The three finalists of this year’s EY Entrepreneur of the Year were named amid the worst economic crisis Singapore has ever experienced.
They are Richard Koh Seoh Leng, founder and CEO of FinTech firm M-DAQ; Eric Leong Jia-Le, managing director and co-founder of steel provider Mlion Corporation, and Ian Ang, co-founder and CEO, Secretlab, the maker of designer chairs for computer gamers.
But the constant, in both good and bad times, is what defines an award-winning entrepreneur, says managing partner of EY Singapore and Brunei Max Loh.
“They come from different categories, but they have the same traits: Resilience, perseverance, grit, they strive against all odds, they embrace digital technologies, transformation and all these other wonderful things that we do expect to see in entrepreneurs,” says Loh in an interview with The Edge Singapore.
This is the 19th year of the awards. While a minister in charge of one of the economy-related portfolios had graced previous awards ceremony as its guest of honour, this year, EY has invited Minister for Home Affairs and Law K Shanmugam.
Loh says that is because Singapore’s legal framework has enabled entrepreneurship to flourish, in both good and bad times.
In June, the Ministry of Law introduced the Covid-19 (Temporary Measures) (Amendment) Bill in Parliament to enhance the relief available to businesses — especially SMEs — as well as organisations and individuals who are unable to fulfill their contractual obligations because of the pandemic.
“If you don’t have a good legal framework to help people ride out the crisis, even if you are the best entrepreneur, you can’t survive. Everything that we do as a society is all interconnected,” explains Loh.
Is the worst over?
No thanks to Covid-19, Singapore’s economy plunged 13.2% y-o-y in 2Q2020, but recovered somewhat to contract at just 7% in 3Q2020. Some economists have called a bottom but Loh stops short of saying the worst is over.
“I am quite confident we are on way to Phase Three but the problem is that Singapore does not live in isolation. We are part of the global framework and ecosystem, and not all other countries are at this stage. Even if we open up Singapore but the world is not open, what can we do? Our airline cannot fly and tourism can’t come back,” says Loh.
“We have 5.6 million people. How do you get the economy going when the world doesn’t engage with us? We can engage with them digitally but there are certain sectors that still need that physical interaction. At end of the day, is the worst over? Possibly. But some say it is going to get worse before it gets better. This is especially so with the retrenchment and employment situation, which are lagging indicators,” he says.
Given government support will run out over time, Loh expects the number of companies going bust to increase. Nevertheless, there is anecdotal evidence of an economic pick-up — the crowds are back at shopping malls and queues outside popular restaurants. “At the end of the day, people still want to go out and eat and shop,” says Loh, who expects malls to be even more crowded in the coming year-end season as travel is still largely restricted. “That’s the limitation of us as a vibrant but small nation. There’s no domestic travel and you can only go Pulau Ubin.”
Loh believes that flag carrier Singapore Airlines will recover at a slower pace than other airlines as it does not have a domestic market. While the situation is dire, he warns against the lifting of travel restrictions too soon, especially for leisure travellers, as case infections might increase again. “You cannot run this risk after spending $100 billion,” he says, referring to the unprecedented government support package.
Despite widespread travel ban, Loh says some of his colleagues are still travelling across the region to meet clients and partners, and to build ties and close deals. “You can’t just sit in a room, log on a computer and do Teams and Zoom and get projects done,” explains Loh.
Forced transformation
If there is a silver lining in the Covid-19 pandemic, it is how companies are forced to transform their business models and cost structures, even those in resilient sectors such as technology and pharmaceuticals.
Loh agrees that for now, many businesses are more focused on being cash flow positive while putting transformation on the backburner. Like it or not, that has an inadvertent impact on professional services firms like EY. “The opportunities are there, but the pricing is tougher, and maybe, decision-making in projects is slower — which is understandable.”
Although Loh candidly admits EY has to price its fees more competitively for now, that is just the reality of supply and demand in action. More importantly, EY needs to equip its staff with better and newer skills to stay relevant for their clients in the new normal. “Some old skills will still be necessary, like communication, leadership and empathy, but there’s a need to reskill and upskill in a big way. For example, everyone needs to be a data analyst now and that’s absolutely critical,” he says.
However, given the strain on the business environment, Loh is seeing an uptick in restructuring work. “Unfortunately, some companies will not survive Covid-19 but those that do need restructuring to put them on a stronger footing going forward,” he says.
Calling it a turnaround service, Loh describes how EY will go in and help revamp the business models, look at their cost structure and recommend ways to make their products and services more resilient and stable. “You may say the business is profitable, but as the world changes and the competitive landscape gets rougher, if companies don’t have a clear strategy to pivot for the future, then it is a matter of time before they face difficulties again,” explains Loh.
Sustainability is resilience
Besides transformation, another popular theme in the business community in recent years is that of sustainability, where companies show they are socially responsible and care not just the environment but their people, their community and, at the same time, maintain high standards of governance.
Again, although that might have been pushed down the agenda, Loh argues that sustainability is linked to the concept of resilience. “You can only be sustainable if you are resilient to shocks, from Covid-19 to macro-economic swings to geopolitical tensions. Sustainability is not just about dealing with climate change but also about the sustainability of the business.”
“Everybody’s going to look at sustainability as a business imperative. Corporations must think of the long term and what is their long-term value, which ties in with EY’s ambition of creating long-term value,” he adds.
To be sure, there is some scepticism regarding this whole talk on sustainability but Loh believes more companies will come onboard. “Sometimes, these things do slow down because of other immediate challenges but it should be on the minds of most companies that they need to do their bit and this is not a government issue alone,” says Loh.
Next year, EY will be organising the awards for the 20th time. Might there be a new award to recognise enterprises for their sustainability efforts? “Absolutely. That’s something to think about,” says Loh. However, he is quick to add that if such an award is given, sustainability should not be the only judging criteria.
There is something Loh is definitely looking forward to though — the return of a physical event, traditionally held at Monte Carlo in June. However, if Covid-19 cases continue to rise in Europe, EY might use Singapore as an alternative venue, he says. “It is a milestone for the programme to run its 20th year and it does warrant something bigger, better and more innovative,” adds Loh.
