Technology advances bring great opportunities to small- and medium-sized enterprises (SMEs) in the Asia-Pacific region once obstacles are resolved.
|The APEC Workshop on Harnessing Digital Trade for SMEs |
In the framework of the Asia-Pacific Economic Co-operation (APEC), the Vietnamese Ministry of Industry and Trade in combination with the APEC Secretary Board held the two-day “APEC Workshop on Harnessing Digital Trade for SMEs” with the aim of implementing one of Vietnam’s important initiatives on facilitating cross-border e-commerce.
Addressing the workshop, Lai Viet Anh, deputy director general of Vietnam e-Commerce and Digital Economy Agency under the Ministry of Industry and Trade, said: “Dramatic technology advances have created and enabled new lifestyles and forms of business in every corner of the world. Digitalisation and new technologies have significantly changed how and what we trade.”
Meanwhile, according to the Organization for Economic Co-operation and Development’s (OECD) Trade Policy Paper No.205, there has been an increase in “online platforms that has led to a rising number of small packages crossing international borders,” and “new technologies are also changing how services are produced and supplied, blurring distinctions between modes of delivery and posing new challenges for the way international trade and investment policy is made.”
Digital trade, in this context, is emerging as an inevitable trend and contributes dramatically to economic growth and prosperity across the globe. Ho Thi Tu Uyen from the e-Commerce and Digital Economy Agency said, “In 2017 in the Asia-Pacific region, retail e-commerce sales stood at $1.365 trillion, six times higher than Vietnam’s GDP and equal to the GDP of Vietnam, Thailand, and the Philippines together.” In addition, the latest study by Accenture and Oxford Economics showed that e-commerce could add $1.36 trillion to total global economic output by 2020.
Digital trade brings about opportunities for various stakeholders, especially SMEs. Thanks to technology advances, the growth of online platforms, and so on, challenges that SMEs used to face in the old world could now be better dealt with, therefore presenting unprecedented opportunities for SMEs to enter global markets, such as the eBay network.
However, while digitalisation brings about opportunities for SMEs, a large number of these enterprises are not yet ready to reap the benefits of the technological revolution. Evidence shows that SMEs are lagging behind in adopting digital technologies. “Technologies, human resources, awareness of e-commerce, and language are all barriers to Vietnam’s SMEs,” Nguyen Binh Minh, commissioner of Vietnam e-Commerce Association, told VIR.
Furthermore, according to the Key Issues Paper released by the OECD lately, for many SMEs, “digitalisation has resulted in disruption of markets, including increased contestability of local markets, rapid obsolescence of knowledge, skills, and business models, and increased complexity in the business environment.”
With changes going beyond traditional business models and SMEs accounting for more than 97 per cent of enterprises in the APEC region, they will possibly hit the hardest in the new environment.
As the most dynamic and energetic players in the new game, SMEs’ participation in e-commerce is actively supported by APEC ministers. The 2017 APEC Ministerial Meeting Statement stressed: “ We support initiatives to foster greater MSMEs' capacity and participation in e-commerce, and promote 'Online-to-Offline' (O2O) model and digital resilience.” Besides, the ministers also emphasised, “MSMEs’ participation in the digital economy should foster inclusive growth and reduce inequality.”