ASEAN KEY DESTINATIONS
Familiarity with markets and social ease are the reasons Singapore's small and medium-sized enterprises (SMEs) which have expanded overseas are concentrated in South-east Asia and China.
Only recently have intrepid entrepreneurs gone to Africa, Latin America and Arab West Asia. Numbers are small, their investment negligible compared with the S$100 billion (US$78 billion) sunk into the region. The lure is that the trickle could yield a torrent of profit for businesses prepared to be bold.
Are South-east Asia and China over-invested? This is a question businessmen should ponder.
Demand for the products and services SMEs offer in those countries could be shrinking through competition, rising production costs or changing needs.
The "China price" which gave investors a production edge in low wages is long past. Trade in non-food consumer goods in the Asean region is reaching saturation point with a surfeit of indigenous suppliers and competing foreign firms. Before long, Singaporean SMEs operating in the region may find the revenue from this source less important to their bottom line.
The argument to move further afield is compelling. But knowing where to seek market niches and when to move are skills not many small businessmen possess.
Firms from the government-linked stable have corporate development units and feedback from their foreign associates to guide them in their decisions. SMEs depend almost entirely on state agencies to provide market leads.
IE Singapore has unearthed valuable data to point businesses in the right direction. Yet it has found it tough to persuade SMEs to look beyond the immediate neighbourhood.
Africa south of the Sahel, notably in the southern third of the continent and the west, is poised for growth that could soon rival that of emerging economies.
Africa is not all wars and venal rulers. The politics becomes less tribal as men and women educated abroad move into command positions. A middle class is emerging, paced by China's commodities and infrastructure deals. South America in contrast possesses a prosperity heritage.
Though many nations are still shaking off the effects of decades of military repression, demand for goods and fixed-asset renewal is growing.
These are worlds barely known to many Singapore businesses. But first, they must want to get out of their comfort zone.
Manpower is a concern if they rely on Singaporeans to manage foreign operations. If reluctance to uproot can be overcome with appropriate incentives, SMEs might well have an edge over other foreign investors - the multicultural ease of Singaporeans can prove a big asset in working with diverse players and adapting to life abroad.
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