ASEAN SME Policy Index 2024: ASEAN Advances SME Policy Frameworks Amids Global Challenges

Vientiane, 20 September 2024: The Association of Southeast Asian Nations (ASEAN), through the ASEAN Coordinating Committee on Micro, Small, and Medium Enterprises (ACCMSME), ERIA, and the Organisation for Economic Co-operation and Development (OECD), have jointly released the ASEAN SME Policy Index 2024.

The report highlights significant progress in improving the policy and regulatory frameworks for small and medium-sized enterprises (SMEs) and micro enterprises across Southeast Asia, despite recent global shocks such as the pandemic, geopolitical tensions, and disruptions in global supply chains.

Titled SME Policy Index ASEAN 2024: Enabling Sustainable Growth and Digitalisation, the report provides a comprehensive assessment of SME development policies across ASEAN Member States. It benchmarks progress compared to the previous edition in 2018 across eight policy dimensions: productivity, technology, and innovation; environmental policies and SMEs; access to finance; access to markets and internationalisation; institutional framework; legislation, regulation, and tax; entrepreneurial education and skills; and social enterprises and inclusive SMEs.

The 2024 edition introduces new indicators focused on digitalisation, SME greening, inclusive business models, and policy responses to the COVID-19 pandemic.

Key findings reveal that ASEAN Member States have made commendable strides in enhancing SME policy frameworks. The average scores across countries and policy dimensions have improved since the 2018 assessment, reflecting an increasing recognition of SMEs as drivers of inclusive and sustainable economic growth and innovation.

The report notes that SME policy frameworks have grown more comprehensive, offering SMEs a greater variety of customised support. However, there is room for improvement, particularly in enhancing collaboration between institutions and across government levels to provide an integrated suite of policies and programmes for SME development. There is also evidence of convergence between regional SME policies and initiatives, such as ASEAN Access, ASEAN SME Academy, and the exploration of a regionally comparable unique business identification number (UBIN).

The report highlights ASEANs SME resilience in the face of the COVID-19 crisis, with governments providing timely relief measures while planning for long-term structural improvements. However, challenges remain, particularly for SMEs in the early stages of adopting environmentally friendly and digital technologies. Business informality and fragmented policy implementation also continue to impede SME development.

Speaking at the launch event organised by the Ministry of Industry and Commerce of Lao PDR through its Micro, Small, and Medium Enterprise Promotion Agency, H.E. Malaithong Kommasith, Minister of Industry and Commerce of Lao PDR and Chair of the ASEAN Economic Ministers' Meeting 2024, said, the ASPI 2024 is a significant tool in assessing SME promotion and development in ASEAN. The publication informs us of the milestones achieved and the gaps needing further improvement, particularly in facilitating recovery from the pandemic amidst global economic complications, supply chain disruptions, and geopolitical tensions.

OECD Secretary-General Mathias Cormann remarked, the OECD has been enriched by incorporating Southeast Asian perspectives into our work through our Southeast Asia Regional Programme. Economic growth in Southeast Asia has remained resilient, driven by domestic and regional demand. We have seen broader support for SMEs, helping them become more digitally savvy and globally competitive. The OECD will continue working with the region to build an SME-friendly environment and foster sustainable and inclusive growth.

Prof. Tetsuya Watanabe, President of ERIA, emphasised the importance of the ASPI 2024 for the future of ASEANs SMEs, noting that targeted policy action is needed to fully unlock the potential of ASEANs SMEs. The Index provides valuable recommendations to address these challenges, drawing on best practices.

Satvinder Singh, Deputy Secretary-General of ASEAN for the ASEAN Economic Community, shared ASEANs aspirations to empower MSMEs in cross-border trade and support their role in ASEANs shift toward a sustainable economy.

The launch event was attended by representatives from the ASEAN Economic Ministers Meeting, Timor Leste, ACCMSME, ASEAN Secretariat, Germany, Ireland, ERIA, and OECD. TheASEAN SME Policy Index 2024is the result of a 2-year collaboration and is made possible with support from the German Federal Ministry for Economic Cooperation and Development (BMZ), GIZ, and the Government of Ireland.

Publication: SME Policy Index ASEAN 2024 Enabling Sustainable Growth and Digitalisation

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