Business Sentiments of ICT Companies (FY20Q3)
Business Sentiment | 11 Dec 2020
Business Sentiments of ICT Companies in FY20Q3
AN INDSIGHTS RESEARCH REPORT SUMMARY
The Business Sentiments Survey ascertains how the Information & Communications Technology (ICT) companies in Singapore are adjusting to the current global and domestic economic environment. The survey by IndSights Research was done in October 2020, with close to 450 ICT businesses.
The COVID-19 pandemic has led to severe contractions in economies worldwide. Nevertheless, business sentiments seem to indicate that ICT companies in Singapore are slowly adapting to the situation, with growing optimism that the year ahead will be better. This is underscored by an improving revenue picture.
Amidst a new economic reality, many companies are seeking out new opportunities, and continuing to increase their investment in digitalisation. Despite the challenges posed by the pandemic and ongoing recession, the data gathered from across different industries shows that ICT companies are generally on a better footing than other sectors. While some companies are struggling, there are many who have managed to keep things on an even keel, and others who are even thriving in the challenging environment.
Compared to the previous quarter, the sentiment on Singapore’s economy has improved, with fewer companies rating it as poor and more leaning towards an average rating.
In our previous findings, we noted that the ICT sector seemed to be relatively less affected by the pandemic. Our survey findings this quarter are in line with this, where we see the sentiment for the ICT industry picking up, with ratings recovering close to pre-COVID levels.
As we noted in our summary findings for FY20 Q2 (link), some ICT business leaders we spoke to are expecting the real hit to be reflected when the various forms of government grants, subsidies and other support taper off. It remains to see what the impact on sentiments will be then.
In the meantime, 1 in 2 ICT companies remained optimistic that Singapore’s economy and its ICT industry situation would be better in a year’s time.
IMPACT OF COVID-19 AND BUSINESSES
52% of ICT companies reported that they were at least moderately impacted by the COVID-19 pandemic. Compared to the 67% which felt similarly at the start of COVID-19 (link to FY20 Q1), this bodes well for the ICT sector.
In addition, 40% of ICT business leaders expected an increase in revenue, affirming the positive sentiments observed.
While our summary findings applies only to the ICT sector, it corroborates with the general sentiment reported in mainstream media and analysts such as this recent commentary on the impact of COVID-19 on Singapore’s economy.
Between July to September, 1 in 3 ICT companies created jobs despite the pandemic. The number of tech heavy jobs created increased 19% from the April-June period. However, only 34% of the created positions were filled, indicating a possible lack of the right talent in the market.
In November this year, the Economic Development Board (EDB) announced the launch of the ‘Tech.Pass’, a new work pass aimed at attracting “founders, leaders and technical experts”. We expect this initiative to increase and improve capacity in the ICT sector to have a further positive impact on the ICT industry.
BUSINESS STRATEGIES AND COMPANIES’ PLANS
COVID-19 has spurred digital transformation, for example, where many businesses were forced to adapt to survive with office closures and global lockdowns. Of the companies polled, 32% planned to increase their budgets for digitisation. Other strategies included increasing budget for training and R&D.
Furthermore, some of the key actions being considered by ICT companies are the seeking of additional funding to stay afloat (28%) and re-organising their workforce (20%). Other plans include reducing staff compensation, cost sharing with other businesses, and/or relocating out of Singapore.
BUILDING A SINGAPOREAN CORE
The discussion on the Singaporean core in the workforce has resurfaced in the recent months due to heightened job insecurity amidst the economic downturn. To reassure citizens, the Government has pledged to strengthen the Singaporean core. 2 in 5 companies are considering hiring more Singaporeans to fill new positions to build their local workforce.
In line with the Government’s push to build a strong Singaporean core, some actions that were considered by the ICT companies who participated included hiring more Singapore to fill new roles (44%), training more Singaporeans to fill roles currently held by foreigners, and offshoring roles currently head by foreigners.
For companies in the ICT industry, the government provides various support and programmes. Some of the digitalisation grants include SME Grow Digital or Advanced Digital Solutions. Other governmental support includes the Career Support Scheme, Capability Transfer Programme, and the TeSA company-led training programme.
You may read more about the additional support in the infographics. In addition, visit our one-stop resource page to browse assistance schemes grouped according to business stage/function, or search for relevant schemes via GovAssist.
About the Study
This quarter’s survey collected views from 451 business leaders from the ICT industry, in October 2020.
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