Small and medium-sized enterprises (SMEs) must innovate to improve their operations and adjust to changing market conditions, said the Minister of State for Trade and Industry yesterday.
Mr Teo Ser Luck told Spring Singapore's inaugural SME Capabilities Forum that technology could help SMEs become more productive.
He cited fish products manufacturer Ha Li Fa, which increased output by more than 50 per cent after automating its production line and adopting an integrated inventory tracking system.
He added that technology could help SMEs market to customers digitally, but pointed out that they should also be innovative in their business models to adjust to changing market conditions.
Other speakers echoed Mr Teo's views.
Professor Serguei Netessine, The Timken Chaired Professor of Global Technology and Innovation at business school Insead and research director of the Insead-Wharton Alliance, advised SMEs to "start thinking about changing your business model or your competitors will change it for you".
Panellist Winnie Chan, general manager at bookbinding company Grandluxe, spoke about her firm's experience.
She said Grandluxe, which produces stationery, had been perceived as a "bookshop brand", which was not good as "bookshops are closing".
Last year, she started Bynd Artisan, a brand that allows customers to have stationery customised on the spot.
Ms Chan noted that the company's revenue had increased by 12 per cent since the introduction of the brand.
Yesterday's event also featured the introduction of five new projects under Spring Singapore's Collaborative Industry Projects (CIP) initiative, which develops solutions to help SMEs improve productivity.
Three projects, developed in collaboration with the Agency for Science, Technology and Research (A*Star), help SMEs adopt radio frequency identification (RFID) and image recognition technologies. The remaining two focus on information technology and digital marketing.
Dynamics Circuit, which repairs electronics and other equipment, participated in the CIP initiative last year and adopted an automated inventory tracking system using RFID technology.
Sales and service manager Kannan Rajahgopal told The Straits Times that the system raised productivity by 25 per cent to 35 per cent, leading to a 5 per cent to 7 per cent rise in revenue.
The company previously relied on administrative staff to track inventory manually.
Mr Rajahgopal said the system allowed them to focus on other tasks and prevented items from going missing.