Rising FDI could benefit SMEs in 2024: experts

Stronger business growth seen for firms with presence abroad.

Small and medium-sized enterprises (SMEs) in Singapore are poised to benefit from the rising foreign direct investment (FDI) flowing into the city-state and the technology transfer that come with it this year, according to industry experts.

Speaking at the inaugural DBS Market Outlook Series forum earlier this week, Koh Kar Siong, managing director and group head for corporate and SME banking at DBS said the Lion City continues to be magnet of sizeable FDI due to its safe-haven reputation, business-friendly environment and a highly skilled labour force.

FDI inflows also come with the transfer of technology, innovation and technical know-how among other things, opening opportunities for SMEs to capitalise on.

“When multinational corporations diversify and decarbonise their supply chains across Asia, SMEs with a sustainable edge would be in a prime position to support this expansion,” Koh said.

Half of local businesses remained optimistic on opportunities to expand abroad despite a cautious business sentiment, according to a survey presented by Ray Kwan, Singapore Business Federation’s director of South Asia, Middle East and Africa international business division. 

READ MORE: SMEs confident on growth prospects of businesses this year

Kwan sees SMEs with existing presence abroad growing at a robust pace this year. 

Further, the easing wage growth and a softening labour market could give local enterprises some breathing space to stay afloat in a business environment still filled with heightened economic uncertainties, said DBS economist Chua Han Teng.