Smart Moves in Uncertain Times: The Innovation Blueprint

By Chiu Wu Hong, Partner, Head of Private Enterprise, KPMG in Singapore

The small- and medium-sized enterprises (SMEs) in this year’s Enterprise 50 Awards need no reminding that we live in challenging times, and many have proactively reshaped their innovation strategies in response.

They recognise this is essential to deal with the pressures of the current environment that include fast-shifting tariffs, supply chain disruptions and evolving regulatory demands in key markets.

Their approach stands out because dealing with such challenges often triggers a defensive response – to cut costs, conserve cash and defer investments in innovation.

However, this year’s array of Singapore’s most inspirational SMEs know that would be the wrong approach. As the histories of many of the world’s greatest firms show, periods of uncertainty can be turned into opportune times, but only if it is done right.

What, though, does good innovation look like for this year’s E50 Awards contenders? At the heart of this is adaptive resilience – the ability to innovate in ways that not only solve immediate challenges but also build flexibility for the future.

Winners this year have shown this in two areas: first, they are pragmatic with prospective solutions and partner to optimise resources; second, they avoid chasing the latest tools when implementing technology, and instead take a practical approach.

Being pragmatic means balancing immediate needs with future aspirations. While it is only natural that SMEs facing cost pressures or compliance hurdles will focus on today’s challenges, good innovators know these short-term actions should also lay the foundations for tomorrow’s growth.

As we know from our work with clients across industries, modular strategies – where, say, AI investments can be piloted and then scaled flexibly – allow businesses to remain agile while staying anchored to long-term goals.

The key is to operate with both horizons in view— build for endurance while responding rapidly to change. Being overly short-term risks stagnation; being entirely long-term risks irrelevance. Good innovation requires managing both well.

Additionally, good innovation looks to optimise resources with judicious partnerships. As many SMEs know, heavy upfront spending is not necessarily a prerequisite for innovation.

Most, in fact, cannot afford costly outlays of capital. Consequently, the smartest achieve outsized impact through partnerships with likeminded organisations – whether this means teaming up with multinational corporations to drive growth, particularly in other regions, or by joining digital platforms to gain access to new markets.

By collaborating in these ways, SMEs can scale their capabilities, share risk and access the talent or technologies they lack in-house. Moreover, this approach can extend to staff mobility programmes, which can serve as an entrance to new markets via exchanges of skills and the ability these offer to generate new cross-border insights.

The second crucial aspect is that good innovation is not about chasing the newest tools. To be sure, technology is one of the most powerful levers of innovation, but it can only be an enabler. Deploying technology for its own sake cannot be the end.

The most successful SMEs embed technology like AI, data and automation into their core business strategies in practical and targeted ways.

They seek quick wins, like digitising processes, enhancing customer engagement and freeing up talent for higher-value tasks, rather than embarking on abstract, multi-year projects. Companies that arm themselves with a culture of rapid experimentation and continuous learning are primed for faster results and stronger ROI.

For example, one of the E50 companies in the logistics industry had installed a system that allowed it to track delivery vehicles in real time, and used AI to plan delivery routes to ensure the most efficient use of time and resources.

Smartly deployed technology helps firms stay close to their customers – which is a core marker of good innovation, particularly in disruptive periods when clients’ needs can shift fast. SMEs that listen, adapt and tailor solutions to those changing requirements stand out and build resilience and loyalty.

Another way that organisations achieve this is to leverage data analytics to anticipate emerging demands in their products or services, and then fine-tune their offerings. It goes without saying that SMEs that are empathetic and responsive to their customers are far more likely to succeed.

Ultimately, as the old saying goes, change is the only constant, which is why SMEs will continue to face an unpredictable global environment with challenges new and old reshaping the landscape.

The solution is not to move fast at all costs, but to move forward intelligently.

The world is more complex than ever, which means SMEs that can innovate smartly, collaborate and keep customer needs uppermost will overcome the risks of the moment while building the resilience that they and Singapore need to excel.

This year’s E50 Awards show that the smartest SMEs, faced with limited resources and an uncertain future, are thinking differently, experimenting and streamlining.

For them, good innovation means acting decisively and with agility to leverage digital tools, collaborate across ecosystems and continuously rethink business models.

They have not only embraced transformation via good innovation to drive long-term value; they also know this process is unending because in a challenging world standing still is the biggest risk of all.