VietNamNet Bridge – Over the past 20 years, APEC meetings have focused on how to improve the capacity of Micro, Small Medium Enterprises (MSME) in accessing the global value chain.
Motivation for national growth
In fact, MSME and startups have been instrumental in boosting strong innovation and development in the Asia-Pacific region and have been instrumental in shaping a new trade.
At the forum on improving access to finance for small and medium enterprises (SMEs) held on September 11 in Ho Chi Minh City with the participation of officials and experts on finance and business from APEC economies, Mr. Nguyen Hoa Cuong, Deputy Director General of the Enterprise Development Agency (Ministry of Planning and Investment) and the head of the SME APEC working group, affirmed “small and medium enterprises have become the main driver of national growth”.
APEC statistics from many sources also show that in this region there are about 110 million MSMEs, accounting for 98% of the total number of enterprises. These enterprises account for 70% of total exports and create jobs for 54% of the population.
In particular, the agriculture-food sector is expected to have a considerable growth potential, accounting for 4% of APEC’s GDP growth as well as 23.4% of employment. As for Vietnam, there are more than 600,000 registered MSME enterprises, an increase of over 100,000 enterprises a year. MSMEs in Vietnam contribute over 40% of GDP and generate over 50% of employment. Although playing such an important role in the economy, MSMEs are facing many difficulties, especially difficult access to financial resources and market.
Talking about difficulties in accessing finance for SMEs in Vietnam, Cuong said that due to difficulties in accessing finance, SMEs could not develop despite having many creative ideas. That is why APEC is making every effort to help SMEs access capital, markets, and deeper engagement in global value chains.
Dr. Tran Quang Thang, Director of the Institute of Economics and Management of Ho Chi Minh City, pointed out that the main problem is that SMEs often do not have collateral, and their capital resources are weak so banks and venture capital funds “do not to pay attention to” them although they have many potential projects.
He quoted the fact that “some banks say they can lend (SMEs) up to 90% of collateral, even 110%. They eloquently stated that at workshops but in fact they did not lend to 60% of collateral, so SMEs are very miserable.”
Studies by the APEC Small and Medium Enterprise Working Group also show that, except for large companies already, medium-sized firms are beginning to be noticed by banks, with the introduction of many credit products. But the micro-enterprise segment – the largest in Vietnam – is not being paid attention to by banks. To promote the development of MSMEs, it is necessary to improve access to finance and funding to support small and medium businesses’ development; increase government support to reduce these burdens on procedures and regulations for these enterprises; and at the same time, encourage economies to simplify and synchronize regulations and administrative procedures.
Solving difficulties with high-tech solutions
Experts believe that start-up entrepreneurs will face increasing difficulties in conducting cross-border exchanges and entering the international market if they do not accept the rapid change of digital technology.
In fact, the development of information technology and the digital economy has become one of the key core issues in modern economic development. Thus, only when MSMEs have knowledge and understanding of the opportunities and challenges of digital change, can fully realize their potential and create sustainable development, to integrate into a common future of the regional economies.
The Internet is considered an important driving force in the context of APEC being connected more than ever. There are now 3 billion people connected to the Internet in APEC economies and the number is expected to increase to 5 billion by 2025. The Internet helps businesses reduce costs and improve productivity.
According to Hoang Van Dung, chairman of the APEC Business Advisory Council (ABAC) of Vietnam, enterprises using high technology and the Internet are growing 2.1 times faster than those who do not use such technology.
Thus, policy-makers in APEC economies, owners of e-commerce platforms, multinationals, technology incubators, motivators, experts, etc. will work together to help SMEs and startups make the most of the opportunities created by digital technology. Only when SMEs understand the opportunities and challenges of digital transformation can they unlock the potential of sustainable, creative and quality development towards a common future.
Truong Son