Overview

As Singapore gears up for Budget 2025, the manufacturing sector is at a “significant turning point” that could reshape its future competitiveness on the global stage. The Singapore Manufacturing Federation (SMF) underscores the urgency for the sector to adapt amid rising global pressures.

Budget Focus

Scheduled for February 18, 2025, the upcoming budget is the focus of SMF's wish list, structured around four strategic pillars: sustainability, human capital, internationalisation, and productivity. The federation has identified six critical priorities that must be addressed:

Critical Priorities

1. Accelerating the transition to a green economy 2. Enhancing workforce development in emerging technologies 3. Supporting internationalisation and trade resilience 4. Facilitating the shift to Industry 5.0 5. Improving access to capital for small and medium-sized enterprises (SMEs) 6. Boosting collaboration between SMEs and multinational corporations (MNCs)

Survey Insights

SMF’s president, Lennon Tan, notes that a recent survey conducted in November 2024 reveals that 91% of manufacturers believe sustainability initiatives are crucial for global competitiveness. Furthermore, 88% emphasized the urgent need for workforce upskilling in technologies like artificial intelligence (AI) and robotics, and 85% cited the necessity for greater support in diversifying markets and building resilient supply chains.

Green Transition Support

To support the green transition, SMF advocates for government-provided subsidies for energy-efficient equipment, such as electric forklifts and solar panels. Additionally, the federation proposes the introduction of circular economy grants to promote research and development (R&D), as well as the establishment of a carbon credit trading platform to enable SMEs to monetize their carbon reduction efforts.

Talent Development Initiative

Addressing the critical talent gap in advanced technologies, the SMF calls for an expansion of the SkillsFuture funding scheme to include comprehensive training programs in robotics and sustainable manufacturing. It also seeks to incentivize educational institutions to bolster STEM (science, technology, engineering, and mathematics) education and manufacturing-focused career paths.

SME Internationalisation Support

To facilitate SME international expansion, SMF recommends the creation of a regional trade support fund aimed at assisting with market entry strategies and export diversification, particularly in ASEAN and emerging economies. Moreover, enhancing local production and logistics capabilities will help stabilize supply chains.

Funding and R&D Proposals

The federation’s wishlist includes increasing R&D grants for sustainable technologies and AI applications, along with expanding pilot programs for testing cutting-edge manufacturing equipment. To ease access to funding for SMEs, SMF proposes enlarging the Enterprise Financing Scheme to encompass higher-risk R&D projects, as well as introducing low-interest bonds and simplified grant applications for digitalization efforts.

Collaboration with MNCs

Lastly, to foster knowledge exchange between MNCs and SMEs, SMF envisions an innovation partnerships program supported by financial incentives for integrating SMEs into global supply chains.

Conclusion

"Aligning government support with the priorities of the manufacturing sector will not only address immediate challenges but also equip Singapore to seize future opportunities," SMF asserts.

With the stakes so high, all eyes will be on the government's response during the upcoming budget announcement. Will Singapore's strategies propel its manufacturing sector to new heights, or will they fall short in an increasingly competitive landscape? The answer could define the nation's economic trajectory for years to come.