29-31 March 2000

Singapore

Introduction

Ladies and Gentlemen,

It is an honour and a pleasure to be with you today at this World Summit on Small Business, and I wish to congratulate the Association of SMEs of Singapore for organising this great initiative to better prepare the small and medium enterprises in meeting the challenges of the new millennium.

In the given time that I have, I would like to share with you an overview of APEC activities for SMEs.

Making up over 90 percent of all enterprises, employing 80 percents of the workforce and contributing 30 to 60 percent of each APEC member’s GNP, SME are therefore very important to APEC. Given those facts, it is not surprising to see SMEs as one of the four priorities of Brunei, host of this year’s APEC Ministerial/Leaders Meetings.

APEC has always been committed to create business environment and for this very reason SME Ministers meeting in Canada in 1997 agreed to address the special needs of these enterprises. A Framework for APEC Small and Medium Enterprises activities that was endorsed. Provided for an Integrated Plan of Action for Small and Medium Enterprises development (SPAN) which served as a set of broad guidelines for these enterprises development as well as plan for future action at national level and collaborative efforts at regional level.

Brunei Priorities in 2000

Concerned with the profound effect of the financial crisis on smaller firms, APEC Ministers felt that returning SMEs to growth was vital to economic recovery of the region. Four key policy areas discussed by SME Ministers last year at Christchurch Meeting were Education, Capital Markets, Trade Barriers/Compliance Costs and Reponding to Regional Financial Crisis.

APEC will continue to build that good momentum and this year will have an opportunity to focus on 4 areas that are vital to the continued growth of SMEs:

Information and communication technology,
Human resources development,
Strategic alliances between SMEs and large firms,
Financing of SMEs.
These priorities fit in very well with this year’s overall APEC theme – Delivering to the community with emphasis on strengthening markets and human resources development.

Strengthening of Markets and Trade Facilitation

For SMEs to contribute to economic recovery and sustainable growth, economies need to put in place open and transparent regulatory environment that support competitive markets and to invest in the development of human capital. Recognizing this, APEC will continue to progress works on strengthening markets. These include programs to help member economies that wish to implement the Principles to Enhance Competition, legal infrastructure development, new business development, and a program to help members implementing APEC’s menu of options for investment liberalisation.

APEC business sector has noted that APEC trade facilitation exercises are as important as trade and investment liberalization. Trade facilitation contributes substantially on efforts to strengthen markets and enhance market access. As example, APEC’s achievements in Standards and Conformance include encouraging alignment of members’ own to those of the international standards, achieving mutual recognition arrangements among APEC members, promoting cooperation to develop the technical infrastructure needed for those arrangements, and ensuring transparency of standards and conformance assessments.

Works on Simplification and Harmonization of Custom Procedures would be completed by 2002. These actions have already resulted in significant cost savings for exporters and importers. The committee entrusted with implementing these initiatives is also vigorously working on Paperless Trading which would be implemented by 2005.

APEC is also working on intellectual property rights and agreed to fully implement the Trade-Related Intellectual Property (TRIPs) Agreements no later than this year and has facilitated technical cooperation to achieve the goal. Other works that strengthen market and market access for the benefit SMEs include non-binding principles on government procurement, deregulation, dispute-mediation, mobility of business people and services, notably the regional directory of professional services and works on mutual recognition of skills qualifications in engineering fields.

A set of APEC Principle on Trade Facilitation that would assist policy makers in formulating and implementing trade and investment measures that are pro-business, and programs to implement those Principles will be developed this year. All these will assist SMEs to compete and grow.

Capacity Building

APEC Leaders has long realized that rapid development of information and communication technology and the increasing emphasis on knowledge-based industries mean that level of playing fields for SMEs has become more uneven. Last year they directed their Ministers to give special attention to improving effective and coordinated delivery of APEC economic and technical cooperation and capacity building programs, in accordance with Manila Declaration. Ministers subsequently endorsed the work programs on Encouraging the Growth of Small and Medium Enterprises especially in the area of capacity building. APEC fora have been asked to proceed with their work programs on e-commerce to enhance capacity in all economies in the areas of electronic customs procedures, electronic government procurement and electronic payments.

In addition, 5 areas where APEC could contribute towards enhancing capacity building process in the region are:

Promotion of effective education-business linkage to support knowledge-based enterprises,
Developing capabilities of the current pools of managers,
Developing future Small and Medium Enterprises managers,
Facilitating transfer of skills between member economies, and lastly,
Developing the skills of entrepreneurs and consumer- protection and confidence.
As a result of these calls, two-action oriented initiatives were proposed:

APEC Networking of Small and Medium Enterprises in-Service or Up-grading Training Programs, and
an APEC Networking of Small and Medium Enterprises Incubator Centres.
Creating New Opportunities

As I said earlier, the focus this year APEC SME Ministerial Meeting augurs well with this year’s APEC theme – Delivering to the community and especially the sub-themes building stronger foundations and creating new opportunities.

The recent APEC survey on E-Commerce by Price Waterhouse Coopers indicated several barriers to the uptake of e-commerce by SMEs. Guided by current efforts to address the issue of improving the uptake of e-commerce, Brunei has proposed works to enable these businesses to capitalise on E-Commerce through Formulation of an E-Commerce Model. In specific term, works include:

APEC Trade Link,
Formation of a Task group to Coordinate and Implement An Action Plan for Educating SMEs on E-Commerce, and
Formation of an ad-hoc Task Force to explore the Possible Options for Capital Financing of APEC SMEs in Information and Communication Technology applications and businesses.
APEC has recognized that financing is a constant concern for SMEs. To promote greater access to financial markets in the region, APEC proposed the following:

an establishment of APEC SMEs Financing Database Centre that may narrow the knowledge gap in the financial and capital markets and assist in facilitating the growth of financial markets for SMEs in the region, and
Formulation of a Coordinating mechanism for Facilitating a Free Flow of Investment Capital for SMEs among APEC economies. A survey of Start-up Companies and Venture Capital was undertaken by Chinese Taipei.
While SMEs in the APEC region are significant contributor to the region’s growth, there is an indication that not all small businesses are benefiting from APEC process. Considering that there are 40 million of Small and Medium Enterprises in APEC, the potential for these enterprises to advance global economic growth to higher level is very significant. Strategic alliances - an attempt to capitalise the diversity of APEC member economies would include the following work programs:

Pilot Projects on Strategic Alliance between Small and Medium Enterprises and Large Firms in APEC,
APEC Small and Medium Enterprises Strategic Alliance Coordinating Centre,
Strengthening of Development of Match Making Agencies in each economy,
Study Tours and In-depth Profiling Small and Medium Enterprises in the Region.
Additional activities being planned in support of these efforts are the seminar on "Economic Revitalization through Start-Up Companies and Venture Capital, another initiative of Chinese Taipei, "APEC Business Partnership for Small and Medium Enterprises, US-Thailand initiatives, and lastly, Workshop on Small and Medium Enterprises and New Business Development by Japan.

The Workshop planned in conjunction of the 7th APEC Small and Medium Enterprises Ministerial Meeting in June this year will focus on a theme "Towards Building a Favourable Environment for an Accelerated Adoption of E-Commerce by APEC Small and Medium Enterprises." Similarly, the E-Commerce Convention in Tokyo in May this year will provide a big push for the development of e-commerce in APEC region.

Private Sector Participation

One thing that sets APEC apart from other regional and international organizations is the heavy participation of business people in its process. At the last 6th SME Ministerial Meeting in Christchurch, New Zealand, around 300 business leaders participated in the Business Forum held parallel to the Ministerial Meeting. The joint session provided Ministers and business leaders an opportunity for positive interaction and exchanges on issues important to SMEs.

This year a similar format will be adopted for the SME Ministerial Meeting in June in Brunei. In conjunction to the official event, a series of private sector-led activities – APEC Business Forum, E-Trade Fair, Young Entrepreneurs Organization and Women Leaders Network Meeting will be held. These are meant to encourage strong and meaningful participation of region’s SMEs.

I have brought along some brochures of the forthcoming Small and Medium Enterprises Ministerial Meeting and related events for interested participants. Brunei welcomes you and your valuable participation. There are members of the organizers from Brunei here with us and I am sure they would be very happy to answer any questions that you may have for them. Alternatively, you may want to visit their website.

Small and Medium Enterprises Activities by APEC Fora

You may have notice by now that APEC’s works on SMEs is not confined to one particular working group or committee, and this explains the diverse interest and cross-cutting nature of the issues.

I have listed some APEC Fora that are advancing works on SME in my text and details of their activities can be obtained from our regular up-dates and download from our website www.apecsec.org.sg.

Of further interest to you, this year APEC intends to enhance its outreach activities to the business and its wider community. As a first step, APEC Secretariat will be revamping its website to make it more user-friendly. Australia is leading an initiative to better promote understanding of trade and investment liberalization by focussing on experiences of reform development in APEC economies and the positive works APEC had already achieved through publications. A new and improved window in our web-site will also be developed also under Australia’s initiative to facilitate access to information for business.

Finally, it is my pleasure to speak at this event. I look forward to hear good outcomes of this Conference.