Small and Medium Enterprises (SMEs) can potentially add about $1 trillion in trade and about $150 billion in annual foreign direct investments to Asia Pacific Economic Cooperation (APEC) economies if they operate in a more conducive and business-friendly environment at home, and a more frictionless and integrated market abroad.
The above statistics, published in an APEC study in 2003, were quoted by Mr Lee Yi Shyan, Singapore’s Minister of State for Trade & Industry and Manpower, during his ministerial keynote address at the APEC SME Summit 2009.
Delegates from more than 30 countries attended the summit on 11 and 12 November at the Raffles City Convention Centre in Singapore. Respected business leaders addressed an audience of business owners and media, and took part in panel discussions on the challenges faced by SMEs, strategies for SME growth and initiatives that can be taken to facilitate it.
SMEs in APEC account for approximately 90 percent of all businesses and provide jobs for around 60 percent of the workforce across the APEC countries. On the other hand, they contribute to about half of the GDP of their respective economies and account for only 30 percent of exports. Mr Lee explained, “This profile shows that APEC SMEs have an enormous potential if the right structure is put in place to empower them to grow.”
It is no secret that SMEs face great challenges. Mr Jack Ma, chairman and chief executive officer of China’s Alibaba Group, highlighted during his keynote address that, among many hurdles, SMEs often find it challenging to get credit from banks.
A few delegates surveyed by City News highlighted other issues. Mr Aung Soe Naing, project director at Apcol Pte Ltd, a company dealing with telecommunication equipment pointed out that SMEs face fierce competition as they try to expand within their own market and overseas.
Dr S Kamaraj, a soil scientist at Kiat Lee Landscape and Building Pte Ltd, which handles projects in Australia, Dubai and Taiwan, said that his company has struggled with finding manpower overseas.
The challenges are not merely without but within as well. Mr Clarence Nah, general manager and consultant at Asiawide Franchise Consultants Pte Ltd, a company that helps SMEs franchise their brands, felt that some SMEs cannot grow because of their mindset. Having built their company from scratch, many SME bosses struggle to let go as they grow bigger.
In the closing panel, Mr Teng Theng Dar, CEO of the Singapore Business Federation, pointed out that restrictive trade policies have hindered many companies from tapping into profitable supply chains, causing one of the biggest hindrances to the growth of SMEs.
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In order to help SMEs bring their businesses abroad, Mr Lee announced that Singapore has proposed two new initiatives this year, namely the Study on Export Technical Models and the APEC Business Fellowship.
The former aims to give SMEs advice on export, regulatory and technical issues. The latter is a five-day in-market executive training program to expose visiting APEC SMEs to practical business norms in each local market.
Indeed, over and above presenting delegates with opportunities to learn from leaders of successful businesses, the APEC SME Summit proved the rare chance to provide the milieu for delegates to network and forge new business relations across and beyond the APEC economies.