Run by the Economic Development Board (EDB), the PACT programme aims to support knowledge transfer between larger companies and SMEs or startups, and even between similarly sized enterprises.
While companies are typically competitive in nature, there is also scope for collaboration, especially to help build up the expertise in a new industry or collaborate on an overseas venture.
Run by the Economic Development Board (EDB), the PACT programme aims to support knowledge transfer between larger companies and SMEs or startups, and even between similarly sized enterprises.
The project scope for such knowledge transfer typically relates to capability development or business development.
In practical terms, the purpose of the PACT programme is to set up mutually beneficial collaborations between companies. A Lead Enterprise will drive the collaboration to help smaller firms and startups or even similarly sized firms develop expertise in a particular area they currently lack. This also applies to overseas ventures, where one company may lack overseas exposure but have the relevant capabilities.
In March 2018, the Minister for Industry, S Iswaran said in Parliament that partnerships among SMEs and startups will qualify for the programme from 1 April 2018. This removes the requirement that such tie-ups have to be between large organisations and SMEs. At the ministry’s Committee of Supply debate during the same Parliament session, Mr Iswaran announced that the government had allocated S$100 million over the next three years for the revamped PACT programme.
Who Stands To Benefit From The PACT Programme?
Companies with a skill deficit in a certain area can leverage on government funding to learn from larger or similarly sized companies who have integrated that skillset within their operations.
The scope of such project is usually within the fields of integrating new technology, improving supply chain, co-developing and testing a new product, improve cashflow management, pursue international projects, and pooling resources for economies of scale or marketing efforts.
This will help SMEs enter growth industries, new economies, and win high tech business by upgrading their capabilities through partner companies they typically already have established relationships with.
Larger companies, on the other hand, can leverage on smaller SMEs and startups to test-bed innovative solutions.
Types Of Projects Companies Can Pursue
Here are some examples on what counts as capability development and joint business development.
Capability Development
#1 Supplier/Partner Development
A Lead Enterprise helps existing and new suppliers upgrade their technology capabilities, to improve the quality of the supply chain.
#2 Co-innovation
A Lead Enterprise helps to co-develop and test-bed an innovative product from its smaller supplier.
#3 Knowledge Transfer
A Lead Enterprise develops a coaching programme to help its smaller distributors improve their cashflow management skills.
Business Development
#1 Alliances or Consortiums
A Lead Enterprise forms an alliance with smaller firms to jointly pursue new international projects. The smaller firms in the alliance benefit through having new customers/contracts.
#2 Shared Resources
A Lead Enterprise pools common resources with smaller firms to achieve economies of scale and/or engage in shared marketing efforts.
Government Support For Such Projects
Support for SMEs will be capped at 70% of the qualifying costs. For non-SMEs, it will be at 50% of these costs. As you can see, SMEs and even startups will benefit most from the PACT programme. This is also logical as SMEs and startups typically lack resources, compared to larger firms and MNCs, in developing new capabilities.
What Is The Eligibility Criteria To Apply For PACT Programme Funding?
Pact projects should be driven by a Lead Enterprise, which is a Singapore registered company MNC or SME.
The following areas will also be considered:
- The Lead Enterprise should have clear capabilities above those of the other participating companies in the project. It takes responsibility for the implementation and successful delivery of the project.
- The Lead Enterprise should help the participating companies in a manner that is beyond its normal commercial interests. For example, the Lead Enterprise should not be selling its product or service to the smaller firms through the project.
- The project should include a majority of Singapore enterprises, even though foreign companies can be involved in the collaboration.
There is much more information available about the PACT programme, and interested companies can contact [email protected] for application requirements.
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