SINGAPORE – More Singapore companies went into new overseas markets for the first time in 2023, compared with pre-pandemic days.

Mr Peter Ong, chairman of Enterprise Singapore (EnterpriseSG), hopes this is going to be a long-term trend of local firms venturing out globally. This is as companies heeded the agency’s clarion call to make up for lost time during Covid-19 and go beyond Singapore’s shores once the pandemic ended.

In a media interview by the outgoing executive looking over his time leading the agency, Mr Ong said there was a 66 per cent increase in companies venturing into new markets for the first time in 2023, compared with 2019. This refers to companies that went overseas for the first time, or those that already have overseas operations but set up shop in a new market.

He said: “Internationalisation in 2023 and 2024 is no longer just for the big boys... but even for smaller first-timers.

“It gave us a lot of encouragement that Covid-19 changed their mindset, where (previously) they were content to stay at home and try and do something big in the local market, now they realise that there is no choice and they better go out. We are very excited and hope that will continue.”

In fact, going overseas is so important to companies that it should be part of their plan from the moment they are born, he said. This is because the domestic market is so small and going overseas is the only way for firms to grow in size and scale.

“For big land masses and big populations, companies don’t have to worry about internationalisation until far later in their lifespan. For us, there’s almost no choice from day one for those keen to grow and make their mark,” he said. “You need economies of scale, your innovation cost needs to be spread out over a large market.”

Mr Ong added that it is a big challenge because it means that companies have to think of venturing overseas while they are still young, do not have much resources and directors are less experienced.

“Almost every place that you go out to... is a totally different business environment that is quite unlike Singapore. Two minutes after leaving Singapore airspace, you have to innovate your product... because it’s a very different market. That is the challenge.”

This is important even as the global business environment grows more complex. Mr Ong noted that it almost feels like “some kind of permanent crisis”, with disruptions arising from political, technological and economic issues, as well as the transition through climate action.

“For smaller companies trying to navigate the world, it can be tough,” he said, adding that EnterpriseSG tries to smoothen the path for them. “If they are prepared to take the plunge and go overseas, especially to a frontier market, it’s our job to help them as much as we can.”

The agency supports firms going overseas by matching them with larger business partners there or even opening pop-ups so smaller companies can test the market. For example, a New York pop-up at Showfields department store in 2023 helped local brands like shoe retailers DMK and Anothersole take products to a new consumer market in a low-risk way.

EnterpriseSG also ramped up its Global Innovation Alliance from 2019 to launch more acceleration programmes to connect Singapore companies to major innovation hubs and key markets in 21 cities, including in China, Indonesia, India, Japan, the United States and Britain.

Indeed, Mr Ong feels that Singapore companies will continue to be in good standing overseas even amid a volatile business environment, with ongoing conflicts in Ukraine and the Middle East, and attitudes towards globalisation.

“This retreat from globalisation is troubling. We have to operate on the basis that the world remains free and open for anyone that wants to do cross-border flows and transactions, but we cannot assume that will continue. We will definitely want to join forces with like-minded countries to keep drumming home the point that we need an open system for all countries to co-prosper,” he said.

Geopolitical tensions make things harder for companies, Mr Ong said, but Singapore companies are also perceived to be neutral parties to partner with and are favourably looked upon.

“People value Singapore partnerships... look to Singapore companies as neutral, reliable parties that keep a high quality and standard,” he said.

Hence, Singapore firms should still be aggressive and go out, he added, noting that South-east Asia continues to have many opportunities.

Indeed, this takes Mr Ong back to the mandate of EnterpriseSG when it was first formed in 2018, out of Spring Singapore and IE Singapore, to drive productivity through digitalisation, innovation and internationalisation.

This led to programmes such as Scale-Up, which helps companies that want to grow fast. It is now into its ninth cohort, with 92 companies having participated in it. The 47 companies in the first three cohorts saw average revenue growth of 68 per cent within two years of joining the programme.

Companies were also encouraged to take on digital solutions the moment they set up shop so they could raise their productivity, Mr Ong said.

During the pandemic, EnterpriseSG had to shift to focusing on economic resilience instead. The period saw firms being forced to go digital quickly, as the agency helped to onboard more than 10,000 food and beverage, and retail companies on e-commerce and delivery platforms.

Even after the pandemic, the share of sales that occur online remains higher than pre-pandemic levels, noted Mr Ong, a former head of Singapore’s civil service.

As the agency’s chairman since it started in 2018, Mr Ong, 62, has seen it through these tumultuous periods, but now looks forward to growth. The challenges continue, with firms needing to adapt to new technologies like artificial intelligence and grasp opportunities in the climate space.

Mr Ong will be succeeded by Mr Lee Chuan Teck, who is currently the chief executive officer of EnterpriseSG, on April 1.

Singapore’s own potential for renewable energy is limited, but the region offers “tremendous opportunities”, he said, adding that Singapore can provide sought-after solutions like innovative green financing, with expertise in carbon credit accounting, for instance.

Hence the road ahead, though ridden with complexity, remains bright for Singapore firms.

Over the next decade, Mr Ong hopes to see many more Singapore companies take their place in the global market with local brands and services that are competitive and innovative, which also means better jobs for Singaporeans.

“Once you’re on the innovation bandwagon, you can’t stop. You just keep on improving because the competition will come at you, and you always have to stay one step ahead, if not several steps ahead,” he said.