APEC Symposium on Industrial Clustering for SMEs

Deputy Minister Steve Chen,
Distinguished delegates,
Ladies and gentlemen,

Let me begin by expressing my heartfelt appreciation to Mr. John Chen, the APEC Senior Official of Chinese Taipei, who kindly invited me to this important event. It is indeed my privilege to speak on behalf of the APEC Secretariat at the APEC Symposium on Industrial Clustering for SMEs and Micro-enterprises.

I would also like to thank Chinese Taipei for its active role in developing a sound environment for SMEs and micro-enterprises in the APEC region. In the last two years, Chinese Taipei has organized two APEC Incubator Forums, an APEC Symposium on Best Practices for Financing Chains and a survey on industrial clustering.

SMEs are crucial to the economic growth and development particularly in the Asia-Pacific. It is not surprising that SMEs and Micro-enterprises represent more than 95% of all enterprises, produce around 50% of the GDP, and contribute an estimated 30% to exports in the APEC region.

In 2004, the SME Ministers gathered in Santiago, Chile, recognized that SMEs are key generators of innovation, wealth and employment among APEC economies. Ministers stated that the future of dynamic knowledge-based SMEs is core to the future of APEC. At the Santiago meeting, Ministers adopted the "Santiago Agenda on Entrepreneurship", which recognized two significant factors that allow SMEs to flourish.

The first of these is the development of an enabling business environment that encourages the formation and growth of enterprises. Ministers described such an environment as being characterized by stable macro and microeconomic policies that are business-friendly and legal and good governance systems. Ministers called for this environment to maintain a regulatory framework that facilitates sustainable business growth, and a culture that supports and rewards entrepreneurial endeavors.

The second factor recognized by the Santiago Agenda was that governments should assist in realizing the potential of the SMEs in their economies. The Agenda calls for governments to provide support for SME growth and remove barriers that impede their growth.

Ladies and gentlemen,

The success of the SME Ministers Meeting in Chile last year gave us a strong foundation to build on this year. Outcomes from the meetings of the Micro-enterprise Sub Group and the SME Working Group here in Chinese Taipei will contribute to ensuring the success of the current APEC year hosted by Korea. With the SME Ministers Meeting scheduled for August in Daegu, Korea, and the Leaders Meeting set for November in Busan, a series of APEC events of the year are certainly under way.

Today I would like to fill you in on some of the latest APEC developments that are also making a contribution to the success of the 2005 APEC Year.

The APEC process is unique in many ways. Since its inception in 1989, APEC has grown to become one of the world's most important regional groupings to promote trade and investment as well as building the regional community. Our membership of 21 Member Economies are home to around 2.6 billion people who in turn account for around 50 per cent of the world's GDP and more than 47 per cent of global trade.

APEC has traditionally focused on facilitating trade, investment and sustainable growth in the Asia-Pacific region. In working together to reach our goals, interaction in the APEC process is based on mutual respect, cooperation and consensus building. Changes in global economy and the new pressures being brought upon the region have seen the APEC agenda expanded in recent years. APEC action to deal with the ongoing threat posed by terrorism, cross-border health issues such as SARS and avian influenza, and natural disasters have reinforced the link between economic health and human security.

The APEC process is constantly evolving and each year progresses the achievements of the previous years. Last year, working to the theme of "One Community, Our Future," APEC Leaders and Ministers dealt with a number of issues which had significant regional and global repercussions. These issues included providing political leadership to progress the Doha Development Agenda of WTO negotiations and efforts to clarify the role of free trade agreements and regional trade agreements (FTAs/RTAs) in the APEC process. APEC Leaders and Ministers also sought to establish guidelines on the control of shoulder launched surface to air missiles (MANPADs) and collaborate on the implementation of the International Maritime Organization's International Ship and Port Facility Security, or ISPS, Code.

Progressing the APEC agenda into 2005, Korea has adopted the theme of "Towards One Community: Meet the Challenge and Make the Change." This is a bold statement on readiness in the APEC Region to tackle the challenges we face and take corrective measures if necessary. Korea believes that this theme clearly presents the strenuous will of APEC Member Economies to realize APEC's core goals in the area of trade and investment liberalization and capacity building.

In guiding the APEC process through 2005, Korea has identified seven priority areas. I will highlight some of these.

In the coming year, APEC will continue to work for the advancement of WTO DDA negotiations by contributing to the successful preparation of MC-6 slated for December this year in Hong Kong. This year, APEC will place a great deal of energy in strengthening anti-corruption efforts by establishing an Anti-Corruption Task Force. APEC is also turning its attention to taking stock of APEC's progress made thus far and its future direction by undertaking a midterm stock-take and developing a new roadmap for APEC's future activities.

The issue of human security is also expected to remain a top priority for 2005. Together with efforts to strengthen APEC counter-terrorism activities, energy security, health issues and natural disasters will also be key elements of the human security agenda. At SOM I, Senior Officials agreed to establish the Virtual Task Force for Emergency Preparedness. The new task force will seek to unify resources and skills in the APEC community to deal with future emergencies and natural disasters.

In 2005, APEC is also expected to take additional steps to foster innovation in science and technology by increasing knowledge about protecting intellectual property rights and enhancing digital opportunity.

Coming back to our area of work at this meeting, APEC 2005 will pursue its ongoing agenda in support of SMEs and Micro Enterprises. This will have special emphasis on nurturing businesses that have developed innovative and creative technologies.

The 2005 SME Ministerial Theme of "Promoting Innovation of SMEs" is quite timely during this current APEC Year when the call is being made for the region to "meet the challenge and make the change". This SME Ministerial theme recognizes that innovation is a practical response to the fast-changing international business environment and that SMEs must meet the challenge of innovation and evolve with this change.

Human resource development, technology and capital are the three key factors for encouraging innovation for SMEs. However SMEs cannot expect to meet the challenges of new technologies and opportunities on their own. Strengthening linkages between SMEs and the research community as well as with businesses in other industries and other economies is essential. Networking and clustering within and across borders builds synergies between numerous stakeholders in the regional economy and delivers tangible benefits to SMEs that is active in this process.

Today the APEC Symposium on Industrial Clustering for SMEs will advance prospects for fostering industrial clusters in APEC economies. This symposium will also seek to determine the best way to strengthen the regional trade and investment environment for building regional industrial clusters. In all of these efforts, it is also heartening to know that the unique needs and characteristics of SMEs and micro-enterprises are also being taken into consideration.

I am confident that the outcomes of this symposium, along with the SME Working Group and the Micro-Enterprises Sub Group Meetings will lay firm groundwork for the upcoming SME Ministerial Meeting in Korea and deliver substantial benefits for SME's around the APEC region.

Thank You.