquartered venture capital investment holding company. He’s also concurrently managing partner of Vertex Ventures SEA & India as well as chairman of Vertex Growth. He was appointed by the Singapore Government as a non-resident ambassador to the Republic of Cuba and the Republic of Panama in 2020. He currently serves on the boards of several companies, including Shenzhen Chipscreen Biosciences, Yongmao, and Credit Bureau Asia, which are publicly listed.

Disclaimer: This article was written by a contributor. All content is written by and reflects the personal perspective of the writer. Image is of courtesy to Vertex Holdings.

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