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Understanding Innovations amongst Singapore SMEs and Start-ups

Published on: 29-Mar-2019

Since 2015, Professor Boh Wai Fong, along with her team members, Associate Professor Marilyn A. Uy, Associate Professor Georgios Christopoulos, Dr Thara Ravindran, Dr Gabriel Henry Jacob, Dr Qingqing Bi, and Mr Caleb Jen, embarked on a research study aimed  at  identifying  the  effect  of  innovation  practices  on  firm  performance  of SMEs  and start-ups  in Singapore.

The three-year study looked at innovation practices, strategies,  entrepreneurial  traits  and  leadership styles  as  well  as  the relative  effects  of  one  or  more  of  these  on performance indicators  such  as  firm  performance  and  growth. 

Data was collected in two waves, from September 2015 to November 2016 and from November 2017 to May 2018, with more than 1,354 entrepreneurs from 305 companies being surveyed.

On 30 January, Professor Boh shared the key findings of her research study with 50 participants at the NBS webinar titled “Understanding Innovations amongst Singapore SMEs and Start-ups”.

Innovation, specifically radical innovation, was found to be as a key predictor of firm performance while evaluation had a significant effect on firm performance and growth.  

The study also showed that entrepreneurs identified business opportunities by 
looking inwards (within their immediate  personal  environment), looking outwards (in the immediate  external environment), and looking beyond (paying  attention to opportunities available  in other  industries  and  countries,  and  also  tracking  emerging  trends and innovative  technological  advancements).  

Strategies  employed  by entrepreneurs  to  innovate  in the  face  of  resource constraints included “resource  combination”,   “contingency  exploitation” , and “options  generation”. Among these, “options generation” had a significant positive effect on both firm performance and growth.

Partnerships with other firms showed a significant and positive influence on firm performance and growth while partnerships with other entities such as government agencies, intermediaries and with other institutions appeared to play a limited role in affecting the firm’s financial performance. Firms which have good relationships with their largest and most important partner reported the highest level of firm performance and growth. 

In terms of leadership style, the study found that the ability to flexibly switch between open or closed leadership styles had significant positive effect on both firm performance and growth.   

Professor Boh also provided some recommendations to policy makers and entrepreneurs based on her findings.

She felt that there is a need to press on with policies that encourage innovation amongst the entrepreneurs as well as to recognise and reward radical innovation. 

Professor Boh also highlighted that a supportive ecosystem through planned matchmaking sessions for developing synergistic partnerships and encouraging cross-industry interactions would enhance the overall entrepreneurial climate within Singapore. 

Another key recommendation was to focus appropriate training and development on innovation in business models and services, entrepreneurial alertness which includes opportunity recognition and evaluation as well as the development of “ambidexterity” in leadership. 

Finally, targeted interventions such as diversified financial support mechanisms to support incubation and implementation as well as pooled HR support to address manpower related problems faced by firms during the growth and sustenance phases can benefit SMEs and start-ups in Singapore.  

Click here to watch the webinar.
Click here to read the full report. 

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