Singapore cityscape

[dropcap size=small]S[/dropcap]mall businesses in Singapore expect this year to be a prosperous one, with most respondents in a recent survey expecting both their businesses and Singapore’s economy to grow.

CPA Australia’s eighth annual Asia-Pacific Small Business Survey revealed that some 57 per cent of local businesses surveyed were increasingly confident about their growth opportunities, despite a weak 2017.

It is the best result for Singapore since the 2012 survey, said CPA Australia’s head of policy Paul Drum.

More Singapore’s small businesses expect to introduce a new product, service or process in 2018 than in 2017, said the survey.

“This improved result reflects stronger confidence in Singapore’s economy and small business environment in 2018, and concerns over increasing competition,” CPA Australia said.

It added that the strong support Singapore’s government gives to encourage innovation, and the “typically strong management capabilities of Singapore’s small businesses”, have also contributed to more Singaporean small businesses focusing on innovation than in markets such as Australia and New Zealand.

A majority of small businesses here, 55.1 per cent, expect the local economy to grow, up from 39.4 in last year’s survey.

Singapore’s small businesses’ confidence in the local economy is stronger than that of firms in the New Zealand, Australian and Malaysian economies, however, it is significantly below small businesses’ confidence in Indonesia’s economy at 93.6 per cent.

Those who apply digital technologies in their business will stay ahead of the pack than those who don’t, said the survey.

Survey results showed investments into new technologies are likely to have a fairly quick and positive impact on many small businesses’ bottom line.

Some 35.1 per cent of Singapore respondents which invested in technology in 2017 said that such an investment has already resulted in improvements in profitability.

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Singapore’s small business sector is more digitally capable, CPA Australia said, with a “significant majority” using social media for business purposes, with nearly four in 10 businesses earning more than 10 per cent of their income from online sales.

But the industry could benefit even more from a stronger focus on new digital payment options such as AliPay, SamsungPay and WeChat Pay.

The survey showed only 30.2 per cent of small firms allow customers to pay through this technology, well below China (65.5 per cent) and the survey average (42.7 per cent).

Despite a high interest in driving business growth through technology, however, small business owners here appear relatively unperturbed by the threat of cyberattacks on their systems, with only 35.4 per cent of owners believing it will likely occur to them this year.

The number is higher than New Zealand, but well below Vietnam, where 80.7 per cent of businesses expect an attack.

Nevertheless, nearly three-quarters of businesses here are shoring up their systems against attacks.

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Beyond digital security, challenges such as increasing costs and competition continue to beset the sector.

Singapore businesses lamented both factors as barriers to growth, and pinpointed staff costs as most detrimental to business, followed by cost of materials.

Despite the increasing cost of staff, however, 26.6 per cent of Singapore’s small businesses expect to add to their staff numbers in 2018, an increase from last year’s survey.

This story originally appeared in The Business Times.