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‘Free and open trade should benefit small businesses’

The benefits of free and open trade should trickle down to micro, small and medium enterprises (MSMEs) to ensure that the objectives of job creation, wealth generation with equity and wider access to the opportunities of global trade are realized.

Doris Magsaysay-Ho, 2015 chairman of the Asia-Pacific Economic Cooperation (Apec) Business Advisory Council (Abac), said Apec’s priorities include embracing e-commerce to accelerate MSMEs’ access to international markets; promoting innovation and its participation in the global value chain; and promoting and ensuring MSME access to finance and affordable credit.

The Asia-Pacific region is projected to capture 33.4-percent share of global e-commerce sales by end-2015 according to a research by eMarketer.

“These upward regional and global e-commerce trends present great opportunities for Msmes to expand their market base, widen their business networks, and increase their sales toward sustained growth,” Magsaysay-Ho said.

“We need to leverage on the growing Internet usage, burgeoning middle class, and the increasing accessibility and affordability of technology to enable our micro, small, and medium enterprises to enter the global market. E-Commerce has evolved into a regular marketplace option for many buyers,” she added.

A study conducted by Abac with the USC Marshall School this year disclosed that the “most critical” limiting factor that hinders their capability to engage in e-commerce is the lack of readiness and capability. Problems of awareness, technical ability, access to talent and financing all limit the potential of MSMEs, especially in developing economies.

“For cross-border e-commerce to grow, e-payment solutions must expand beyond traditional banking solutions.  Governments must allow for new, innovative e-payments solutions and avoid the vested interests of incumbents,” Magsaysay-Ho said.

“We need an ecosystem that supports enterprise creation and increases innovation capabilities of Msmes,” she added.

MSMEs account for over 97 percent of all enterprises and employ over half of the work force across Apec economies. Small businesses contribute significantly to economic growth, with MSMEs’ share of gross domestic product ranging from 20 percent to 50 percent in the majority of Apec economies.

The Nanjing Declaration on promoting Sme Innovative Development was adopted in 2014 which urged the Apec members to take a range of measures to promote Sme innovation on a voluntary basis.

An important measure that is relevant to the innovation agenda is that of strengthening the digital infrastructure and leveraging the digital economy to accelerate MSMEs’ participation in the global value chains.

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