Micro, small and medium enterprises (MSMEs) in ASEAN greatly contribute to livelihoods, communities and economies in the region because they account for up to 99% of business establishments in key sectors, contribute to more than 50% of ASEAN’s GDP and employ more than 80% of the workforce[1]. Today, the ASEAN Coordinating Committee on Micro, Small and Medium Enterprises (ACCMSME) commemorates MSME Day 2019[2] to recognise the importance of MSMEs in promoting innovation, creativity and decent work. The celebration also aims to encourage the formalisation, participation and growth of MSMEs in international, regional and national markets, including through access for all to capacity building.

ASEAN is dedicated to preparing ASEAN MSMEs to build immunities from disruptive technologies and embrace the opportunities to advance towards a Digital ASEAN through collaborative interventions. It highlights the potential of businesses in Southeast Asia as key drivers of ASEAN economy by capitalising on innovation and technology. This is in line with the 2019 ASEAN Chairmanship theme – Advancing Partnership through Sustainability, and with one of the three key strategic drivers “Equipping ASEAN in Preparation for the Fourth Industrial Revolution.”

ASEAN countries are at varying degrees of readiness in preparing for the digital economy and Industry 4.0. Building the MSME ecosystem in ASEAN requires continuous reinvention to maximise its digital potential to accelerate intra-regional trade and growth, thus enabling ASEAN to compete globally more effectively as an integrated economy. Digitalised MSMEs will promote equal opportunity for vulnerable groups such as women, young entrepreneurs and poor communities. Hence, MSME Day 2019 is also a celebration of ASEAN MSMEs’ pivotal role in stimulating a resilient, inclusive, people-oriented and people-centred ASEAN, and enhanced partnership between the ACCMSME and other public sector, private sector as well as civil society organisations.

While MSMEs see digital integration as an opportunity to grow, they also face many barriers to adopt technology. Barriers identified include limited access to internet and affordable digital tools, limited cross-border payment options, complex cross-border trade processes, shortage of digital skills, and difficulties in navigating digital regulations and starting a business.

ACCMSME works with a number of partners to address these challenges and realise the vision of globally competitive and innovative MSMEs under the Strategic Action Plan for SME Development 2016-2025. Representatives from policy makers, academicians, enterprises, and civil society partake in the various events and initiatives that ACCMSME and its partners have lined up throughout this year.

Born Global Enterprises

While data are scarce on micro enterprises in ASEAN, anecdotal evidence suggests that they make up a large percentage of the businesses in ASEAN and play an important role in providing jobs and social stability across the region. In the digital era, where the size of an enterprise is not the main determinant of success, micro enterprises can rise to seize the opportunities similar to the small and medium enterprises, if not higher.

In support of Thailand’s ASEAN Chairmanship 2019, the Office of SMEs Promotion Thailand organised the Global Digitalisation Model for Micro Enterprises workshop on 27-28 May 2019. It also held the Policy Dialogue on Starting a Business in ASEAN: Formalisation of Micro Enterprises and How Digitalisation Can Support It on 25 June 2019 which was organised with the support of Canada under the Canada-OECD Project for ASEAN SMEs.

Both activities supported the creation and growth of micro enterprises by leveraging digital technology, highlighting the critical roles of various stakeholders in the journey. It starts from facilitating easy business registration process, developing innovative products to penetrating the global market. By helping micro enterprises improve their operational efficiency, develop targeted products and services, and inculcate entrepreneur mindset as well as self-confidence, it is hoped that they can adapt and upscale their businesses with the digital economy.

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In her opening remarks to the Policy Dialogue on Formalisation of Micro Enterprises, Ms. Destry Anna Sari, the current Chair of the ACCMSME stressed the importance of providing a conducive ecosystem for the micro enterprises to thrive in. She said, “Technological advancements have made it possible for the micro enterprises to have the same opportunities in reaching out to the international market as the medium enterprises.  Given the right ecosystem, support, policies and regulatory environment, the micro enterprises could have the same opportunities as the small and medium enterprises.“

Enhancing Entrepreneurial and Digital Skills

Recognising that private sector, operating on the ground in the respective markets, possesses the best technical expertise in developing and utilising digital technology, ACCMSME welcomes collaboration with partners from business and industry, such as the ASEAN Business Advisory Council or US-ASEAN Business Council, and individual companies to provide quality capacity building for ASEAN MSMEs. The ASEAN SME Academy and the ASEAN Mentorship for Entrepreneurs Network cater to MSMEs’ needs of knowledge, skills and guidance to navigate business ecosystem. The Academy’s modules are available online, enabling users to learn at their own pace and distance learning for entrepreneurs in countryside with limited access to information. In keeping with the spirit of continuous learning and keeping abreast of the latest business trends, ACCMSME calls for contribution from, and partnership with, the private sector to facilitate continuous learning and expand the benefits to all.

Supporting MSMEs in Breaking into the International Market

An event promoting business matching among start-ups, investors, and prospective buyers is taking place in Singapore on 27-28 June 2019. Organised by the ASEAN Business Incubator Network in conjunction with the Innovfest Unbound 2019, the two-day event aims to promote exchange of innovation and technology and provide platform for business networking among ASEAN MSMEs. A total of 32 startups were selected to participate; seven of them are led by women. Having been nurtured and nominated by technology business incubators in their respective country, they are hopeful to pitch their business ideas to potential investors from ASEAN and Japan and to secure funding for future development.

Recognition of Successful Digitalised MSMEs and Way Forward

With a view to raising awareness and sharing information on how adoption of digital technology could enable MSMEs, the book Future of ASEAN: 50 Success Stories of Digitalisation of ASEAN MSMEs was published in 2018 in collaboration with the AEM-METI Economic and Industrial Cooperation Committee. It profiles 50 inspiring stories of MSMEs in the ASEAN region that have leveraged digital technology in starting, sustaining and growing their businesses from sectors such as agriculture and fisheries to beauty and fashion, information technology, manufacturing and services.  It is hoped that with this recognition, they will serve as role models to raise awareness and trigger more virtuous circles of collaborations to realise the strong potential of ASEAN in the digital economy, towards a Digital ASEAN.

[1] Bain “Advancing Towards ASEAN Digital Integration”, 2018

[2] United Nations General Assembly Resolution A/RES/71/279, 11 April 2017