Fauziah Dato Talib
Lead Co-Chair ABAC SMME & Entrepreneurship Working Group
The APEC Business Advisory Council (ABAC) was created in late 1995 to provide advice to APEC economic leaders on ways to achieve the Bogor Goals of free and open trade and investment in the Asia-Pacific region for industrialized and developing economies by 2010 and 2020, respectively. The aim was also to achieve other specific business sector priorities, and most importantly, to provide business perspectives on specific areas of cooperation.
This was a turning point for businesses around the APEC region, as the Council gave industry leaders across the 21 APEC economies the opportunity to voice their concerns and address challenges they encounter in creating, developing and expanding sustainable businesses in their own economy as well as across the region. The Council offered a platform for constructive discussions as well as share best practices among member economies.
Now as you all know, discussions with relevant stakeholders are absolutely cri t ical when they translated into meaningful policies that the leaders could adopt and implement within their respective economies. Most importantly, a dialogue between the public and private sectors is necessary, which is interactive and focused on current issues impacting both developed and developing economies across the APEC region; this kind of dialog transforms policy into practice for businesses.
For this purpose, ABAC submits an annual report to leaders highlighting recommendations to improve the business and investment environment in the Asia Pacific, and outlining business views about priority regional issues.
Another point that you may already be aware is that ABAC is also the only non-governmental organization that is on the official agenda of the APEC Economic Leaders Meeting. This provides ABAC with the ability not only to push recommendations forward but also to generate dialogue directly with the leaders.
Last year during the APEC SME Ministerial Meeting, Ministers recognized that continuing to support the development of SMEs was an important component of APEC¡¯s new growth strategy. Enhancing SMEs is crucial for APEC, given that they account for roughly 90% of all businesses in the Asia-Pacific region and employ as much as 60% of its work force.
The past six months have witnessed a period of consolidation and modest optimism in the region. Trade volumes appear to have revived from a period of sinking demand and fear about future growth, and fortunately these factors have not led to any overtly protectionist measures. Against this backdrop, we are ever so aware of the need for continued and committed efforts toward the sustainable development of small, micro, and medium enterprises(SMMEs), with specific focus on building their capacity to engage in international trade.
Although the barriers faced by SMMEs vary based on each specific industry and economy, we note some challenging areas that are common to all and that need greater attention if SMMEs are to reach their full potential. These areas focus on SMME start-ups and sustainability, facilitating economic inclusion and broadening the capacity for SMME success.
One of the most fundamental challenges remains access to finance. Traditional banks and va r i o u s i n t e r n a t i o n a l institutions are catalysts in providing access to information concerning financing programs as well as broader access to loans. Access to finance at every stage of a business cycle is crucial to the success of SMMEs ? from the point of conceptualization, start up, commercialization.
Another identified challenge is access to global markets, which continues to hinder the growth of SMMEs. We need to reinforce the use of information and communication technology, as a tool to accelerate not just SME growth, but also micro and small business entry into the global markets, where SMMEs can benefit from scale merits and further developments. In addition, we also encourage the free flow of business information as well as technical assistance for SMMEs wishing to explore foreign business opportunities, and in turn provide investors with the ability to make an accurate assessment of investment opportunities.
Last year during the APEC SME Ministerial Meeting, Ministers recognized that continuing to support the development of SMEs was an important component of APEC¡¯s new growth strategy. Enhancing SMEs is crucial for APEC, given that they account for around 90% of all businesses in the Asia- Pacific region and employ as much as 60% of its work force.
Access to technology is also identified as a challenge. Faced with significant challenges to leverage the benefits of ICT, collaboration between local businesses and customers is essential to promote innovation within SMMEs. We urge governments to provide taxation assistance and other incent ives to encourage and support R&D, with further emphasis on the promotion of green growth. Furthermore, we urge for the improvement of the IT infrastructure and the provision of professional training for SMMEs in response to the advancement in technology.
Although t h e r e a r e new marke t opportunities for environmentally friendly products and services, due to limited financial resources, underdeveloped competencies, and a short-term strategic view, SMMEs cannot respond adequately. In order to harness opportunities in green business, the public and private sector should work together to create a positive business environment that encourages the use of green technologies.
We should not leave anyone behind on the journey to a greener future. ABAC is working towards economic inclusion, particularly among women and youths. With a high proportion of SMMEs initiated and ran by women and young people, ABAC endorsed the establishment of the ABAC Women¡¯s Forum and the revitalization of an annual Young Entrepreneur¡¯s Summit; both events are set to take place later this year in San Francisco and Kuala Lumpur, respectively. These events will certainly provide a platform for more focus and specific recommendations to be forwarded for the APEC economies this year.
Last but not least, to support efforts toward building capacity for SMME success, ABAC continue to work on ¡°innovative growth initiatives¡± with the main objective to present best practices and policies to foster innovation among SMMEs.