Many middle-segment companies globally are being positive about business opportunities, says the yearly report of EY Growth Barometer. An annual survey was done on about 2,766 middle-market executives located across 21 countries, which included 103 respondents from Singapore. It said most of the companies aim a growth of 6-10% (Singapore: 51%, Global: 60%), which is way higher than the International Monetary Fund’s current GDP forecast of 3.9% for the year.
Asia-Pacific drives the growth ambitions
Though middle-market companies have been showing bullish growth globally, Asia-Pacific region has been showing highest ambitions. About 40% companies based in China, Australia, and Southeast Asia and about 39% in Singapore, have targets of double-digit growth, which is way above the global average growth rate of 6%.
Embracing Artificial Intelligence (AI)
The limelight recently has been on intelligent automation and also machine learning as they enable high middle-market growth. As per the survey, Singapore ranks as the third-highest in usage of AI (at 9%), followed by China and Netherlands (both at 10%). Approximately 72% of Singapore-based companies have plans to introduce AI in the next couple of years.
However, Singapore is still not leading in area the mature application of some new technologies. Many enterprises still feel that technologies can only improve process efficiencies (29%) and help with financial data (25%), rather than more impactful role of enhancing customer experience and further creating newer business models. In addition, about 20% of the companies think of technological disruption as a huge challenge in terms of growth, behind cash flow.
The key to growth ambitions is recruiting skilled talent
About 30% of the Singapore’s companies are of the view that attracting skilled talent is a major factor which accelerates growth. Though the companies are planning to increase their overall headcount, about 40% of the companies plan to recruit more of full-time resources and approximately 39% aim to hire some more part-time employees, freelancers and contractors.
More than half of Singapore’s companies (54%) are of the belief that the ideal scenario is being able to hire younger and more digitally-native talent.
Singapore companies are also thinking of going out of the boundaries
About 30% Singapore companies are thinking of overseas expansion as their growth priority to tackle the restrictions of their small home market. Though M&A is the second-most important growth strategy (19%), another way could be inorganic growth, with which Singapore companies are thinking of international expansion.
Though Singapore-based organisations have increasing overseas ambitions, their slow or rather flat global growth is one of the biggest external risk for Singapore companies (for about 41%), as compared to 25% in the rest of the world.
Another big obstacle to growth is the lack of cash flows, which about 38% of the Singapore-based companies face. Therefore, working on supply chain and improving the efficiency of operations is touted as one of the main growth accelerators (29%).
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