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Do skills and training drive business performance among Singapore SMEs? - An investigation using the Singapore Business Performance and Skills Study II

Jazreel Irvette Tan, Sahara Sadik, Sheng Yee Zher and Chia Ying
 Final Report 
IAL’s key study, Business Performance and Skills Survey II (BPSS2), covering 2,889 Singapore SMEs, reveals that only one in ten firms successfully convert skills and training into tangible business gains. These “Value Creators”, representing just 9.8% of Singapore SMEs, show strong alignment between business and people strategies. This alignment enables them to absorb new capabilities and translate learning into high value-added products, services and processes. As a result, they are significantly more likely to report higher profits, revenue and market share, alongside stronger employee engagement and retention.

In contrast, the largest SME group, Traditionalists (34.1%), invest in training as a core strategy but lack robust business strategies. Despite their training outlays, they experience declining performance. The findings point to a critical gap in Singapore’s SME landscape: strategically strong firms train and grow stronger, while weaker firms continue to struggle even as they invest in training. This challenges the assumption that expanding training participation alone leads to better business outcomes.