Small to medium-sized enterprises (SMEs) serve as the engine which propels the Association of South-East Asian Nations’ (ASEAN) economy forward. New reports indicate that early next year, there will be a forum which aims introduce ASEAN SME owners with angel investors, so they can acquire vital funding.
Driving the economy
Figures quoted by Brink Asia suggest that ASEAN is currently the world’s sixth largest economy, with a combined gross domestic product of US$2.4tr. The region has a lot of potential, with Malaysia’s Second Minister of Industry and Trade forecasting that it could become the fourth largest on earth by 2030. In order to tap into this potential, ASEAN states must make it easier for their SMEs to conduct business.
It is important to note that SMEs account for between 88.8% and 99.9% of firms in the ASEAN territories, so when these businesses thrive, they inject significant capital into the regional economy. Recognising this truth, ASEAN states are now providing more resources for SMEs, such as opening a new online academy, which will give small business owners the tools they require to expand operations over time. Funding is a big issue for ASEAN SME leaders and it looks as though this problem will now be addressed.
According to BWorld Online, a news source, the organisers of the ASEAN Elite Forum Manila Round 2017, which is due to be held next February, have made an important announcement. They are hoping to develop a platform through which SMEs, particularly those run by young entrepreneurs, can connect with angel investors, who supply capital in exchange for either ownership equity or convertible debt.
Commenting Andre Kwok Ka Ming, the Founding President of the Nanyang Entrepreneur Foundation, a non-governmental organisation for ASEAN and Chinese young entrepreneurs, said: “The forum positions to match businesses and foster investment opportunities by inviting over 200 young entrepreneurs, business leaders and investors with well established entities from over 19 countries.” These nations include Japan, China, South Korea, India, New Zealand, Timor-Leste and Bangladesh.
Future of trade
Kwok noted that organisers are looking for a large pool of young entrepreneurs, especially those involved in the fast-moving consumer goods, agriculture, manufacturing and technology sectors. Elaborating, he said: “This is the first Southeast Asia platform for investors and entrepreneurs in the real economy and this is where top young businessmen and entrepreneurs meet and invest,” developing strong ventures.
Explaining, Kwok said: “With the curation of 14 young business leaders and innovators from eight ASEAN countries, the forum will take a glimpse of the future synergy of trade and technology over a background of Regional Comprehensive Economic Partnership of the ASEAN +6 and the ‘Belt and Road’ of China.” ASEAN +6 refers to member nations, plus Japan, China, South Korea, India, Australia and New Zealand.
BWorld Online notes that the Philippines’ Department of Trade and Industry (DTI) argued that SMEs need coaching to improve product quality. Speaking recently DTI’s Assistant Secretary, Blesila A. Lantayona, said: “We need to develop SMEs with the right mind-set and business know-how so they will be able to really scale up their businesses. There should be entrepreneurial evolution in this country — in every region and province… We do not rest on our laurels because our competition is not within the country. We compete with the entire world because they can come here and bring their products here.”
Htet Tayza’s commentary
It is clear that with this platform, the organisers of the ASEAN Elite Forum Manila Round 2017 conference could give young SME owners the chance to acquire vital investor capital. With this funding, along with other tools ASEAN states are looking to provide, such as the online academy mentioned above, SME heads could tap into the region’s vast economic potential, expand their businesses to create revenue.
Yet in order to compete globally, ASEAN small businesses need to be able to utilise online technologies. It is key that ASEAN embraces connectivity going forward, so they can tap foreign markets, without maintaining a physical presence in these countries, lowering operating costs. ASEAN governments need to tackle a number of issues, such as cross border flows of information, to ensure SMEs fully benefit from the digital economy. So it is clear that ASEAN’s mission to build strong SMEs is just getting started.