atans1

A reason not to help SMEs

In Economy, Political economy on 09/03/2012 at 7:43 am

Well when PAP and WP MPs. SDP activits and Tan Jee Say are worried about the fate of SMEs,all saying shumthing must be done to help the SMEs, then something must be done to help them?

Maybe not: Where small firms are most common, as around Europe’s southern periphery, their prevalence is sign of uncompetitive markets and low productivity … examines the problem of the stunted European business http://www.economist.com/blogs/freeexchange/2012/03/productivity

Ah, what about the German SMEs? Well the Germans are different. They stated two world wars in the 20th century, lost both of them but 67 years after failing to create a Third Reich is now the dominant European power; restructured their economy when Eurozone interest rates were too high for Germany (they cut real wages and welfare payments, and raised productivity, unlike the lazy, lying, thieving Greeks who only know to riot, lie and steal); and sell to China the machinery to make goods that China exports.

S’poreans are not Germans. For starters, the German government, like the Germans, doesn’t believe in FTs to solve Germany’s vanishing workforce problem: 20% over the coming decades. The Germans believe in robots and moving manufacturing to eastern Europe (their M’sias and Indonesias).

Also unlike our SMEs, the most succesful German SMEs are global leaders in their very specialised fields. Finally most of our SMEs would not fit the German definition of SMEs. Ours would be classified as micro enterprises

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  1. Frankly, the bulk of our SMEs are not worth boasting about – but that’s because even the GLCs are not worth writing about. The world leading MNCs in Singapore no longer do much R&D or product development here so that’s gone as well.

    Of course, the government know all of this, but trying to change reality is very difficult. Then they started importing FT because this is the feedback they get from the world leading MNC. But they execute wrongly and ended up with coal dust then diamonds or carbon fibre.

    The less discussion about our defence sector the less embarrassing it is. At least the Cold War + defence development turned the area around San Francisco Bay into Silicon Valley. No such side effects from our local military industrial complex.

  2. There is a very good reason to help SMEs. They provide a lot of employment opportunities for citizens (eh… and foreigners). If we only focus on profits and efficiency, then a lot of us would be unemployed now. This is because the most cost efficient system is to have a few large players who are capable of large capital expenditures to keep costs at a minimum. However, this will also lead to oligopolies with significant pricing power (look at the REITs situation currently).

  3. SMEs are important to provide cheap labour and services to the MNCs and GLCs. They are part of the Golden Age story.

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