In 2018, it was reflected in a Channel News Asia article that “50% of firms (are) still not clear about Industry Transformation Maps (ITMs)” despite the fact that ITMs were launched over three years ago in September 2016. It also mentioned that unaware SMEs that have been slower to adopt the transformations suggested in the ITMs have had “lower business profitability (reported) over the past 12 months”.
If you are running an SME and are not clear on the ITMs of your industry, fret not! In this series, we will break down the key takeaways of ITMs to help your business maximise benefit from it.
What are Industry Transformation Maps (ITMs)?
ITMs were launched by the Government in 2016 to bring together industry stakeholders to implement transformation roadmaps for 23 industries. Each ITM integrates 4 key pillars of transformation: jobs and skills, innovation, internationalisation and productivity; and stakeholders included firms, trade associations and chambers (TAC), economic agencies, etc. Budget 2019 revealed productivity (real value-added per hour worked) has increased by 3.6% in the past three years after the implementation of ITM, which is higher than the 1.6% annual productivity growth from 2012 to 2015.
Construction Industry Transformation Map (ITM)
The construction industry is undergoing transformations to modernise the technologies used in the building process and to streamline the construction process. We will break down 2 key transformation areas listed in the ITM which comprises of:
- Digitising the construction process
- Moving towards modular construction
Digitising the construction process
By using Integrated Digital Delivery (IDD) technologies, a cloud system allows different parties working on a building project to easily share information through a Building Information Modelling (BIM) which is a 3D model of the building embedded with information. The adoption of IDD will ensure that all parties have a clear common vision and understanding of the construction process, thereby reducing mistakes, delays and need for rework. It will also accelerate the construction process and make it easier to access building information during future maintenance or retrofitting.
Moving towards Modular Construction
Modular Construction utilises Design for Manufacturing and Assembly (DfMA) technologies to move most of the construction work off-site to a controlled factory environment. This involves storing and building construction modules off-site (in prefabrication hubs) then transporting these modules on-site when needed. This is especially necessary for land-scarce Singapore which has increasingly limited capacity for on-site storage of construction materials. The controlled factory environment will also make the installation process safer and more efficient as well as create more job opportunities in factories.
What does this mean for your SME?
To stay competitive, it is imperative for SMEs in the construction industry to evolve with these transformations and gradually adopt the new technologies. We understand that cash flows are often tight for SMEs in the construction industry due to large initial outlays for projects, and these technologies (such as DfMA) may be costly to adopt. However, these technologies will help to speed up construction time and reduce reliance on manpower which may lead to higher profits in the long-run.
Alternative Financing Options: Peer-to-Peer (P2P) Loans
Many SMEs may face difficulties in obtaining loans at traditional financial institutions to fund the adoption of these technologies, often due to their limited credit history and collateral. If you are facing similar struggles, it will be beneficial to look into P2P loans which are a form of debt crowdfunding. It allows investors to directly fund borrowers’ loans through an online platform to earn interest in return. This is incredibly beneficial for SMEs as the process is quick, easy and does not require collateral. A good place to look into is Funding Societies which is the largest P2P platform in SouthEast Asia and is licensed by the Monetary Authority of Singapore (MAS). It offers flexible, short-term and customisable business loans to meet your financing needs. You can find out more on P2P loans at Funding Societies from “Peer-to-Peer Loans and Why You Should Consider Them”.
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