Productivity Solutions Grant (PSG) In Singapore: How To Maximise Funding For Business Growth

Singapore’s Productivity Solutions Grant (PSG) is a vital government initiative to help small and medium-sized enterprises (SMEs) adopt technology and enhance productivity. By subsidising pre-approved digital solutions and equipment, the grant enables businesses to streamline operations, reduce manual workload, and improve overall efficiency. 

From retail and logistics to construction and food services, companies across various industries have leveraged PSG funding to stay competitive in an increasingly digital economy. This article explores how the PSG grant in Singapore works, its eligibility criteria, the types of solutions available, and how SMEs can maximise its benefits for long-term growth.

Key Takeaways

• The Productivity Solutions Grant helps SMEs in traditional sectors modernise by subsidising up to 50% of qualifying costs, enabling them to adopt pre-approved digital solutions.
• Despite available support, high implementation costs, digital skills gaps, resistance to change, and limited awareness of PSG-funded solutions hinder digital adoption.
• PSG covers various digital tools tailored to different industries, including CRM systems, inventory management, cloud accounting, and cybersecurity solutions.
• SMEs can apply through the Business Grants Portal (BGP), ensuring a streamlined process, provided they meet eligibility criteria and choose from pre-approved vendors.
• Adopting PSG-supported solutions improves efficiency, resilience, compliance, and competitiveness, positioning SMEs for sustained growth in a digital economy.

What is the PSG Grant in Singapore?

Image Credit: BCA.gov

The Productivity Solutions Grant (PSG) is a pivotal initiative by the Singaporean government to empower small and medium-sized enterprises (SMEs) to adopt technology and enhance productivity. By subsidising pre-approved digital solutions and equipment, the PSG enables businesses to streamline operations, reduce manual workload, and improve overall efficiency.

In today’s rapidly evolving business landscape, digital transformation has become imperative, especially for traditional sectors such as construction, agriculture, and manufacturing. These industries have historically been labour-intensive and slower to adopt technological advancements. However, with global trends pushing towards automation and sustainability, there’s an increasing need for these sectors to modernise.

This article delves into how traditional Singapore industries leverage the PSG to modernise their operations. We’ll explore the specific digital solutions being adopted, the challenges faced during this transition, and the tangible benefits realised by businesses. 

By understanding these dynamics, business owners and marketers can better appreciate the opportunities to enhance productivity and maintain competitiveness in an increasingly digital economy.

Understanding Traditional Sectors and Their Challenges

Labour-intensive operations often characterise traditional sectors such as construction, agriculture, and manufacturing, slow adoption of technology, and a heavy reliance on manual processes. This conventional approach can lead to inefficiencies and reduced competitiveness in a rapidly evolving market.

Several key barriers hinder the digitalisation of these industries:

• Cost Concerns: Implementing advanced technologies often requires substantial upfront investments, which can significantly deter businesses from operating on thin margins.
• Lack of Expertise: Many traditional industries lack skilled personnel to manage and maintain digital systems, making the transition to new technologies challenging.
• Resistance to Change: There is often an inherent reluctance to alter established workflows and processes, stemming from uncertainty about the benefits of digital transformation and fear of job displacement.
  

Global trends are exerting pressure on these sectors to embrace transformation:

• Automation: The rise of automation technologies is reshaping industries worldwide, offering opportunities to enhance efficiency and reduce operational costs.
• Sustainability: There is a growing emphasis on sustainable practices, prompting industries to adopt technologies that minimise environmental impact and promote resource efficiency.
  

Singapore’s government has recognised these challenges and actively promotes initiatives like the Productivity Solutions Grant (PSG) to support SMEs’ digitalisation efforts. This grant aims to alleviate financial burdens and encourage technology adoption to enhance productivity and competitiveness.

Eligibility Criteria

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To qualify for the PSG grant, businesses must meet specific eligibility criteria. These include the following:

• Company Registration and Operations: The business must be registered and operating in Singapore. This ensures that the grant supports local enterprises that contribute to the domestic economy.
• Local Shareholding: The requirement that Singaporean citizens or permanent residents hold Singaporean citizenship or Permanent residency underscores the government’s intent to bolster locally owned businesses.
• Business Size: The company should qualify as a Small and Medium Enterprise (SME), defined by either an annual sales turnover not exceeding S$100 million or an employment size not exceeding 200 workers. This criterion focuses the grant’s benefits on smaller businesses needing financial support for digital transformation.
• Solution Deployment: The IT solutions, equipment, or consultancy services acquired must be utilised within Singapore. This ensures that the grant funds are used to enhance local business operations.
• Additional Criteria for Specific Solutions: Certain solutions have different eligibility criteria for the programme. It’s best to consult with a specialist to learn the specifics related to your industry. 
  

It’s important to note that businesses should not have signed contracts or made any payments related to IT solutions, equipment, or consultancy services before submitting the PSG application. This ensures that the grant supports new initiatives rather than reimbursing past expenses.

Types of Funding Available

The PSG offers financial support to Singaporean small and medium-sized enterprises (SMEs) aiming to enhance their productivity through technology adoption. The grant covers up to 50% of qualifying costs, with a funding cap of S$30,000 per company over three years from 1 April 2023 to 31 March 2026.

PSG supports a wide array of pre-approved solutions tailored to various sectors, including:

• Sector-Specific Solutions: These are designed to address the unique needs of particular industries. For instance, the construction sector can access digital solutions under the Construction and Facilities Management Industry Digital Plan (IDP), which has been assessed for effectiveness and cost-efficiency.
• Generic Solutions: These solutions, which are applicable across multiple industries, include customer relationship management (CRM), human resource management systems (HRMS), and accounting software.

Pre-Approved Solutions

The PSG supports a wide range of pre-approved solutions tailored to various industries. These include:

• IT Solutions: Software applications such as customer relationship management (CRM), accounting software, and inventory tracking systems.
• Equipment: Tools and machinery that enhance operational efficiency, such as automated packaging systems or specialised manufacturing equipment.
• Consultancy Services: Expert guidance to improve business processes, including strategic planning, financial management, and human resource development.

It’s important to note that the PSG is part of Singapore’s broader strategy to align businesses with Industry Transformation Maps (ITMs) and Industry Digital Plans (IDPs), ensuring that the supported solutions are relevant and practical.  

By leveraging the PSG, SMEs can adopt these solutions to streamline operations, enhance efficiency, and remain competitive in the evolving business landscape.

PSG-Supported Digital Solutions for Traditional Industries

The PSG has played a crucial role in helping SMEs adopt digital solutions to improve efficiency and competitiveness. Traditional industries, such as construction, agriculture, and manufacturing, have historically relied on manual processes and conventional workflows. However, with increasing demand for automation and efficiency, these sectors are turning to PSG-supported solutions to modernise operations and stay relevant.

Construction Industry

The PSG supports various digital solutions in the construction sector to streamline processes and improve safety. For instance, the Hubble Safety Management System, a pre-approved solution under the Infocomm Media Development Authority’s (IMDA) SMEs Go Digital Programme, provides modules for Permit-to-Work (ePTW), toolbox meetings, equipment inspections, and safety inspections.

Collectively, these features enhance on-site safety and operational efficiency.

The Building and Construction Authority (BCA) has also introduced an enhanced PSG tranche available from 1 April 2023 to 31 March 2026. This enhancement includes a broader range of pre-approved digital solutions to help SMEs build digital capabilities and improve productivity, with a greater emphasis on training and capability building.

Agriculture and Landscaping Industry

While the PSG does not explicitly list agriculture-specific solutions, related sectors such as landscaping and animal management can benefit from the Landscape and Animal Sector Productivity Grant (LAPG). This grant helps companies defray the cost of purchasing equipment and create new digital solutions to streamline work processes, encouraging digitalisation to enhance productivity.

General Solutions Applicable Across Industries

Beyond sector-specific solutions, the PSG also supports a variety of digital tools applicable across multiple industries, including:

• Customer Relationship Management (CRM) Systems: Manage customer interactions, improve business relationships, and drive sales growth.
• Human Resource Management Systems (HRMS): Automate HR processes such as payroll, attendance tracking, and performance evaluations.
• Accounting Software: Reduce manual errors and ensure compliance with financial regulations through automated financial processes.

By adopting these PSG-supported digital solutions, traditional industries can overcome operational challenges, enhance efficiency, and maintain competitiveness in an increasingly digital economy.

How to Apply for the PSG Grant

Applying for the Productivity Solutions Grant involves a structured process designed to assist Singaporean SMEs in enhancing their productivity through technology adoption. The application process comprises the following steps:

1. Identify Suitable Solutions: Explore the pre-approved IT solutions and equipment relevant to your business needs on the GoBusiness Gov Assist portal. These solutions, curated to address various industry-specific requirements, are available for purchase.
2. Obtain a Quotation: Contact the pre-approved vendor of your chosen solution to request a detailed quotation. This document is essential for your grant application and should outline the costs and specifications of the solution.
3. Submit Your Application via the Business Grants Portal:
   • Access the Portal: Navigate to the Business Grants Portal (BGP) and log in using your CorpPass credentials.
   • Initiate a New Grant Application: Within the portal, select the option to apply for a new grant and choose “Productivity Solutions Grant” from the list of available grants.
   • Complete the Application Form. Provide all necessary information, including your company’s details, the selected solution, vendor information, and the quotation obtained. Ensure that all required documents are uploaded to support your application.
   • Review and Submit: Carefully review your application for accuracy and completeness before submission.
4. Await Application Outcome: After submitting your application, monitor your email and the BGP for updates on its status. Processing times may vary, so regular checks are advisable.
5. Accept the Letter of Offer: If your application is approved, you will receive a Letter of Offer detailing the grant amount and terms. Accept this offer through the BGP to proceed.
6. Implement the Approved Solution: Once the grant is approved, collaborate with the vendor to deploy the solution in your business operations. Ensure that the solution is used effectively to achieve the desired productivity improvements.
7. Submit a Claim for Reimbursement: After implementing the solution and ensuring it has been used for at least one month, prepare to submit a claim for reimbursement.
   • Prepare Necessary Documentation: Gather all required documents, including invoices, proof of payment, and any other evidence of solution deployment.
   • Submit via the BGP: Log in to the BGP, access your approved application, and follow the instructions to submit a claim. Upload all necessary documents to support your claim.
   • Await Reimbursement: The processing of claims may take some time. Monitor the status of your claim through the BGP and your email.

The official guide provided by Enterprise Singapore provides a comprehensive, step-by-step guide on the PSG application process. 

Why You Should Apply for the PSG Grant

The PSG offers businesses tangible benefits that go beyond just financial assistance.

By reducing the cost burden of adopting pre-approved digital solutions, SMEs can accelerate their transformation without straining their budgets. This allows them to invest in technologies that improve operational efficiency, streamline workflows, and enhance overall business performance. With PSG covering up to 50% of qualifying costs as of 2024, eligible businesses can make strategic upgrades with reduced financial risk.

Beyond cost savings, the PSG empowers businesses with enhanced productivity and efficiency. Digital solutions such as automated invoicing, cloud accounting, and customer relationship management (CRM) systems enable companies to reduce manual workloads, minimise errors, and improve turnaround times.

These improvements lead to better resource management, allowing teams to focus on higher-value tasks rather than routine administrative work.

Another key benefit of PSG-supported solutions is improved business resilience and competitiveness. In an increasingly digital economy, businesses that fail to modernise risk falling behind. With PSG, SMEs can adopt data-driven decision-making tools, e-commerce platforms, and cybersecurity measures that strengthen their ability to adapt to market changes.

For instance, businesses leveraging inventory management systems can better handle supply chain disruptions, while those using digital marketing solutions can reach a broader audience online, improving customer engagement and sales.

The grant also facilitates regulatory compliance and industry alignment, especially in sectors where digitalisation is becoming required. Industries such as finance, healthcare, and construction are seeing increased mandates for digital record-keeping, security protocols, and automated reporting. PSG-supported solutions help businesses comply with evolving regulations, reducing risks associated with outdated practices.

Moreover, PSG adoption lays the foundation for long-term digital transformation. Businesses that successfully integrate PSG-funded tools often find it easier to scale operations and adopt more advanced technologies in the future. This creates a ripple effect, where initial digitalisation efforts open doors to further innovation, such as artificial intelligence (AI) integration, cloud computing, and data analytics.

By taking advantage of the PSG, businesses reduce upfront costs and future-proof their operations, making them more agile and competitive in an evolving market landscape.

Apply for the PSG Grant in Singapore

The Productivity Solutions Grant (PSG) presents a valuable opportunity for SMEs to embrace digital transformation with government support. By leveraging PSG-funded solutions, businesses can enhance productivity, streamline operations, and stay competitive in an evolving market. However, navigating the grant application process and selecting the right digital tools can be challenging.

To maximise the benefits of the PSG Grant in Singapore, SMEs can seek guidance from the SME Centre or work with an accredited PSG Grant Vendor like MediaOne. With expert support, businesses can ensure a smooth application process and implement the most effective digital solutions for long-term success.

Frequently Asked Questions

What is the PSG grant in Singapore?

The Productivity Solutions Grant (PSG) is a government initiative that helps SMEs adopt pre-approved digital solutions and equipment to enhance productivity. It covers up to 50% of qualifying costs, making digital transformation more accessible for businesses across various industries.

What is the difference between PSG and EDG grants?

The PSG supports SMEs in adopting pre-approved digital solutions to improve productivity. At the same time, the Enterprise Development Grant (EDG) funds broader business transformation projects, including innovation, internationalisation, and strategic capability development. PSG is for ready-made solutions, whereas EDG is for customised projects requiring more profound transformation.

What does PSG cover?

The PSG grant covers pre-approved digital solutions, equipment, and consultancy services to help SMEs improve efficiency. This includes CRM systems, e-commerce solutions, cloud accounting, cybersecurity, and industry-specific tools. Funding applies only to solutions from approved vendors listed on the Business Grants Portal (BGP).

What is low income in Singapore?

Low income in Singapore is generally defined by schemes such as the Workfare Income Supplement (WIS), which applies to individuals earning $2,500 or less monthly. The Ministry of Social and Family Development (MSF) also considers households earning $1,600 or less per capita for specific financial aid programmes.

When did the PSG grant start?

Enterprise Singapore, IMDA, and various government agencies launched the PSG grant in April 2018 as part of the SMES Go Digital programme. The grant aims to help local businesses adopt digital technologies and improve productivity in an increasingly competitive market.