Why SMEs could be the heart of ASEAN’s economic success

Amit Bathla, VP, Marketing, APAC, Alcatel-Lucent Enterprise | Nov. 30, 2017

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

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Amit Bathla, VP, Marketing, APAC, Alcatel-Lucent Enterprise

 

The ASEAN Economic Community (AEC) was launched in 2016, and it aims to integrate Southeast Asia's diverse economies into a single market. Defined by a few key characteristics - a single market and production base, a highly competitive economic unit, a region of equitable economic development and a region fully integrated into the global economy - the AEC seeks to transform the ASEAN economy into a region with free movement of goods, services, investment, skilled labor and freer flow of capital.

One year on, ASEAN has made certain progress in promoting some of the economic potentials and benefits of the region. Interest in the region has also increased, creating opportunities for local businesses. Small and medium enterprises (SMEs) - defined as enterprises with an annual sales turnover of under S$100 million, with less than 200 workers - collectively are a key driver to the gross domestic product (GDP) of ASEAN economies.

With SMEs accounting for over 97 percent of all enterprises across the Asia-Pacific Economic Cooperation (APEC) region1, AEC's economic success could very well rest in the success of these businesses. That said, SMEs currently only account for 35 percent or less of direct exports. There is a huge untapped potential for cross-border trade from SMEs to boost the region's economic growth and development. What is stopping SMEs from tapping this huge potential for cross-border trade?

Scaled activity without scaled budgets

There's a huge disconnect between the number of SMEs and their spend. One of the core challenges is the lack of budget as compared to their larger peers, which forces them to limit their options significantly. This huge disconnect means SMEs must seriously consider what they need to compete. However, with the advancements in technology, as well as the option of customized solutions, the digital world is creating massive opportunities for SMEs willing to embrace transformation.

Business on the go

In today's business environment, employees need to be able to work from anywhere, anytime - whether from the office, home or on the road. By switching to a mobile workforce, employees become more available, productive and happier.

That said, there's high costs and complexity involved. Setting up the hardware to accommodate a mobile workforce contributes to high equipment costs, complex installation, Virtual Private Network (VPN) integration, and much more. Additionally, a mobile solution may be operationally complex and calls for IT support and maintenance. IT departments need robust strategies to protect against security breaches, viruses and malware, and network infrastructure must support more devices, rich applications, and higher bandwidth demands.

It's time for the hybrid cloud

In comes the game-changer: hybrid cloud solutions. Employees can easily install corporate applications on their devices and become immediately mobile. The solution just needs to be hybrid-cloud "connected" to the existing telephony system. Additionally, since the service is provided on the cloud, there is no requirement for a VPN, or a remote security solution.

A recent study from IDG Research Services asserts, "it's no secret that digital business transformation and hybrid cloud computing are two of the most dominant IT trends today." The Asia-Pacific Hybrid IT Readiness Report 2016 also found that 63 percent of respondents see the strategic role of IT as achieving growth momentum and 50 percent see it having a strategic role for digitally transforming the organization2.

An investment in cloud-based business continuity can mean the difference between thriving, surviving, and becoming obsolete3. Migration to the cloud means that SMEs can commit to a consistent expense structure that is flexible and can create a business advantage. SMEs must be online, connected and accessible via mobile apps. A pay-per-use service offering can deliver the services and the budget flexibility that SMEs require, especially when essential services are basically provided for free.

Given their potential, SMEs need to tap on cross-border trade to boost the region's economic growth and development. Policymakers are looking at easing policy constraints, improving infrastructure, and doing more to allow SMEs to take the leap to overseas markets. To be successful today, SMEs need to be online, connected and accessed easily. As competition intensifies within the region, SMEs must leverage technology to better focus on their core business.

 

1http://www.apec.org/Groups/SOM-Steering-Committee-on-Economic-and-Technical-Cooperation/Working-Groups/Small-and-Medium-Enterprises

2http://info.centurylinkforbusiness.com/2016-FSHybridITReadinessReport.html

3https://www.carbonite.com/globalassets/files-white-papers/carb-idc-smb-cloud-growth-opportunity-report.pdf