SMALL and medium enterprises (SMEs) should have access to more sophisticated technology for business, as they improve product quality to become competitive at home and abroad.
Results of the 2018 survey on SME development released by the Asian Institute of Management (AIM) Rizalino S. Navarro Policy Center for Competitiveness (RSN PCC) showed that skills and product quality are the top enablers of SME success, alongside opportunity-seeking entrepreneurial mindset.
The survey found that majority of SMEs do not search for new markets and do not export, with the business environment influencing their inclination or aversion to export.
Obstables in growing
It cited low product quality and hostile business environment, such as poor infrastructure and tight competition, as the top obstacles to SME competitiveness.
“On average, SMEs have access to basic technology, inputs and supplies. But SMEs have limited usage of more sophisticated technology for business (e.g. cloud-based, digital payments, credit and debit card transactions and website),” it noted.
Older and medium-sized SME respondents are more likely to respond to tight competition in ways that are conducive to growth compared to younger and smaller firms, it added.
The survey further said majority of SME respondents have not maximized linkages with value chain partners, such as large and foreign firms.
“SME respondents grew moderately in the last two years, but their market share remained the same,” it added.
Access to finance, technology
To enable SME success, the survey pushed for promotion of growth mindset in capacitation programs for owners, managers, and workers, as well as training for improving product quality.
“Increasing awareness of SMEs on the benefits of access to technology, finance, government programs and linkages with large and foreign firms can allow them to take advantage of available opportunities,” it said.
The survey stressed that strengthening institutions is crucial to curb inefficiency caused by corruption, poor infrastructure, and complicated exporting process, which hamper capacity of SMEs to compete.
The survey data were culled from 480 randomly selected SME respondents from the National Capital Region (NCR) and Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon).
SMEs make up 99.6 percent of all registered businesses in the Philippines and employ over 70 percent of the working population.
On Nov. 12, in Singapore, Trade Secretary Ramon Lopez together with other Asean economic ministers signed the Asean agreement on e-commerce, which provides a set of policies, principles, and rules to govern cross-border e-commerce in the region. This agreement is set to benefit SMEs in the country, Lopez said. (Philexport News and Features)