SME Policy Index: ASEAN 2018
Boosting Competitiveness and Inclusive Growth
The SME Policy Index is a benchmarking tool for emerging economies to monitor and evaluate progress in policies that support small and medium-sized enterprises. The ASEAN SME Policy Index 2018 is a joint effort between the Economic Research Institute for ASEAN and East-Asia (ERIA), the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Coordinating Committee on Micro, Small and Medium Enterprises (ACCMSME). The report is the outcome of work conducted by the ten ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam).
Divided into eight policy dimensions, it builds on the previous edition of the ASEAN SME Policy Index 2014. The current edition presents an updated methodology which makes this document a powerful tool to assess the strengths and weaknesses that exist in policy design, implementation, and monitoring and evaluation for SMEs, and allows for a benchmarking of the level to which the ASEAN Strategic Action Plan for SME Development (SAP SMED) 2016-2025 has been implemented. Its objective is to enhance the capacity of policy makers to identify policy areas for future reform, as well as implement reforms in accordance with international good practices.
The report provides a regional perspective on recent developments in SME-related policies in Southeast Asia as well as in individual ASEAN Member States. Based on this analysis the report provides a menu of concrete policy options for the region and for the individual countries.
Entrepreneurial education and skills
In many countries, policy makers are increasingly looking at ways to stimulate entrepreneurship in order to boost economic growth. This interest is underpinned by a theory of entrepreneurship elaborated by Kirzner (1973[1]) and Hausmann and Rodrik, among others: that the entrepreneur is a critical agent in driving the discovery process required to generate growth and equilibrate markets. Kirzner’s entrepreneur plays a role in equilibrating markets – s/he picks up on the profit opportunities that exist when markets are at disequilibrium until competition picks up and returns the market to equilibrium. Hausmann and Rodrik (2003[2]), meanwhile, have shown how, through experimentation, lone entrepreneurs can spawn entire industries. They cite the examples of garments in Bangladesh, cut flowers in Colombia and information technology (IT) in India. This theory underpins the idea that entrepreneurship generates growth by creating new economic opportunities, stimulating competition and driving productivity improvements in an economy.