BEYOND AEC 2015:

Policy Recommendations for

ASEAN SME Competitiveness

AUGUST 2014

Foreword by the Chairperson of

ASEAN SME Working Group

US-ASEAN Business Alliance for

Competitive Small and Medium Sized Enterprises
FOREWORDS

ASEAN SME Working Group

ASEAN is entering a new phase in its cooperation as members move towards building
an ASEAN Economic Community (AEC) by 2015. The single market will open up
unprecedented opportunities for businesses and citizens of ASEAN member states,
allowing goods to flow freely and seamlessly within a market that has a population of
over 600 million people. It will emerge and present itself as a stronger community on
the global stage, bringing a multitude of opportunities for ASEAN small and medium
enterprises (SMEs).

Accounting for more than 96 per cent of enterprises in ASEAN, SMEs are a significant
engine of growth in the region and must seek to remain competitive. Nonetheless,
SMEs face a variety of challenges in retaining their competitive edge, and in their quest
towards becoming world-class enterprises.

In today’s highly connected environment, ASEAN SMEs have to be equipped with the
relevant competencies and sufficient resources to stay ahead of the curve. This calls
for a multi-layered approach to capability and capacity building, technology transfer,
and supply chain linkages to support their journey. The ASEAN SME Working Group
(SMEWG) together with partners such as US-ASEAN Business Alliance for Competitive
SMEs aim to foster an ecosystem of synergistic initiatives and infrastructure to catalyze
their development.

The publication of this report is thus timely in providing fresh perspectives on the
opportunities, challenges faced, as well as possible recommendations as the ASEAN
SMEWG charts the direction of SME development post-AEC 2015.

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I am heartened by the collaboration between the ASEAN SMEWG and the US-ASEAN
Business Alliance for Competitive SMEs. This collaboration will drive ASEAN’s growth to
the next level and bring mutual benefits for businesses from the US and ASEAN to
secure a future of hope, opportunity, and prosperity!

Ted Tan
Chairperson, ASEAN SME Working Group (2014-2015)
Deputy Chief Executive, SPRING Singapore

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United States Agency for International Development (USAID)

Unlocking constraints to economic growth is one of the great challenges facing us

today in our efforts to eradicate extreme poverty, and create a more secure and
prosperous future for all. We know that entrepreneurship is one of the most powerful
ways to unlock economic potential and lift people out of poverty. It promotes
economic growth, job creation, and political stability and empowers youth and
women. In the Southeast Asia Region, working to ensure that small businesses can
start, grow and thrive in an integrated ASEAN Economic Community will be critical for
the successful creation of a single market and production base in the Region,
benefitting both the people of Asia and the United States (US).

USAID’s Regional Development Mission for Asia is pleased to work with the ASEAN
SME Working Group as it strives to create the right policy environment for inclusive
business growth. By investing in sound SME policy, ASEAN Member States are working
to ensure that no one will be left behind. We are also committed to our partnership
with the US-ASEAN Business Council through the US-ASEAN Business Alliance for
Competitive SMEs. Through training and mentoring of high-potential businesses, the
Business Alliance will empower entrepreneurs, promote job creation and provide
opportunity at all levels of society.

Dr. Michael Yates

Director
USAID Regional Development Mission for Asia

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US-ASEAN Business Council

As the US-ASEAN Business Council marks 30 years of promoting US-ASEAN economic

relations, we understand just how critical SMEs are to economic ecosystems where
innovation and entrepreneurship can thrive. SMEs are great equalizers, in that they
extend opportunity to all segments of society, including women and others without
access to traditional employment. Promoting the development of SMEs is in the
interest of all stakeholders in the region, including the U.S. business community.

In order for ASEAN to reach its full potential and fulfill the vision of the ASEAN
Economic Community, all stakeholders must collectively work to ensure that we help
ASEAN become a region which embraces entrepreneurs and creates a level playing
field for all companies, especially SMEs. This is why the Council and USAID have come
together to create the US-ASEAN Business Alliance for Competitive SMEs. This
partnership combines the efforts of major U.S. corporations and USAID to develop the
capacity and boost competitiveness of SMEs in the ASEAN region. American business
has a huge stake in the success of ASEAN.

With $190 billion in cumulative investment, U.S. companies have more invested in
ASEAN than anywhere else in Asia. A strong base of SMEs will provide the future
partners and customers of U.S. companies, and give ASEAN nations the economic
strength and resiliency they need to continue to grow. As employers, taxpayers and
partners, the American private sector in ASEAN sees the value in contributing
resources to this endeavor and stands ready to ensure that this initiative continues
well into the future, helping the ASEAN Economic Community become a reality.

SMEs are critical to ensuring Southeast Asia’s growth continues to excel at creating
jobs, opportunities and products of services for the people of ASEAN. This report offers
specific suggestions for policy reforms and investments which will enable ASEAN to
realize its considerable economic potential for its SMEs. As a proud founding partner

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of the US-ASEAN Business Alliance for Competitive SMEs, we look forward to working
with the U.S. Government and ASEAN to ensure our collective vision of a strong,
prosperous, and dynamic region becomes a reality.

Alexander C. Feldman
President & CEO
US-ASEAN Business Council

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ACKNOWLEDGEMENTS

This report has been a collaborative effort between the US-ASEAN Business Alliance for
Competitive SMEs and the ASEAN SME Working Group. We would like to thank the
staff of SPRING Singapore, the U.S. Agency for International Development, and the US-
ASEAN Business Council for their strong support of this project throughout the process.
In addition, we would also like thank the many individuals and organizations involved
for their contributions to this publication, in particular: ASEAN Secretariat, Google, HP,
MasterCard, Procter & Gamble, and UPS.

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TABLE OF CONTENTS

FOREWORDS ............................................................................................................ 1

ACKNOWLEDGEMENTS ............................................................................................. 6

TABLE OF CONTENTS ................................................................................................ 7

LIST OF FIGURES ....................................................................................................... 8

EXECUTIVE SUMMARY .............................................................................................. 9

OVERVIEW OF ASEAN SME LANDSCAPE .................................................................. 12

ASEAN SME Policy Index .......................................................................................................... 13
The Challenges ........................................................................................................................ 15
Opportunities aplenty.............................................................................................................. 19

POLICY RECOMMENDATIONS ................................................................................. 24

Recommendation 1 Supporting international market expansion, integration into global
supply chains and finding new customers .............................................................................. 25
Recommendation 2 Regulatory simplification, standardization, and mutual recognition .... 31
Recommendation 3 Sustainability of business from startup to SME development via
enhanced access to finance .................................................................................................... 33
Recommendation 4 Facilitating and incentivizing the use of technology to enable SMEs to
access markets and innovate .................................................................................................. 36

CONCLUSION .......................................................................................................... 38

ANNEX ................................................................................................................... 40

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LIST OF FIGURES

Figure 1 Relative Economic Importance of SMEs in ASEAN (in various years and percentages) 12

Figure 2 ASEAN SME Policy Index – By Country .......................................................................... 14

Figure 3 ASEAN SME Policy Index – By Group of Countries and Policy Dimension .................... 15

Figure 4 Overview of Flows of Data, Fund and Goods in an E-Commerce Transaction .............. 28

Figure 5 E-Payments Facilitate Efficiencies in B2B Business Processes ...................................... 35

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EXECUTIVE SUMMARY

ASEAN’s efforts to define a post-2015 ASEAN Economic Community (AEC) is an

opportunity to address the competitiveness of its largest economic base – the small
and medium enterprises (SMEs) sector – to achieve inclusive and sustainable economic
growth for the region. We strongly support the ASEAN Leaders’ vision of a highly
competitive economic region of equitable economic development, and a region fully
integrated into the global economy.

ASEAN and its Member States play a critical role in defining the policy and regulatory
landscape in which SMEs operate. This landscape forms the foundation of a broader
ecosystem that determines the scope and extent of benefits that will accrue to ASEAN
SMEs in a post-2015 AEC. Together with the support of and investments made by a
range of development and private sector actors, ASEAN and its Member States have a
real and time-bound opportunity to change the structural dynamics that govern
competitiveness of SMEs in the region. For the Leaders’ vision of AEC 2015 to be fully
realized and then translated into visible equitable economic development of the
region, the goal of the post-2015 policy agenda must be to significantly strengthen the
policy framework and infrastructure that enhance competitiveness for local
enterprises.

To enable the competitiveness of ASEAN SMEs, it is recommended that ASEAN

articulate a set of policy priorities that will enable the international market expansion
and readiness of SMEs; facilitate the availability and application of technology;
promote regulatory simplification, standardization and mutual recognition; and
enhance accessibility of financing. Specifically:

 Supporting international market expansion, integration into global supply

chains and finding new customers: Support modern manufacturing and
supply-chain patterns to facilitate SME participation in global supply chains,

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 including policies supporting ethical business practices and corporate
governance that will open up opportunities to work with US companies and
other multinationals. In addition, to leverage the new growth in Business-to-
Consumer (B2C) transactions, it is critical to pursue a conducive environment
for cross-border e-commerce in the Asia Pacific Region.

 Regulatory simplification, standardization, and mutual recognition: The AEC

2015 Blueprint articulates a robust vision of regional integration that is
grounded in the understanding that eliminating regulatory barriers to trade will
provide the most opportunities for ASEAN SMEs to expand through the region,
thereby realizing the potential of AEC. Today, in too many instances, SMEs with
strong products and value propositions are unable to grow their business due
to artificial constraints imposed by differential and complex regulatory
requirements between ASEAN countries. ASEAN should continue to deepen this
critical aspect of its reform agenda to ensure complete implementation of
regulatory reforms, broader standardization across sectors, and expanded
mutual recognition of standards and conformance.

 Sustainability of business from startup to SME development via enhanced

access to finance: There is a substantial unmet demand for credit among
ASEAN SMEs who cite the lack of financing as a major growth inhibitor. To
support the sustainability and growth of SMEs, we recommend that ASEAN
establish policies to promote product innovation in the financial market,
considering alternative finances and diversified financial markets, ranging from
microfinance, leasing, factoring, venture capital, equity funds, business angels,
to stock markets. Policies supporting retail financing and e-payment systems
such as debit and credit cards, mobile phone payments and online banking by
individuals also support SMEs as a means to expanding reliable and verifiable
financial transactions.

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  Facilitating and incentivizing the use of technology to enable SMEs to access
markets and innovate: Adopt policies supporting creativity, entrepreneurship,
and the flourishing of technology, including the protection of intellectual
property rights, and the free-flow of data across borders, needed by companies
from all sectors including manufacturing, agriculture, retail, and banking who
leverage technologies such as cloud computing to store and share data in an
increasingly collaborative business world.

The private sector also has an important role in SME development. It is in this spirit
that the US-ASEAN Business Alliance for Competitive SMEs (Business Alliance) was
established, with the support of the United States Agency for International
Development (USAID) and the US-ASEAN Business Council. Through the Business
Alliance, US companies have actively engaged with ASEAN SMEs throughout the region
to provide capacity building and share best practices to support global supply chain
readiness and capabilities. Since March 2014, the Business Alliance has trained over
1000 SMEs in Indonesia, Malaysia, Myanmar, the Philippines, Singapore and
Vietnam. In the lead up to 2015, the Business Alliance will continue its journey to help
ASEAN SMEs become ready for the AEC and looks forward to growing its collaborative
partnership with ASEAN Member States.

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OVERVIEW OF ASEAN SME LANDSCAPE

SMEs are numerous and sector-diverse while employing many

but SMEs could contribute much more

Within ASEAN, SMEs make up 92-99% of all commercial enterprises, employing 77-97%
of the domestic work force in Indonesia, Thailand and Vietnam, and 58-62% in other
ASEAN countries (Figure 1). It is expected by 2015, ASEAN SMEs will form a major part
of regional and global supply chains. SMEs are also an important vehicle for gender
empowerment with women-owned business constituting 38-47% of formal-sector
SMEs in East and Southeast Asia. 1

Figure 1 Relative Economic Importance of SMEs in ASEAN (in various years and percentages) 2

1
Global Partnership for Financial Inclusion and International Finance Corporation, “Strengthening
Access to Finance for Women-Owned SMEs in Developing Countries,” October 2011.
2
Economic Research Institute for ASEAN and East Asia (ERIA), “ASEAN SME Policy Index 2014,” June
2014.

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However, SMEs account for just 22-37% of gross domestic product of most ASEAN
countries. Their export share is even lower: 10-20% in Indonesia, Philippines and
Singapore, and around 30% in Thailand and Vietnam. Moreover, SMEs’ export
products are typically limited in variety and range, and are also highly resource-
intensive and labor-intensive.

SME development is a critical part of the AEC Blueprint. The core of the Blueprint’s
pillar on Equitable Development focuses on SMEs. The ASEAN SME Working Group is
implementing the AEC Blueprint for SMEs through its ASEAN Policy Blueprint for SME
Development (APBSD) 2004-2014. The Strategic Action Plan for ASEAN SME
Development (SAPASD) 2010-2015 has been devised to engage businesses on issues of
access to finance, technology development, and human resources development,
among others, in order to enhance the resiliency and competitiveness of SMEs.3

ASEAN SME Policy Index

It has been widely recognized that both government and market failures can hinder
growth prospects and put SMEs in a more disadvantageous position compared with
larger firms. The ASEAN SME Policy Index 2014, a joint research by the Economic
Research Institute of ASEAN & East Asia (ERIA) and the Organization for Economic
Cooperation & Development (OECD), was designed to measure the SME business
environment in ASEAN. The index tracks SME development among ASEAN member
states, and identifies gaps in both policy development and implementation. As stated
in the index, the results from the Policy Index (Figure 2) suggest uneven levels of
performance in the implementation of SME development policy at the national level
between the two traditional groups of ASEAN Member States:

3
ERIA, “ASEAN SME Policy Index 2014 – Toward Competitive and Innovative ASEAN SMEs,” June 2014.

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  The less developed members or the CLMV countries (Cambodia, Lao PDR,
Myanmar, and Vietnam) are below the ASEAN average

 The more advanced members or the ASEAN-6 (Brunei Darussalam, Indonesia,

Malaysia, Philippines, Singapore, and Thailand) are on average in the top of the
index score.

Figure 2 ASEAN SME Policy Index – By Country4

As seen in Figure 3 (next page), across the eight policy dimensions measured, there are
big gaps between the ASEAN average, ASEAN-6 and the CLMV countries, with the most
significant gaps and low regional standing found in five policy dimensions, namely: (5)
Technology and Technology Transfer, (4) Access to finance, (7) Promotion of
entrepreneurial education, (3) Cheaper, faster start-up and better regulations, and (2)
Access to support services.

4
ASEAN SME Policy Index 2014, 9

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Figure 3 ASEAN SME Policy Index – By Group of Countries and Policy Dimension5

The Challenges

SMEs face many challenges in ASEAN, which can be understood in three broad
categories: regulatory barriers, lack of access to financing, and access to technology.

Regulatory barriers that inhibit growth

While complying with standards, technical regulations, and conformity assessment

procedures can be costly for larger firms, it is potentially prohibitive for SMEs because
many costs are fixed, regardless of a firm’s size or revenue. The national level policy
environments conducive for SME development vary across the region.

5
ASEAN SME Policy Index 2014, 10

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Generally, SMEs have emphasized in Business Alliance activities the importance of
administrative and procedural simplification, including the establishment of a single
body for business registration, as well as adequate SME representation and voice in
government policy making and administration processes. It is also important to
provide tax exemptions and incentives, especially for research and development, to
offset in part the costs to start-ups and to upgrade of products and processes.

The Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC)
identified the following priority areas that represent challenges for SME development:

1. Laws, regulations and policies which:

 Determine the ease of entrepreneurs to formally establish a business;
 Constitute constraints on the ability of SMEs to access financial resources
and related services;
 Constitute barriers for SMEs to increase their access and utilization of
information technology products and related services

2. Trade and customs policies that impact the ability of SMEs to participate in
cross-border trade activities.6

In the ASEAN SME Policy Index 2014 report, Singapore, Malaysia, Indonesia, Thailand
and Vietnam ranked higher than the remaining ASEAN member states in terms of the
overall institutional framework. These countries have implemented multi-year SME
development strategies with allocated budgets, policy targets, and review mechanisms
for policy formulation and execution under a designated agency. Others lack proper
legal framework, institutional capacity, development strategy, and resources to
coordinate, formulate, and implement an SME development policy. Across ASEAN,

6
APEC Business Advisory Council letter to Chairman of the 2013 APEC SME Ministerial Meeting. July 18,
2013.

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SMEs in certain industries (including food manufacturing, pharmaceuticals and
customs) suffer due to a lack of harmonization in regulations.

Lack of access to finance

After achieving the hurdle of business start-up, often the next major challenge for
SMEs is securing capital for business growth. SMEs at Business Alliance events
regularly raise concerns about access to finance as a core problem that they face.
Generally, about 85% of the SMEs in both the formal and informal sectors of
developing countries suffer from credit constraints. The unmet need for credit is very
substantial. Data from the International Finance Corporation show that some US$900
billion to US$1.1 trillion of SMEs’ credit requirements are unmet in East and Southeast
Asia. Importantly, the credit shortfall has a disproportionate impact on women
entrepreneurs. The proportions of women-owned SMEs having good access to finance
average 5-6% for micro-enterprises, 12-15% for small firms, and 17-21% for medium-
sized undertakings.

According to ERIA, the gap in access to finance is exacerbated by a) the poor

functioning of the cadastre system; b) stringent collateral requirements; and c)
inadequate protection of creditor rights. Credit risk guarantee schemes and a central
bureau for credit information, which are essential to promote collateral-free finance,
are not well established and well-functioning. There is also a lack of a legal framework
and policies to promote alternative financing and diversified financial markets, ranging
from microfinance, leasing, factoring, venture capital, equity funds, business angels, to
stock markets.

Another gap in financing arises from the lack of online crowdfunding alternatives. By
some estimates, only 2.3% of new businesses receive private financing from sources
such as venture capitalists or angel investors. The remaining 97.7% need to find other
ways to raise capital, such as from family, friends and their community. Crowdfunding

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sites are an emerging solution that allows companies to bring to life their ideas for
film, art, albums and other projects. Examples of such crowdfunding sites are
Singapore’s Crowdnomic, which is a platform for entrepreneurs to gather
contributions from supporters in exchange for products and services ('Rewards') using
a 'Pay-as-you-Go' funding system. Securities laws and regulations need to allow for
new, innovative ways of raising capital and existing regulations have proven to be
complex barriers for small businesses.

Lack of access to technology

In today’s digital economy, an SME without an understanding of available technology

and innovation, and how to use it to reach customers, partners and new markets, is at
a severe disadvantage. The lack of access to modern technology and tools, especially
the Internet which is the greatest opportunity equalizer in modern business, is a severe
constraint on SMEs’ participation in e-commerce and on SME development in the less
developed countries in ASEAN. In fact, online commercial platforms have enabled
numerous SMEs and individuals worldwide to become micro-multinationals and to
engage actively in micro-supply chains. Many SMEs in the CLMV countries would like
to gain access to online marketing and electronic payments as well as the requisite
skills to utilize these tools.

According to the ERIA, the biggest gaps in policy are due to the lack of a strategic
approach to innovation policy for SMEs, poor provision of information on innovation
support services, limited access to standard certification services, lack of technology
support in universities, and little linkages between SMEs and R&D labs and incubators.
Similarly, proposed restrictions on cross border data flows, support for the
opportunities provided by the Internet for creators and protection of their intellectual
property rights (IPR) through flexible exceptions, lack of broadband infrastructure,
underdeveloped science and industrial parks, lack of competitive clusters, and
insufficient financial incentives in technology development and R&D activities are also
reasons for the gap.

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SMEs in ASEAN also need to be able to harness the full benefits of the upcoming
ASEAN Economic Community by having open access to the existing technology that
they possess. Worrying regulations around the region threaten the open web that has
provided a level playing field for many SMEs to compete. Requirements that
companies store all their consumers’ data locally will introduce large and unrealistic
costs on SMEs looking to cater to a regional or global market and force them out of
operation before they have even begun to compete.

Opportunities aplenty

The post-2015 AEC needs to define a clear strategy for involvement of the private
sector, especially SMEs, to achieve inclusive economic growth in the region.
Comprehensive and effective monitoring tools—such as the ASEAN SME Policy Index—
should also be implemented. The US-ASEAN Business Alliance for Competitive SMEs
was launched to provide private sector support, and its focus is on improving access to
the regional and international markets, access to information and information
technology, and access to finance. Government initiatives are also helping, with many
ASEAN Member States developing SME promotion programs that work to help SMEs in
financing, capability and management development, technology and innovation, and
access to markets.

Vision of AEC and opportunities contained within it

When achieved in 2015, the AEC will enable opportunities for trade and growth to all
industries and enterprises in ASEAN and beyond. Trade, investment and skilled labor
will move freely along with the freer capital movement in the AEC. Intra-ASEAN trade
was valued at US$602 billion or 24% of ASEAN total trade in 2012. It will be largely free
of tariffs under the AEC, compared to an average tariff wall of almost 13% in 1993.

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Extra-ASEAN trade was worth US$1,874.3 billion in 2012. The region concluded five
FTAs to further liberalize trade and investment relationships with Australia and New
Zealand, China, India, Japan and Republic of Korea. Negotiation between ASEAN and
its six FTA partners on a Regional Comprehensive Economic Partnership (RCEP) started
in May 2013 and is to conclude by December 2015. RCEP covers 3.6 billion people with
some US$20 trillion in production value, both the world’s largest.

Support from Development Partners

Looking forward, ASEAN is now planning for its post-2015 agenda. This will include a
new SME work program. USAID and other donors are supporting ASEAN as it develops
this plan. But more importantly, concern for SME development must infuse the entire
post-2015 agenda. USAID is working closely with ASEAN to develop programs of
support for women entrepreneurs and to expand SME finance. Regional efforts to
foster SME development in ASEAN have received considerable support from other
major donors and international organizations. Technical project support comes mainly
from the Japan-ASEAN Integration Fund (e.g., the SME Service Center project) and
Federal Ministry for Economic Cooperation and Development of Germany (e.g., the
SME regional fund project). Meanwhile, ERIA and the OECD have provided research-
based project support, with the latest project focusing on developing the ASEAN SME
Policy Index.

Women entrepreneurs must be a special focus of development in the next plan. This
will be assisted by the recent launch, with support of USAID and the US-ASEAN
Business Alliance for Competitive SMEs, of the ASEAN Women’s Entrepreneurs
Network (AWEN), an important step in increasing the focus on women’s issues in
business. The Business Alliance will continue to support AWEN as it grows and takes a
vital role at the center of discussions of economic policy.

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The US-ASEAN Business Alliance for Competitive SMEs

The US-ASEAN Business Alliance for Competitive SMEs (‘Business Alliance’) is an

example of private sector stakeholder support for SME development in ASEAN.
Launched in Washington, D.C., on March 4 2014, the Business Alliance is co-
implemented by USAID, through the ASEAN Connectivity through Trade and
Investment (ACTI) project, and the US-ASEAN Business Council, through the Council’s
ASEAN Committee. The Business Alliance is committed to helping build the capacity of
ASEAN SME entrepreneurs, particularly with respect to logistics, use of modern
Information and Communications Technology (ICT) tools, use of payment systems, and
marketing. Through a series of workshops and other events over the past five months,
the Business Alliance has provided training to over 1000 SME owners. The Business
Alliance is committed to providing this type of training and support to ASEAN SMEs
through 2017. See Annex for more details on this initiative and its initial activities.

Support from ASEAN Governments

The SME focal agency in many ASEAN countries is embedded in the Trade or Industry
Ministry. Yet, reality shows that it is well-coordinated efforts among multi-disciplinary
actors combined with political will at the top that can create a real spur for SME
development. Most of the ASEAN-6 have deployed effective SME promotion programs,
ranging from credits/matching grants for innovative start-ups, export finance, export
marketing, tax incentives, to technology consultancy/upgrading. The CLMV also have
some programs up and running, yet the magnitude of efforts is less compared to those
in the advanced group.

The AEC 2015 and trade agreements signed by ASEAN create opportunities for SMEs to
expand their activities, but stronger and more concerted efforts at both the regional
and national level are needed by ASEAN governments to enhance the competitiveness
and flexibility of ASEAN SMEs. There are also opportunities for the private sector to

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partner with ASEAN governments in public-private partnership (PPP) programs to
enhance the competitiveness of SMEs, especially in financing and skills development.

The following box describes the innovative ‘SPRING SEEDS’ program in Singapore that
successfully provides equity for local startups. Adapting this Singapore model based on
the level of their development as well as resources available, the CLMV group can not
only help promote SME development in their countries but also tap on the synergies
between MNCs and local SMEs in the global supply chain, thereby spurring economic
growth.

Best Practice Example 1

Singapore: SPRING Start-up Enterprise Development Scheme (SPRING SEEDS)
In partnership with the private sector, SPRING SEEDS provides an equity-based co-
financing option for Singapore-based start-ups with innovative products and/or
processes with intellectual content and strong growth potential across international
markets. Together with third-party investors, SPRING co-invests and nurtures
growth-oriented, innovative start-ups by matching dollar-for-dollar initial
investment up to a certain limit.7

Countries can also begin to address the gender gap in SME ownership, which can help
accelerate economic growth. The following describes Malaysia’s Get Malaysian
Business Online (GMBO) scheme where the Government has set up a US$16 million
fund for an entrepreneur development program.

7
For more details: http://www.spring.gov.sg/entrepreneurship/fs/fs/pages/spring-start-up-enterprise-
development-scheme.aspx

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 Best Practice Example 2
Malaysia: Get Malaysian Business Online (GMBO) scheme
This funding is for women between the ages of 18 and 65 who have a viable
business product, and is aimed at encouraging female entrepreneurs to bring their
businesses online. By recognizing the barriers to capital to grow technological
competence, governments can play a role in accelerating SME growth.8

Procedural simplification, incubation support and start-up mentoring are widely

considered of significant importance in fostering MSME development. Philippines has
adopted an innovative and inclusive approach in these regards.

Best Practice Example 3

Philippines: Business Resource Innovation Center for Small and Medium
Enterprises (BRICS) from the Department of Trade and Industry, Philippines.
Several Philippines’ Business Resource Innovation Centers for Small and Medium
Enterprises (BRICS) have been launched in major provincial cities in the
Philippines. Basically, BRICS is an improved or leveled-up SME Center which
provides a one-stop-shop with more proactive and user-friendly services in support
of entrepreneurial start-up, early-stage enterprises as well as existing MSMEs
themselves. BRICS’ business development and support services range from
facilitation of business registration, and the provision of market and other
information to the facilitation of product development and investment, and of
access to finance and technology transfer.9

8
For more details: http://www.getmybusinessonline.com.my/
9
For more details: http://www.dti.gov.ph/dti/index.php/msme/brics

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POLICY RECOMMENDATIONS

Expanding the SME development pillar in the post-2015 AEC agenda represents a
strategic opportunity for ASEAN to achieve its objectives of inclusive growth. Our
specific recommendations for creating the best environment for SMEs in ASEAN center
on:

 Supporting international market expansion, integration into global supply

chains and finding new customers
 Regulatory simplification, standardization, and mutual recognition
 Sustainability of business from startup to SME development via enhanced
access to finance
 Facilitating and incentivizing the use of technology to enable SMEs to access
markets and innovate

Both the ASEAN and US private sectors recognize that AEC-deepening must be at the
heart of the post-2015 regional economic integration agenda. The post-2015 agenda
will be packed with initiatives to create a regionally integrated and globally connected
ASEAN. We believe that among those initiatives there must be an SME development
pillar, which provides targeted investment and initiatives to support specific segments
of the SME sector. This would support more inclusive economic growth processes that
take into account the aspirations and concerns of economic actors of all sizes. Our
specific recommendations are outlined next.

Page 24 of 43
Recommendation 1
Supporting international market expansion, integration into
global supply chains and finding new customers

The implementation of the AEC and the FTAs with ASEAN’s plus one partners (China,
Japan, Korea, India, Australia, New Zealand) create great market expansion
opportunities. Its effort to integrate within itself and with these trading partners must
continue beyond 2015. The elimination of duties and opening of the services sector;
harmonization and mutual recognition of standards which creates the much-needed
scale for SMEs; simplification and integration of customs processes; and competition in
cross-border transportation for cost-efficient travel and shipping are a critical part of
these integration efforts.

Enhancing competitiveness requires understanding the patterns of modern trade that

has evolved rapidly in the last few years and then formulating policies that will place
ASEAN SMEs ahead of other global or regional partners, suppliers, agents, or
vendors. For example, lean manufacturing practices and lower transportation costs
have resulted in the global fragmentation of production networks. A smartphone sold
in the US or EU can be designed in California, manufactured in China, with parts of
components manufactured by suppliers in Singapore, Malaysia, Thailand, Taiwan, and
Mexico. Similarly, a running shoe purchased by a European online shopper could be
prototyped in the US, customized and designed online by the buyer, manufactured in
Vietnam, with fabric, laces, uppers, in-soles and out-soles from Sri Lanka, US,
Cambodia, and Vietnam, and packaging from Indonesia. The fragmentation of such
production networks is an opportunity for SMEs who can now sell anywhere in the
world.

Modern trade patterns have further evolved in the last couple of years with the onset
of internet-based shopping and the explosion of e-commerce. This is also an

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opportunity for SMEs who often do not have resources to establish a commercial
presence in foreign markets to reach consumers there. Here, ASEAN SME retailers
already have an advantage with the rise of the Asian consumer, as they are familiar
with the patterns and preferences of their neighbors. Those that have ventured into
foreign markets may also already have Asian networks.

The Business-to-Business (B2B) and Business-to-Consumer (B2C) trends described

present significant opportunities for ASEAN SMEs. However, these trends demand a
coordinated effort by individual ASEAN Member States and the entire region to ensure
1) the end-to-end speed, efficiency, and security of supply chains; and 2) a policy
environment enabling e-commerce taking into account the role various parts of the e-
commerce value chain play – from internet services; payment systems; cross-border
and last mile transportation, to distribution and logistics.

 Supporting B2B supply-chain practices and attaining global supply chain

readiness: Global transportation networks and efficient border clearance processes
enable the global production networks that provide opportunities to SMEs, without
which, global buyers are limited to sourcing closer to market. It does not matter
that a smart phone is manufactured in China for consumers anywhere as long as
there is a way to efficiently bring components to the manufacturing site, samples
to buyers, and the finished product to market. These efficiencies are even more
critical today to meet the demands of global buyers and ASEAN must create the
backdrop for which its SMEs can have access to global transportation networks,
and can compete on lead times, customer responsiveness, and end-to-end
visibility. Such a policy environment would entail:

o An open transportation and logistics market to facilitate efficient door-to-

door, and integrated air, cross-border land, ocean, and multimodal
connectivity. Efficient transportation not only lowers costs and enhances

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 time-in-transit but also opens up additional opportunities for SMEs to serve
international buyers looking to ‘green’ their supply chains.

o Efficient and coordinated border-clearance processes backed by electronic

pre-arrival customs processing and clearance, risk management techniques
supporting immediate release, account-based customs processing, and
post-clearance payment of duties and taxes. Such modern customs
practices as embodied in ASEAN’s vision for the ASEAN Single Window
support competitive lead times, enhancing time-to-market and impacting
revenue gains.

o The availability of technology to facilitate actionable visibility and

collaborative decision-making among global buyers and their SME suppliers.

o Compliance is of critical importance to global buyers who rely greatly on

suppliers’ compliance with strict laws and best business practices such as
the Securities Exchange Commission (SEC) Act, the Foreign Corrupt
Practices Act (FCPA) and other rules supporting ethical business practices
and governance. Strong compliance among suppliers will no doubt open
up additional opportunities to work with larger companies as partners,
agents, suppliers, and vendors.

 Supporting B2C e-commerce transactions to capture growth: Much like in the US,
e-commerce is opening up opportunities for ASEAN SMEs to reach new markets.
However, unlike the US, where Internet shopping comprises a 7% boost to retail
sales every year, B2C sales in Asia are an astounding 20-30% of total retail sales.
B2C sales in the region are expected to outpace the US at 30% growth this year to
over US$433 billion, with China, Japan, India, and Indonesia leading the way. By

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 2017, analysts are predicting e-commerce in Asia to top US$1 trillion. 10 The power
of online shopping is best illustrated by the sales generated on 11 November 2013
– China’s Singles Day – where Alibaba sales reached more than US$5.75 billion on
that day alone. The opportunities for ASEAN SMEs to tap into Asia’s growth and
reach new customers are endless. To capture the growth, ASEAN governments
must put in place the necessary policy framework to facilitate all parts of the e-
commerce value chain, and enable the flow of data, funds, and goods across
borders (see Figure 4 below).

Figure 4 Overview of Flows of Data, Fund and Goods in an E-Commerce Transaction11

 Facilitating the flow and distribution of goods across borders: Much scrutiny is
being placed on the fulfillment aspects of B2C transactions because this part of the
value chain impacts overall customer satisfaction and experience. Indeed, many

10
e-marketer, 2013
11
Copenhagen Economics, ‘E-commerce and delivery: A study of the state of play of EU parcel markets
with particular emphasis on e-commerce,’ July 2013.
(http://ec.europa.eu/internal_market/post/doc/studies/20130715_ce_e-commerce-and-delivery-final-
report_en.pdf)

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 are attributing the success of e-commerce in Asia on the ability of logistics
companies to keep up with the growth, handle increasing volumes, address
geographic spread, all while guaranteeing service quality. Here, the online shopper
is not only expecting choices, but also for his or her purchase to arrive quickly and
on time, in good condition, with a built-in mechanism for seamless returns and
refunds. Two policy aspects determine the success of logistics companies to fulfill
online transactions efficiently:

o Policies that support efficient distribution and transportation networks

internationally and domestically:

 Restrictions in distribution are impediments on the growth of e-

commerce. In a survey12 done among 2000+ European SMEs in 2013,
more than 60% of SMEs surveyed noted that they were impacted by
‘sales restrictions’; more than a quarter of those surveyed are not
confident about their future; and more than half believe that innovation
in e-commerce will decline and that consumers will not be able to find
certain products online anymore. It is critical therefore that ASEAN and
its major trading partners open up cross-border distribution channels in
order for ASEAN SMEs to access new e-commerce opportunities.

 In addition, to support last mile delivery capabilities, governments must

work to open up the transportation sector to facilitate the growth of
international and domestic transportation networks. Today, few
logistics players offer the breadth of services needed at competitive
prices across a broad global network to meet e-commerce demands. In
China for example, where ASEAN SMEs and online retailers will have
many opportunities for new customers, global and regional based

12
http://www.choice-in-ecommerce.org/news-press/press-information

Page 29 of 43
 logistics players can reach customers concentrated in Shanghai and its
top ten coastal cities, but eight out of the ten fastest growing markets
are inland tier 2 and 3 cities - less reachable without international and
domestic access. Without equivalent access and transportation
connectivity to these inland cities, such as the ability of airlines to co-
terminalize, or nationwide trucking capabilities, demand may fast
outstrip the supply of critical affordable logistics services serving these
emerging customer opportunities.

o Policies that support efficient border clearance especially those that

support immediate release of low value shipments, simplified
documentation, and returns.

 SMEs throughout the world, including the more established SMEs in

mature economies such as the EU and US often shy away from overseas
customers because it is too burdensome to deal with cross-border
transactions, as they simply do not have the resources to navigate the
complexities of trade. To help SMEs overcome the administrative
burden of trade, ASEAN must continue its efforts and encourage its
trading partners to coordinate border agencies, simplify border
procedures, and adopt meaningful risk management techniques at the
border. These will be even more critical as e-commerce volumes grow
in Asia, and customs and border clearance chokepoints start to develop,
impacting overall time-in-transit and last mile delivery.

 Beyond basic customs and border clearance efficiencies, ASEAN

governments should also adopt the following practices to facilitate and
support the growth of e-commerce:

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  Establish electronic pre-arrival processing for express shipments
and immediate release applying risk management techniques
separating low from high value shipments.

 Establish commercially viable de minimis thresholds under which

only simplified, informal import declarations are needed, and
duties and taxes are waived. Seek to match de minimis levels to
personal exemption thresholds for returning travelers. After all,
why should goods meant for the same individual consumption
be treated differently if it is ‘couriered’ rather than ‘carried’?

 Simplify importer/exporter registration and waiver of power of

attorney requirements.

 Adopt service level commitment to goods release within

specified period of time and flexible operation hours to support
customs clearance round the clock.

 Establish efficient returns processes with no duty/tax levied

during re-import.

Recommendation 2
Regulatory simplification, standardization, and mutual
recognition

 Establish a higher ASEAN SME body: Given the stake of SME development in
ASEAN and the fact that the success of the regional integration needs to have
vibrant and competitive SMEs to fully benefit from a deeper regional integration

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 and narrow development gaps, we support the recommendation in the ASEAN
SME Policy Index 2014 report that a higher ASEAN SME body should be established,
elevating the ASEAN SME Advisory Board to an ASEAN SME Ministers Meeting level
which reports to the AEC Council in coordinating regional efforts and mobilizing
resources for SME development. These efforts will involve the integration of other
regional initiatives (trade, investment, banking, and finance) in harmony with the
SME development agenda.

 Develop greater stakeholder participation, including the private sector, in the

development of regional SME policies: In the current inter-connected world where
goods are often produced through linkages between many companies, it is
important for SMEs to be able to take advantage of such linkages. Developing
policies to support such linkages requires input from larger companies, on the
types of support and training that can be most effective. We urge ASEAN to
continue to embrace such linkages and we offer to be an active partner with
ASEAN in this area. We would propose an annual symposium to both examine
policy options for SME development as well as the success of past policy actions.

• Launch regional and national legal, institutional and regulatory reform initiatives
to reduce both online and offline barriers and create a favorable environment for
SME exports: The development of trade relations between SMEs in ASEAN as the
lifeblood of the AEC is a driving force towards a common goal of integration and
development of the economic potential of ASEAN. A seamless and coherent trading
infrastructure, supported by the ASEAN Single Window, holds tremendous
potential for SMEs. Undertaking regulatory harmonization efforts will also help to
create a more integrated ASEAN SME ecosystem, in particular initiatives that
support:

o Alignment with internationally harmonized standards for goods and

services as the basis for regulatory requirements. This will help to reduce

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 the number of country-specific requirements, which can otherwise create
barriers or increase the costs of doing business for SMEs.

o Harmonization of regulatory requirements across countries to promote

greater efficiency, supporting the development of intra-regional supply
chains.

o Improvements to the quality and transparency of standards development

and assessment, resulting in a reduction in the cost and complexity of
conformity assessment procedures.

 Assist SMEs in internationalizing operations so they can ‘go global’: We believe

that even the smallest of businesses can go global. Governments can therefore play
a critical “triggering” role by enacting policies to boost SMEs' knowledge of
overseas markets and their commitment to expanding abroad. This can be done by
providing information services and raising awareness about the benefits of
internationalization. Once enterprises have branched out beyond national
boundaries, the process is likely to gain momentum on its own. It then becomes
more important for the government to play the role of facilitator, for instance, by
helping reduce entry barriers, lowering the cost of international expansion and
ensuring access to the best inputs from a range of suppliers at global prices.

Recommendation 3
Sustainability of business from startup to SME development via
enhanced access to finance

 Retail lending infrastructure: Policies that develop national lending infrastructures

(credit information sharing systems and laws governing security interests) to

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 improve environments for SMEs to gain greater access trade finance, reduce the
cost of finance and encourage lending/extension of credit to SMEs.

 Wholesale lending infrastructure: Regulatory reforms and public private

partnership initiatives which incentivize angel and venture capital financing. In
addition, public and private partnership investments in a regional “fund of funds”
for supporting the growth of an ASEAN venture capital ecosystem.

 Asset based lending: Assist in capacity building for asset based lending (ABL) as a
liquidity channel for SMEs, including best practices on clear legal rules for secured
lending and factoring, transparent lien registries, broad definitions of eligible
collateral, and enforcement of creditor rights. Concurrently, regional governments
should develop and assist capacity building for modern, cross-border credit
information systems to encourage prudent and competitive access to credit for
consumers and SMEs, level informational playing fields, improved underwriting and
market access. Unimpeded data flows are crucial to this process.

 E-Payment systems in general: Support the ongoing growth of e-payments

systems such as debit and credit cards, mobile phone payments and online banking
by individuals, SMEs and government entities as a means to expanding reliable and
verifiable financial transactions. The use of electronic payments can increase
efficiencies in individual ASEAN countries and in cross border transactions thereby
promoting integration. Such payments speed up processing, reduce costs and
enhance transparency and accountability.

In addition, e-Payments can facilitate efficiencies in B2B business processes. The

bulk of cost in the procure-to-pay process is non-payment related (Figure 5 below).
Better receivables management by converting complex manual processes to simple
digital processes brings significant benefits to SMEs by reducing financial and
processing costs from 3-7% to less than 2% of Cost of Goods Sold (COGS).

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 Electronic payments can drive supply chain efficiencies – working capital
efficiencies; payment process efficiencies; business efficiencies; and global
settlement efficiencies.

Figure 5 E-Payments Facilitate Efficiencies in B2B Business Processes13

 E-Payment systems in e-Government: Governments can lead the way.

E-government tools improve efficiency, address challenges such as fragmentation
across government agencies, centralize processes in shared service centers and
optimize cash flows. The importance of financial inclusion rests on its potential
value for the millions of individuals, households and microenterprises in ASEAN
that are now either fully or partially excluded. A simple first step, such as opening
a bank or e-money account for receiving salary or social benefits, can begin a

13
RPMG Research Corporation, ‘2010 Purchasing Card Benchmark Survey Results,’ 2010.
(http://www.rpmgresearch.net/product-view.php?product_id=32)

Page 35 of 43
 transformation that will ultimately enable them to manage their day-to-day life
more productively, shield them against risks, and support them in achieving major
life goals like education, home and business growth.
 Launch national start-up programs across the region to inject funds into
promising ASEAN-based startups: While Silicon Valley startups have long enjoyed
the benefits of the region’s history of entrepreneurial mentorship, with a number
of seed programs and incubators focused on helping to the next big idea, ASEAN
startups have historically had to go it alone. ASEAN could launch national start-up
programs across the region to inject funds into promising ASEAN-based startups
and provide guidance over a set period by world-class mentors and venture
capitalists. This can demonstrate an ASEAN ‘spirit’ to innovation. AMS could adopt
relevant elements of the APEC Start-up Accelerator Initiative – a public-private
sector collaboration and a platform that strengthens access to finance, investments
and international markets.

Recommendation 4
Facilitating and incentivizing the use of technology to enable
SMEs to access markets and innovate

 Developing national policies that reduce barriers and costs for SMEs to utilize
electronic commerce based platforms to participate in cross-border trade: As a
cost-free delivery channel, e-commerce has reduced the barriers to global trade.
Many products and services can be sent effectively in the form of data. Electronic
commerce platforms can facilitate cross-border business growth and should be
promoted through reduction of administrative barriers.

 Expand trade in digital goods, services and infrastructure: The evolution and
growth of the digital economy underscores a critical principle of the global trading

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 system: the importance of keeping all modes of international trade open. Despite
progress in past agreements, significant impediments remain to trade and
investment in areas critical to the digital economy. We recommend ASEAN
countries actively support the expansion of the Information Technology Agreement
(ITA) in the World Trade Organization (WTO).

 Developing national policies and a regional framework to enable data and

information to flow across borders: Digital information, products and services, and
the infrastructure that supports them, are the backbone of the modern global
economy. Enterprises and individuals engage in digital trade in a variety of ways,
including by conducting e-commerce, providing and accessing digital products,
services and information, transferring data to run their global operations and
utilizing ICT infrastructure. These activities enable organizations and
entrepreneurs to innovate, create new products and services, enhance
productivity, enable cost-savings, improve efficiency, protect consumers, facilitate
trade, and create jobs.

A vibrant and unrestricted Internet is a key driver for international trade and
domestic economic growth, and critical for in-country businesses and consumers to
participate in the global information economy. The principle of openness is the
best guarantor of national interest and economic growth. The Internet is a 21st
century trading route, and so when it is impeded, the commerce that passes
through it is impeded too. To realize the economic benefits of the Internet,
countries are increasingly seeing the value in crafting trade policies that support
innovation and competition, and avoid regulatory barriers that slow the adoption
of modern technologies. Therefore, policymakers should consider the following:

o Governments that actively encourage and protect cross-border data flows

will benefit from increased investment and economic growth.

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 o Data or server localization requirements have an impact on efficiencies,
free flow of services and the ability of in-country businesses to grow.
o Economic growth in the Internet sector and beyond requires clear and
balanced intellectual property rules and enforcement.

CONCLUSION
This report has sought to contribute to the overall vision of a post-2015 ASEAN
Economic Community. The report focuses on the development of SMEs, which serve as
both the backbone as well as the growth engine of the ASEAN economy. We were able
to identify areas where opportunity abounds, but also areas where there are
challenges, especially with respect to regulatory barriers as well as access to
technology and financing. In line with these observations, the report includes
recommendations on:

 Supporting international market expansion, integration into global supply

chains and finding new customers
 Regulatory simplification, standardization, and mutual recognition
 Sustainability of business from startup to SME development via enhanced
access to finance
 Facilitating and incentivizing the use of technology to enable SMEs to access
markets and innovate

It is a joint responsibility of the political and business leadership in ASEAN to create the
environment for every SME in ASEAN to grow to its full potential. We believe that
doing so will lead to broad-based improvements in not just economic growth, but also
to improvements in health and education, and alleviating overall poverty.

The report also recognizes, however, that identifying current problem areas and
issuing policy corrections is not enough. We must seek to actively engage in the

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formation of the AEC through ongoing initiatives such as US-ASEAN Business Alliance
for Competitive SMEs and robust dialogue between all stakeholders. We look forward
to deepening our partnership and working together to continue to develop a vision for
a harmonious and inclusive ASEAN business environment.

Page 39 of 43
ANNEX

The US-ASEAN Business Alliance for Competitive SMEs comprises US corporations

offering their expertise and/or financial support for the Business Alliance include:
ASEAN Committee leaders – P&G, UPS, HP as well as Baker & McKenzie, Cisco, eBay
Inc., FedEx, Google, Hills Companies, IBM, MasterCard, Microsoft, Motorola, PayPal,
Qualcomm, Seagate, UL, and VISA. Several other US corporates are expected to join
the partnership later on or to incorporate Business Alliance activities as part of their
own social outreach activities.

The Business Alliance focus areas are:

 Access to the regional and international markets;

 Access to information and information technology;
 Access to finance.

These focus areas are based on the availability of resources and expertise, the ASEAN
SME Action Plan and findings from an SME needs assessment undertaken by USAID.
The three focal areas have been endorsed by the ASEAN SMEWG.

The implementation of Business Alliance activities have endowed regional

entrepreneurs with better understanding of the tools of modern commerce and
greater competitiveness locally and within the ASEAN Economic Community. They also
better understand the operational requirements of on-shore and off-shore value
chains, especially as regards commercial, logistic, technology and legal aspects and
dimensions, and so are better prepared and able to become suppliers to larger
corporations.

Indeed, from their post-training survey responses, some 89% of these regional SME
entrepreneurs plan to expand their business within the next 3 years. The major

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business activities are trading (29% of the participating entrepreneurs), manufacturing
(26%) and services (25%).

Current and future Business Alliance activities

Access to regional and international markets.

2014:
 Basic-level training on supply-chain readiness in Ho Chi Minh City, Jakarta, and
Kuala Lumpur and Manila, involving some 712 SME participants (with 371
women). (April-July 2014). The next training workshop will be held in Myanmar
in August.
 Business-leadership college for high-potential SME talents convened in
Singapore with 50 participants (including 10 women). (June 2014)
 A series of ASEAN Insights Seminars to provide SMEs and their enablers with
the most up-to-date information on major global and regional development
trends, and their impact and implications on SME development (first meeting in
Myanmar, November 2014)

2015:
 Three advanced level training workshops on supply chain readiness are planned
across ASEAN. Participants include selected SMEs which had benefitted from
the basic-level training plus high-performance SMEs in specific sectors suitable
for supply-chain linkage.
 Two planned supply-chain networking visits under the ASEAN-helps-ASEAN
approach, plus one business leadership college for high-potential SME talents.

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Access to information and information technology.

A major initiative of the Business Alliance is to launch and establish the “ASEAN Online
SME Academy” as a separate, dedicated and open access gateway. The Academy will:
provide useful business information and training resources for start-up, development
and internationalization, allow for the better provision of business development
services (BDSs) by SME enablers, and serve as a platform for networking with regional
and global communities of entrepreneurs, advisors and mentors, policy makers, and
donors. Beyond this, work is being done to support ICT skill development among SME
entrepreneurs in the region.

2014:
 “Train the Trainers” – Indonesia - 18 future trainers (with 5 women) and 77
entrepreneurs (with 37 women) received such ICT training in Indonesia (March-
June 2014).
 The SMEWG and the Business Alliance will meet further plans for the “ASEAN
Online SME Academy” in the last quarter of 2014. This will include discussions
of configurations of the platform architecture, the content, gate-keeping and
hosting, and other related issues

2015:
 Additional “train the trainer” opportunities in other countries in ASEAN
 Additional ASEAN Insights Seminars
 Launch the “ASEAN Online SME Academy”

Access to finance.

2014:
ACTI and the Business Alliance will provide the following support services in the
regional conference on “SME Access to Finance: Moving Forward in Support of Women
Entrepreneurs in the Less Developed ASEAN Countries”, planned for Ha Noi, Vietnam,

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during 24-25 September 2014. This meeting considers, among other things, funding
and capacity-building proposals from financial institutions plus the agenda to move
forward in financing SME development, with a focus on women entrepreneurs.
Participants include SMEs, SME Agencies and enablers, financial institutions, donors
and social investors.

 Work with stakeholders to identify and provide selectively the information,

training and skills or tools. These are needed by (a) financial institutions for
more efficient intermediation and operations on the (institutional) supply side;
and (b) the borrowing entrepreneurs and SMEs for improved financial literary,
financial management and planning, and financial track record on the (loan)
demand side. Women entrepreneurs will be the main target beneficiaries in
these exercises.
 Provide a platform to bring new, additional and/or alternative funding
programs and products, with women as the main target beneficiaries, to the
attention of external donors and social investors. As needed, collaboration will
be pursued with the donors and investors concerned in the follow-on
development of the selected proposals to the pilot testing and fundable or
implementation stages, or of cross-border replication of similar matchmaking
activities on a sub-regional or regional basis.

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