In 2016, the SMEWG focuses on completing its Strategic Plan 2013 – 2016 and developing one for 2017 – 2020. It also implements the instructions stated in the 2015 SME Ministerial Meeting Statement and the “Iloilo Initiative: Growing Global MSMEs for Inclusive Development”, endorsed by the SME Ministers in 2015. The Group also plays an important role in realizing the “Boracay Action Agenda to Globalize MSMEs”, which was adopted by the APEC Economic Leaders at the Meeting in Manila in 2015.
1. Entrepreneurship, innovation and the internet and digital economy
Digital and Internet Economy
SMEWG members are implementing the Digital Economy Action Plan and Work Agenda (DEAP) with specific projects and activities, which was proposed by the United States and actively co-sponsored by many economies,. The Workshop on Enhancing MSMEs’ Access to the Internet Economy provided a great platform for exchanging information on challenges for MSMEs, highlight best practices for supporting MSME access, and increasing awareness of private sector efforts to integrate MSMEs into global and regional markets.
Another project funded by APEC is the “New Era of Growth for APEC SMEs through Online-to-Offline (O2O) Business Models” which includes four activities: a) SME O2O Forum 1 (Ho Chi Minh City, April 016), b) APEC SME O2O Training Workshop (Taipei City, June 2016), c) APEC O2O Summit 2016 (Taipei City, 12 – 14 Jul), and d) APEC SME O2O Forum II (Lima, 6 September). In cooperation with top e-commerce platforms such as eBay, Amazon and Alibaba, this project aims to advance and facilitate MSMEs’ access to global markets through O2O business models and best practices, and be the catalyst and facilitator paving the way for a new era of growth by making trading across borders faster, cheaper and easier for MSMEs in the APEC region.
The next-step of this O2O Initiative is the project on “Enhancing SME Digital Competitiveness and Resilience towards Quality Growth”. This capacity building project, to be implemented in 2017, will establish an APEC SME O2O Expert Network and publish a comprehensive APEC SME Digital Competitiveness and Resilience Guidebook. One Summit and two capacity building fora will be organized in Chinese Taipei, Malaysia and Viet Nam in 2017.
As supported by the APEC SME Ministers, China is taking lead in developing the APEC Best Practices in SME Innovation and organizing the bi-annual APEC SME Technology Conferences and Fairs (SMETC). Nine (9) sessions of SMETC has been organized successfully so far. This self-funded activity aims to serve as a professional platform to facilitate matchmaking, technology landing, transformation upgrades and exchange innovative ideas of cutting-edge fields for SMEs in China and across the APEC region.
The APEC Business Ethics for SMEs Initiative in strengthening ethical business practices in key sectors continues to produce successful outcomes with the 3rd APEC Business Ethics for SMEs Forum held in September 2016 in Lima, Peru. The project focuses on fostering an external business environment and internal company practices that permit SMEs to operate on a sustainable basis and serve as global suppliers. It aims to facilitate the development / alignment of codes of ethics and multi-stakeholder ethical collaborations to high standards, both within and beyond member economies where SMEs seek to conduct business. Through the rapid elaboration of multi-stakeholder ethical collaborations, formalized on an economy-by-economy basis, the project seeks to reduce the substantial resources that are lost or diverted by enterprises, especially SMEs, to unethical business practices. Till 2016 there have been 50 associations with codes or formal code commitments in biopharmaceutical sector and 24 in medical device sector against 25 and 12 respectively in 2012. The 4th APEC Business Ethics for SMEs Forum would be held in Viet Nam in 2017.
Led by Chinese Taipei, the APEC Start-up Accelerator Initiative is among projects that significantly support the development of start-ups in the APEC regions. Participating start-ups have succeeded in increasing their visibility and securing fund for their businesses. For instance, Gogolook was acquired at USD 18 million. ServTech, one of the six winning startups of the 2014 APEC Challenge, was invited to participate in the Intel Global Challenge in Silicon Valley and won the Innovator Award. In addition, the project created the Accelerator Network Directory, a useful reference for SMEs and start-ups when soft landing in new geographic markets. In 2015, the Initiative continued with focus on early-stage investment. Major activities include two Forums on “From Start-up to Scale-up”, and the APEC Accelerator Network Summit and the APEC Challenge 2015.
Proposed by Viet Nam, the APEC Public – Private Dialogue on Enhancing Capacities of MSMEs in Exporting Services will be organized in in 2017 in Viet Nam. The objectives of this project are three-folded: a) to provide a platform for open dialogue on the current state-of-play as well as opportunities and challenges of APEC services MSMEs; b) to discuss the ways to promote the capacities of exporting services of MSMEs through sound policies, technical assistances and skill development; and c) to provide an opportunity for networking among MSME experts from the public and the private sectors.
2. Financing for business expansion and capability development
The Financial Literacy Survey has been being conducted with the lead by Thailand, whose preliminary findings showed current understandings of financial literacy level and part of financial literacy education gaps. Full analysis of financial literacy education strategy, financial literacy education gaps, financial literacy policy gaps, examples of best practice and recommendations would be finalized and reported in later in 2017.
The Philippines, in close collaboration with ABAC and the Asia – Pacific Financial Forum (APFF), organized the SME Finance Forum at the margins of the SME Working Group Meeting in Iloilo City in 2015. Among the recommendations of the forum were the strengthening of public and private sector dialogue on addressing access to finance by MSMEs, developing credit information sharing systems, expanding access to finance for MSMEs in the supply chain, developing alternative funding mechanisms for MSMEs and start-ups, and developing best practices for strengthening SMEs’ resilience (e.g. micro-insurance and disaster risk finance).
Previous workshops on Financing for SMEs are:
Addressing Impediments for Small and Medium Sized Enterprises (SMEs) and Micro Enterprises (MEs) to Access Trade Finance
Identifying Government Policies that Promote Venture Capital Investment in APEC Economies
3. Inclusive business ecosystem that supports SME growth
Promoting Women Entrepreneurship and Green Business
The self-funded project “Supporting Women-led SMEs Access Global Markets by Implementing Gender-Responsive Trade Promotion Policies and Programs” by Australia is aimed at helping develop or improve Trade Promotion Organisations’ services to better support women-led SMEs access global markets. Phase one of the project in 2014/15 identified the barriers women exporters face and developed a set of best practices and lessons that can be adapted to the individual circumstances of APEC economies. In 2016 and 2017, in phase two of the project, Australia is providing assistance to targeted economies to address economy specific barriers. The first workshop to address an economy selected specific improvement was held in Lima in August 2016. Other workshops will be held in Vietnam, the Philippines and Papua New Guinea over the next twelve months. This work also furthers PPWE priorities.
In addition, SMEWG has implemented activities that promote women entrepreneurship, innovative and green businesses. Some reports are available as SMEWG Publications.
4. SMEs’ Market access and Internationalization
The green economy cannot be fully achieved without the participation of MSMEs. Greening MSMES will enhance MSMEs’ competitiveness and improve their market access, while also reducing carbon emissions. However, most MSMEs in the region are not aware of this issue as many of them still, believe that green innovation and technology incurs higher costs and requires inaccessible technical expertise. With that in mind, Thailand organized the forum Greening MSMEs: A Pathway towards Sustainable Economic Growth in the APEC Region in July 2016 in Bangkok.
Taking into account the amount of work that has been done in the past by APEC in areas of sustainability, green growth, environmental goods and services and green value chains, the SME Ministers instructed the SMEWG to lead a process to develop an “APEC Strategy for Green and Sustainable MSMEs” with a view that it be adopted in November 2017, in close coordination with all APEC relevant Committees and sub-fora.
Mainstreaming MSMEs into the Global Economy
To support this APEC-wide priority, SME Working Group has conducted a series of activities that practically helps MSMEs join the global market. These efforts provide capacity building, technical assistance and cooperation, business matching, and networking for both the SMEs themselves as well as the policy makers in the APEC region. The Philippines, with support from member economies, is working on implementing the Iloilo Initiative, with focus on the establishment of the MSME Marketplace, a virtual tool that is expected to promote MSMEs participation in the Global Value Chains (GVCs) and international trade.
The SME Working Group implements a number of projects to assist MSMEs in going international between 2016 – 2017:
An APEC Workshop on Promoting SME’s Integration into Environmental Goods and Services (EGS) Global and Regional Markets, held in July 2016, helps APEC member economies promote EGS sector, especially in facilitating SMEs’ participation in the EGS markets through identifying SMEs’ obstacles in their access to the EGS regional and global markets; exchange good practices and experiences in supporting SMEs’ integration into the EGS markets; and discussing measures to develop EGS markets for SMEs.
The APEC Workshop on Promoting SMEs’ Participation in the Food Supply Chain, held in May 2016, widely agreed that SMEs, if mobilized, harnessed and facilitated accordingly in food supply chains, would enhance remarkably their competitiveness and integration in the regional and global economics, and then significantly contributes to the economic growth and development as well as securing food security. Recommendations from the Workshop include: enhancing financial availability and access for SMEs; modernizing SMEs through enhancing their access to innovation, advanced technology, e-commerce and digital trade; encouraging mentor by big companies; establishing smart network leadership and coordination; strengthening marketing ability etc.
Some previous projects:
Supply Chain Capacity Building for SMEs: Supply Chain Management, Cold Chain Storage, and Technical Regulations
Facilitating SME Trade through Better Understanding of Non-Tariff Measures in the Asia-Pacific Region: Workshop 1 and Workshop 2.
An Integrated Plan of Action for SME Development (SPAN) was developed and endorsed by APEC SME ministers in 1998. The SPAN serves as a set of broad guidelines for SME development in individual economies. It also provides a reference point for review of both individual and collaborative initiatives, programs and regulatory frameworks.
To help SMEs embrace the culture of innovation and maximize the benefits of technology, the Daegu Initiative was launched in 2005 with the objective of improving the economic and policy environments of all member economies to make them more conducive for SME innovation. Under the first cycle (2006 - 2010), An APEC SME Innovation Centre has been established in Korea to offer consulting services to small businesses and provide opportunities for economies to share innovation policy experiences. During the Green Initiative, the second cycle of the Daegu Initiative, the APEC SME Green Innovation Conference was held in April 2011 in Seoul, Korea that brought together government officials from SME-related and energy ministries and business representatives from innovative SMEs to share ideas and forge greater cooperation.
The APEC Accelerator Network initiative was launched in 2013 to help Asia-Pacific startups gain access to venture capital funding and business mentoring. In 2014, the APEC Accelerator Network selected six startups from the region to participate in the Intel Global Challenge and the Siemens New Venture Forum in Silicon Valley USA, where they received awards and venture capital funding. See more in a recent APEC feature success story.
APEC Start-up Conferences, led by Peru, is another significant effort of APEC. Since its launch, three conferences have been held annually since 2012. The last conference “Global thinking to make Global Business” was organized in Lima, Peru in October 2014 with over 400 participants attending. Using the series of Start-up Conferences, international keynote speakers, and global corporations shared their valuable and encouraging experiences and views on entrepreneurship, required attitude and skills for entrepreneurs who wish to start a global-market-oriented business, as well as programs for start-ups and entrepreneurs. Start-ups from Indonesia, Mexico, Peru, the Philippines and Viet Nam were invited to share their initiatives in various industries, including information communications technology, manufacturing, nanotechnology, and 3D printed handicrafts.
The multi-year project on Improving Natural Disaster Resilience of APEC SMEs to Facilitate Trade and Investment, led by Chinese Taipei, has recently completed with great outcomes. The project helped SMEs better prepare for natural disasters through business continuity planning. Key deliverables of the project included the Guidebook on Promoting SMEs’ Business Continuity Planning (BCP), a 10-step model to help businesses develop their own business continuity plans. The Guidebook was translated into six languages, enabling accessibility for 40% of the world’s population. The Train-the-Trainer Workshops to promote the BCP Guidebook were customized and conducted in six APEC economies, benefiting local small and medium-sized businesses. For more information on the outcomes and benefits of the SME disaster resilience project, see recent APEC feature article.
In September 2015, the 22nd Small and Medium Enterprises Ministerial Meeting (SMEMM) was held in Iloilo, the Philippines under the theme “Mainstreaming MSMEs in the Global Economy”. At the meeting, Ministers instructed APEC officials to:
- Eliminate barriers, reduce trade-related costs and facilitate trading of MSMEs globally. Promote MSME trade regulatory education, engage MSMEs and ABAC in the development of policy and regulatory environment.
- Leverage the digital economy to expand internationalization opportunities for MSMEs. Strengthen MSMEs’ participation in local supply and global value chains through long-term, value-driven partnerships between large enterprises and MSMEs.
- Promote policy, business and regulatory environments that foster the growth potential of MSMEs, in particular globally competitive and innovation-driven MSMEs. Enhance partnerships, linkages, and networking among innovation centers, research communities, and those involving large and small businesses.
- Facilitates financial inclusion for start-ups. Urge financial institutions to look beyond financial records and consider MSMEs’ overall business plans and potential. Collaborate with public and private institutions in widening access to finance and business resilience.
- Assist MSMEs’ intellectual property (IP) awareness and protection, develop necessary measures for the effective use of IP assets by MSMEs.
- Promote MSMEs’ resilience against unexpected events, disasters, financial crises; build a secure and developed digital economy as part of Business Continuity Planning (BCPs).
- Launch the APEC MSMS Market place and provide a bigger voice to MSME in the APEC process.
- Integrate the Boracay Action Agenda (BAA), the Digital Economy Action Plan and the Iloilo Initiative in the next SMEWG Strategic Plan; put in place a monitoring system.
- Harness synergies across APEC fora to maximize the benefits of relevant work streams. Task SMEWG to exercise leadership to ensure greater complementation in efforts to address issues that threaten the survival and hinder the growth of MSMEs.
- Seek approval for permanent status for SMEWG in APEC.