Micro, small and medium enterprises (MSMEs) in the Association of Southeast Asian Nations (ASEAN) badly need multi-stakeholder action that can empower the small business community to overcome barriers to digital trade, according to trade and technology leaders.

“It is vital to support SMEs’ growth, especially in this digitalization era,” said Michael Michalak, senior vice president and regional managing director of the US-ASEAN Business Council, at a recent roundtable on ASEAN digital exports.

He said digital adoption will contribute to the competitiveness of SMEs by reducing costs, increasing revenue, and expanding market access. SMEs can also harness digital tools to gain a better understanding of specific consumer behaviors and preferences.

“SMEs now have the ability to participate directly in global supply chains through e-commerce platforms. To ensure SMEs can use these technologies effectively, it is critical to administer necessary support and trainings on a regular basis,” Michalak stressed.

The COVID-19 pandemic led to a significant increase in digital exports within the MSME business community in ASEAN countries. However, there remain significant barriers that prevent MSMEs from seizing the full potential of digital trade, disproportionality impacting small businesses across the region.

Forum participants agreed that there is an urgent need for multi-stakeholder action to further empower the small business community. This can be addressed “through both well-calibrated policy initiatives that can effectively reduce barriers to digital trade, and tailored training opportunities that can help upskill MSMEs in their use of digital tools and solutions.”

“Digital technologies are creating opportunities for small businesses to trade and reach international markets in ways impossible a generation ago, but those opportunities are not always easy to seize,” said Karan Bhatia, vice president of government affairs and public policy at Google.

Bhatia added that to address the gaps, Google is collaborating with the International Chamber of Commerce (ICC) and the International Trade Center (ITC) to assist MSMEs in their quest for greater participation in the ASEAN digital economy.

One of their projects is to develop a training curriculum to help ASEAN MSMEs overcome these gaps and fully benefit from the growing digital economy.
The training program will train about 1,000 ASEAN MSMEs in digital export-relevant skills, and will be implemented by the ICC Centres of Entrepreneurship in collaboration with the ICC Academy, ITC, and chambers of commerce and ICC national committees in Southeast Asia.

During the event, Google and ICC also presented the initial results of their continuing research regarding the challenges and opportunities of digital exports for ASEAN MSMEs. The joint research will leverage quantitative data from roughly 1,500 MSMEs in 10 markets across the region, and will help inform both policy initiatives and tailored training programs to help MSMEs engage in digital trade.

The research will also assess the export readiness of ASEAN MSMEs, highlight the main barriers they currently face in their export journey, and provide insights into the critical role of digital technologies in promoting trade and continued growth within the MSME community. The full report will be published in early October.