Techblog
Leveraging the ASEAN Economic Community for small business expansion
Supporting small businesses is a key priority for ASEAN over the next nine years. Now is the time for entrepreneurs to act to take advantage of the benefits becoming available through the new ASEAN Economic Community (AEC). Here's how SMEs can leverage the AEC's plans to power your growth.
The creation of the ASEAN Economic Community last year has paved the way for SMEs to expand across the region. The economic bloc unites ASEAN's 10 member states, creating a massive US$2.6 trillion market with 622 million people. The free movement of goods, services, skilled labour, capital and investment is expected to trigger massive growth, more than 5.3 percent above baseline growth within five years, according to Deloitte.
This all means big opportunities for small business. As the governor of Malaysia's central bank Dr Zeti Akhtar Aziz said: “SMEs in the region are no longer constrained by national borders.”
Make a five-year plan and look long-term
To benefit from the AEC, small businesses now need to make plans based on the actions in the ASEAN Strategic Action Plan for SME Development (SAPSMED) 2016-2025.
Your plans should include two phases. The first five-year phase needs to focus on integrating your business into the AEC and regional value chains. Phase two charts your path to global expansion, with measures to make your business globally competitive, innovative and resilient.
The idea is that growing within ASEAN initially can help your business achieve the scale and efficiency needed to compete in the global marketplace. For help getting started, check out the country guides at the online ASEAN Market Place, which provide information on business environments and regulations across ASEAN.
Partner with other SMEs
Next, you can explore partnering with other small business to collaborate and facilitate growth. Partnerships are being prioritised because small businesses are considered to perform better when they're allied with other SMEs.
You can find potential partners in your industry across ASEAN using the directory at the ASEAN Market Place. More than 20,000 businesses are expected to list there this year.
Explore funding to grow into new markets
To fuel your growth into new markets, you can look into new sources of funding becoming available for small businesses.
One option you can consider is SPRING Singapore's Capability Development Grant (CDG). This government assistance programme is designed to help companies build capabilities across 10 key business areas that aid growth, from adopting technology to raising service standards. You can use the grant to defray 70 percent of the costs for large-scale upgrading projects, in areas like product development and productivity.
You could also benefit from SPRING's Collaborative Industry Projects (CIP) initiative, which supports cross-industry collaboration that addresses industry and business challenges. For example, this could support an initiative that optimises resources through outsourcing. All projects need at least three SMEs committed to implementing them.
To be eligible for either of these, your business needs to be registered and operating in Singapore, with at least 30 percent local shareholding and annual sales turnover of less than $100 million.
Strengthen fundamentals and internal processes
To ensure your business is best prepared for growth, you also want to strengthen internal processes and fundamentals. SPRING's CDGs can help here too.
You can access assistance to improve your management systems and processes, which begins with an organisational review of your business. The results are then used to formulate a strategic developmental roadmap, and at the end your business gets assessed. You can also follow the steps in their guide to strengthen your management practices.
Maintain your competitive advantage
Finally, you want to ensure you maintain your competitive advantage as you scale to cement your early-mover benefits.
SPRING's business innovation strategy support can provide a structured approach for companies to gain competitive advantages by converting ideas into new or improved products, processes or business models. You'll get help identifying organisational strengths and weaknesses, developing ideas to tap market trends and creating roadmaps to launch new products and services.
Or you might like to develop your brand. SPRING can help you use brand development as a strategy to enhance competitiveness, identifying your unique proposition and differentiating your business from competitors. You can also use their marketing toolkit to start building your brand.
With the ASEAN Economic Community set to supercharge small business growth, it's time you moved to grab the opportunities. The sooner you do, the sooner you'll be on the road to scale. Remember to consider:
- Plan for five years and long-term.
- Partner with other SMEs.
- Explore funding to help you expand.
- Strengthen fundamentals internally in your business
- Maintain your competitive edge.
Sources:
- http://www.bnm.gov.my/index.php?ch=en_speech&pg=en_speech_all&ac=558&tpl_id=395
- http://www.miti.gov.my/miti/resources/ASEAN_Strategic_Action_Plan_for_SME_Development_2016-2025.pdf
- http://www.spring.gov.sg/Growing-Business/Grant/Pages/capability-development-grant.aspx
- http://www.spring.gov.sg/Developing-Industries/Industry-Initiatives/Pages/collaborative-industry-projects.aspx
- http://www.spring.gov.sg/Building-Trust/Business-Excellence/BE-Links-Resources/Documents/Embarking_on_BE_Guide_for_SMEs.pdf
- http://www.spring.gov.sg/Growing-Business/Grant/development-areas/Pages/Business-Strategy-Innovation.aspx
- http://www.spring.gov.sg/Growing-Business/Grant/development-areas/Pages/Brand-Marketing-Strategy-Development.aspx
- http://usaei.smu.edu.sg/sme/toolkits/marketing