enhancing msmes' competitiveness in the digital...

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2016/ISOM/SYM/016 Session IV

Enhancing MSMEs' Competitiveness in the Digital Age

Submitted by: VNCPEC

Symposium on Priorities for APEC 2017Ha Noi, Viet Nam8 December 2016

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ENHANCINGMSMEs’COMPETITIVENESSINTHEDIGITALAGE

Presenter: Dr. CAN Van Lucat Symposium on APEC 2017 Priorities

SESSION IV - MSMEs’ competitiveness and innovation in the digital age

December8,2016 Dr.C.V.Luc/APEC2017Priorities 1

Hanoi, December 8th, 2016


CONTENTS

I. Background

II. WhyMSMEs?

III. HowtoenhanceMSMEs’competitiveness?

IV. Futureagenda

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- APEC’s mission: to support sustainable economicgrowth and prosperity in the region.

- APEC's aim: to ensure that the micro, small andmedium enterprises (MSMEs) have the ability to takeadvantage of opportunities for globalizing theiractivities.

PartI.Background


PartI.Background(2)

- The world is quickly changing and developing as aresult of scientific and technologica l applications ("4th Science andTechnology Revolution").

- During 2000-2016,thegrowthrateofinternetusers hasbeen16.2%p.a (fromjust415million peopleto3.42billion- 46.7%oftheworld population inJune2016); (figure1&2).

- Socialnetworkhasbecomeapopularcommunicationchannel (2.3billion users - 31.3%oftheworldpopulation)(figure3).

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Fig.1:Numberofinternetusers


Source: Internetlivestats. As of June 30 annually.

3,425

46.1%

0%5%10%15%20%25%30%35%40%45%50%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

No. of internet users (LHS) % population (RHS)

+16,2%/p.a

http://www.bized.co.ukFig.2: % population using internet 2016

C.V.Lực/DĐ-NHBL VN 2016 6

Source: Internetlivestats. As of July 1, 2016.

52%46%

3.3%

7.5%

0%

5%

10%

15%

20%

25%

30%

35%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

%population (LHS) %growth 2016/2015 (RHS)

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http://www.bized.co.ukFig.3: Digital potential globally and in Vietnam

C.V.Lực/HSB-Agribank 7

Source: website “ We are social”.


StrongtechnologicaldevelopmentinthecontextofinternationalintegrationhascreatedalargenumberofadvantagesandopportunitiesforMSMEs,including:

(i)strengtheningcapacityforaccessinginformation,markets,partners,customersandcapital;

(ii)reducingoperatingcoststhroughoptimizingoperationalmodel,strengtheningtechnologicalapplication,increasinglaborproductivity;

(iii)increasingcreativityandinnovativecapacity;

(iv)opportunitiestolink,connect,andparticipateintheregionalandglobalvaluechains,...etc.

PartI.Background(3)

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PartII.WhyMSMEs?

ØMSMEs occupy the largest proportion of thenumber of enterprises (around 97% of the total)in the APEC economies;

ØAccounting for 60% of GDP and 60-90% of totalemployment;

ØConsidered as a driving force for growth,innovation and creativity in APEC economies.


- Since the Los Carbos Conference (Mexico) in2002, APEC leaders have prioritized cooperationin economic and technological development toenhance MSMEs’ capacity; and policies on digitalplatform to promote trade.

- APEC Leaders Conference in 2015-2016continued to focus on globalization andmodernization of MSMEs; and adopted the"Boracay Action Agenda to Globalize MSMEs” inManila (11/2015).

PartII.WhyMSMEs(2)?

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TheBoracay ActionPlanagreedoneightpriorityareastosupportMSMEs,including:

(i) decreasingtariffandnon-tariffbarriers;

(ii) increasingexchangeofinformationonnon-tariffmeasures;

(iii) promotinguniformityandcommonstandards;

(iv) enhancingexchangeofinformationoninnovationanddiversificationofaccesstofinance;

(v) promotinge-commerce;

(vi) supportingMSMEstopromotefemaleleadership,etc.

PartII.WhyMSMEs(3)?


InSeptember2016inPeru,SMEMinistersendorsedthe StrategicPlanfor2017-2020 ofSMEWG.

SMEWGfocuseson4priorityareas,including:

(i) Promotingentrepreneurship,innovation,anddigitaleconomy;

(ii) Improvingaccess tofinancetosupportbusinessexpansionanddevelopmentofSMEs;

(iii) Creatinganinclusivebusinessecosystem thatsupportsSMEgrowth;

(iv) Expandingmarketaccess andincreasingabilitytojoinglobalvaluechainsforSMEs.

PartII.WhyMSMEs(4)?

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The2016SMEMinisterialStatementacknowledges thefactthatmodernizationofSMEsimpliestakingconcretestepstoincreasetheirinnovationcapacities; focusingon:

Ø Fosteringenablingenvironmentsandpolicies, innovation,

Ø Reinforcingaccesstofinance,ICT infrastructureandcapacitybuilding,

Ø EnhancingparticipationofSMEsine-commerce,andOnline-to-Offline(O2O)businessmodelstohelpthemgainaccesstonewmarkets,

Ø ReducingtechnologicalgapsfacedbySMEs,andprogressivelypromotingamore sustainable,eco-friendlyandgreenproduction.

PartII.WhyMSMEs(5)?


MSMEs’ competitiveness matters for their success in exportmarkets, for competitiveness of their countries, for economicgrowth and inclusiveness.

MSMEs’ competitiveness?- Capacity to compete- Capacity to connect- Capacity to change- External factors change very rapidly; thus competitivenessimplies adaptation and resilience. The key to adaptability is tobe constantly connected to major sources of information. Byaccessing and exploiting information about consumer demand,competitors and technological developments, firms stay efficientand enable future change.

.

PartII.WhyMSMEs’competitiveness?

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Table1:MSMEs’competitivenessindicators


Fig.4:MSMEs’competitivenessacrossregions

(2015)

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Fig.5:MSMEs’competitivenessbyfirmsize


Source:ITC(2015)

Fig.6:MSMEs’ competitivenessinlessdevelopedeconomies

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Source:ITC(2015)

Fig.7:MSMEs’competitivenessindevelopedeconomies


MSMEs encounter severalkeydifficultiesandchallenges:

(i) ever-increasingintensecompetition;

(ii) challengesofscale,humanresources, financeandtechnologicalplatforms;

(iii) legal,technologicalandcommunication risks.

Instead of focusing on traditional factors, MSMEs now shouldexploit and promote entrepreneurship, customer & partnerrelations, innovative and creativity capacity, access toinformation, flexibility toward rapid market changes, etc.

ChallengesforMSMEs

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PartIII:HowtoenhanceMSMEs’competitiveness?

1.ImprovingbusinessenvironmentØ Guaranteeing a sound, convenient and safe business environment;

Ø Encouraging innovation and creativity at all levels, including thegovernment, governmental agencies and enterprise level;

Ø Strengthening legal framework; including guidelines and policiesfacilitating MSME operations, mechanisms and policies to support theirdevelopment;

Ø Supporting and advising MSMEs in legal, management and informationissues;

Ø Enhancing the role of the supportive institutions and programsencouraging creativity, research and development of MSMEs;

Ø Propos ing initiatives to inrease access to finance by MSMEs (includingangel and venture capital funds..etc).


HowtoenhanceMSMEs’competitiveness(2)?

Ø Enhancing performance of the MSME loan guarantee funds, R & Dfunds, Green energy funds, etc;.

Ø Improving IT infrastructure and supporting MSMEs in applying anddeveloping appropriate technology;

Ø Establishing institutions/agencies in APEC to support, propagandizeand counsel MSMEs in information, policy, market, andtechnological issues, etc;

Ø Promoting the role of the Chamber of Commerce and Industry,industry associations, and career development agencies;

Ø Forming the regional Union of businesses to generate opportunitiesfor MSMEs to join the value chain of MNCs and FDI firms in theregion and beyond.

1.Improvingbusinessenvironment(cont’d)

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2.EnhancingtheMSMEs’competitivenessØ Buildingprogramstoenhancecorporategovernancecapacity,especiallyinbusinessstrategy,managementandhumanresourcedevelopment;

Ø Applyingmoderntechnologysuchascloudcomputing,digitalchannelsintosupplychainmanagement;

Ø IncreasingaccesstofinanceofMSMEs(includingprovisionofknowledgeoffinanceandbankingservicesforMSMEs);

Ø PromotingR&Dandenhancingopportunitiesforcooperationbetweenenterprisesindifferentfieldstoimprovecreativityandinnovation;

Ø SupportingrecruitmentandstafftrainingforMSMEs;

Ø Strengtheningtheconnectionbetweenbusinessesinthearea,formingclusterstoshareopportunities,information,marketresearchandincreaseaccesstomarketofMSMEs,especiallyinAPEC.



2.EnhancingtheMSMEs’competitiveness(cont)

ØRaisingawarenessofandcapacityforsustainabledevelopment, focusingongreenenvironment,usingcleanfuelsandrenewableenergy;

ØRaisingawarenessof,andsupporting researchcapabilitiesandapplyingadvancedScienceandTechnology à toenhance innovationandcreativityofMSMEs;

ØSupportingstafftraining forMSMEstodevelopskillsindigitaltechnology, riskmanagement,andfosterinnovation.


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3.Strengtheningcooperation andconnection betweenMSMEsandotherbusinesses,promotingPPP:

Ø Strengthening relationship betweenMSMEsandlargeenterprises:

• Organizingtechnology conferencesandseminars;

• Developingandpromoting theactivities ofassociations andorganizations supporting largeenterprisesandMSMEs;

• Developingbusinessportals, whichprovideinformation exchangebetweenMSMEs,largeenterprises, associations;andGovernments;

Ø Promoting cooperation networkbetweenMSMEsandinvestors,researchcentersanduniversities, etc;

Ø Strengthening public – privatepartnership(PPP);

Ø Implementingmeasurestopromote connectivity ininstitutions,infrastructureandworkforce.



4.PromotingAPECentrepreneurialspirit,start-ups,andwomenleadersofMSMEsØSupporting start-ups:

§ Propagandizing;andcreatingmechanismsandpolicies toencouragestart-upbusinesses;

§ Establishingorganizations tosupport, adviseandprovideinformationaboutstart-ups, andaccesstoangelandventurecapitalfunds...etc;


ØCreatingopportunities andfavorableconditions forwomentoplayaleadership roleinMSMEs:§ Following the statement at the APEC forum onwomen and economy in

2016, to remove barriers in economic integration for women;§ Developing policies and initiatives such as policies to prioritize training

and development, recruitment of women;§ Enhancing access to capital, markets, technology and engineering;

developing leadership and management skills for women, etc.

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In the context of APEC 2017 Forum’s theme"Creating new dynamism, fostering a sharedfuture of the Asia-Pacific", Vietnam proposed"Enhancing MSMEs’ Competitiveness in thedigital age" as one of the four priorities of APEC2017.

Asuggestedtheme


Part IV: Future agenda• Organizing 2-3 symposiums, with the participation ofinvolved parties (including MSMEs) on some related themes:"Enhancing MSMEs’ competitiveness in the digital age";"Increasing access to finance for MSMEs in Asia-Pacific";"Human Resource Development for MSMEs", etc.

• Creating forums, associations and connections betweenMSMEs and universities, research institutes;

• Launching campaigns/competitions to encourage start-ups;

• Promoting mechanisms to create favourable environmentfor e-commerce and digital applications.

§ Other?

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Q&A

Thankyou!

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