ABAC pushes for MSME inclusion in global trade and investments
Recognizing the increasing value of MSMEs, the APEC Business Advisory Council prioritizes MSME access to international markets and their participation in the global value chain.
“The benefits of free and open trade and investments need to trickle down to micro-, small- and medium-enterprises (MSMEs) to ensure that the objectives of job creation, wealth generation with equity, and wider access to the opportunities of global trade are realized,” said Doris Magsaysay-Ho, 2015 Chair of the APEC Business Advisory Council.
ABAC priorities this year include embracing e-commerce to accelerate MSMEs’ access to international markets; promoting innovation and MSME participation in the global value chain; and promoting and ensuring MSME access to finance and affordable credit.
The Asia Pacific region is projected to capture 33.4% share of global e-commerce sales by end 2015 according to research by eMarketer. “These upward regional and global e-commerce trends present great opportunities for MSMEs to expand their market base, widen their business networks, and increase their sales towards sustained growth,” Magsaysay Ho added.
“We need to leverage on the growing internet usage, burgeoning middle class, and the increasing accessibility and affordability of technology to enable our micro-, small-, and medium enterprises to enter the global market. e-Commerce has evolved into a regular marketplace option for many buyers,” Magsaysay Ho explained.
A study conducted by ABAC with the USC Marshall School this year cited that the single most critical limiting factor was the lack of readiness and capability of MSMEs to engage in e-Commerce. Problems of awareness, technical ability, access to talent and financing all limit the potential of MSMEs, especially in developing economies.
“For cross-border e-Commerce to grow, e-payment solutions must expand beyond traditional banking solutions. Governments must allow for new, innovative e-payments solutions and avoid the vested interests of incumbents,” Magsaysay Ho added.
The internationalization of MSMEs also requires a solid vision for innovation that will allow our MSMEs to penetrate global markets and global value chains. “We need an ecosystem that supports enterprise creation and increases innovation capabilities of MSMEs,” Magsaysay Ho added.
MSMEs account for over 97 percent of all enterprises and employ over half of the workforce across APEC economies. MSMEs contribute significantly to economic growth, with SMEs’ share of GDP ranging from 20 percent to 50 percent in the majority of APEC economies; however, they account for only 35 percent or less of the direct exports.
The Nanjing Declaration on promoting SME Innovative Development was adopted in 2014 which urged the APEC members to take a range of measures to promote SME innovation on a voluntary basis.
An important measure that is relevant to the innovation agenda is that of strengthening the digital infrastructure and leveraging the digital economy to accelerate MSMEs’ participation in the Global Value Chains. “It is important that we take the commitments in APEC a step further by exploiting every available opportunity to make use of new technologies that will help MSMEs scale up internationally,” the ABAC Chair added.
Continuous collaboration between the public and private sectors are vital to inclusive policy-making that will promote balanced, sustainable and innovation-driven growth.
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