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SMEs play huge role in Asean's future growth

Publication Date : 15-10-2012


ASEAN and Germany see SMEs as Future for Growth
Small and medium enterprises will play a big role as Asean moves toward regional economic integration in three years’ time, experts said at a conference held in Bangkok last week.

The conference, "SME Sector in the AEC 2015” was organised by the Konrad Adenauer Stiftung, Chula Global Network and the Asean Studies Centre of the Chulalongkorn University.

A German lawmaker said SMEs have been very important in his country’s economic growth and it could be the same case for Asean.
“ Without SMEs Germany wouldn’t be what it is,” said MP Michael Fuchs, who can look back on two decades of experience with SMEs in Germany.

Wimonkan Kosumas of the Office of SMEs Promotion said SMEs will serve as the backbone of Asean.

SMEs, which constitute 30 to 53 per cent of the GDP and 19 to 31 per cent of exports in different Asean countries, are often family-owned and locally oriented. In addition, these companies provide 50 to 95 per cent of employment in the region. 

Asean has acknowledged this and introduced an action plan to protect SMEs and prepare them for the coming economic integration.

Fuchs cited the important role of SMEs in Germany’s resurgence despite the European debt crisis. But he said not every measure that helped push the SME sector to success in Germany will help Asean countries as well. “It is a question about the legal preconditions and economic prepositions,” he said.

Speakers at the conference stressed that education and innovational minds are key to successful SMEs. “I am keen at looking at the second and third generation as they are more educated and more open to innovation than the first generation,”, said Terence Gomez from the University of Malaya.

Experts said quality of education in the region is low but it is manageable, citing South Korea as an example on how governments can help provide training to skilled workers. Seoul provides an all-compassing counseling program that includes training on management skills, brand development and negotiations with overseas traders.

South Korean SMEs employ 10 billion compared with large firms’ 1.5 billion.

Some of the measures that Korea had taken to address shortage in skilled labor include recruiting talented youngsters, freeing them from military service and providing technical training.

Korea’s success stories like the coffee brand CoffeBene, which also operates in the US, Denso and Aisin Seiki, which sells auto-parts globally through Toyota, are proof of the country’s success in supporting small enterprises.

Another important factor to the success of the SME sector is access to finance. Fuchs advised to minimize bureaucracy.

Hang Thi Thu Nguyen from the Vietnam Academy agreed. “We don’t need more access to finance, we need to simplify it,” she said. “SMEs need to be informed what is accessible for them and how they can apply for help from the government.”


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