Report: Business Development Strategies for SMEs in Global Financial Crisis Study Meeting, 23-26 November 2010, Taipei, Republic of China

Group Photo of Participants

BRIEF DESCRIPTION AND BACKGROUND OF THE PROJECT

The study meeting aimed to examine the economic environment after the global financial crisis, assess the impact of the current global economic uncertainty on SMEs, share ideas and case studies of SMEs that thrived during the crisis, and recommend new growth strategy.

OBJECTIVES FOR PARTICIPATION

My expectation from this APO Study Meeting is to learn from the sharing of experiences of the different participating countries. Specifically, I was interested to find out: (1) what their response has been to the crisis; (2) how effective has these responses been in helping their SME sector surpass the crisis and (3) what lessons can be learned in so far as business development strategies for SMEs during crisis times is concerned. I had hoped to learn from my co-participants in much the same way that they also will learn from my sharing and the experience of the Philippines as regards this area.

PROFILE OF PARTICIPANTS

There were a total of 18 participants from ten countries, including two from the Philippines namely:

Emerson G. Cuyo
Department Manager II
Enterprise Risk Management Policy Department
Small Business Guarantee and Finance Corporation

* SBGFC is a government financial institution attached to the Department of Trade and Industry and under the policy, program and administrative supervision of the Micro, Small and Medium Enterprise Development Council. It is mandated to provide financing initiatives, among a package of comprehensive policies and programs to assist MSMEs in all areas, including information services, training and marketing.

Maximo A. Ricohermoso
President and CEO
MCPI Corporation

* MCPI Corporation is Filipino enterprise engaged in seaweed cultivation and manufacture of natural grade carrageenan (PNG), an organic hydrocolloid extracted from red seaweed and used for a wide range of food and non-food applications.

HIGHLIGHTS

To meet the study meeting objectives as mentioned above, the organizers employed the following methodologies: lecture-presentations by resource persons, country presentations by the participants, site visit of a Taiwanese SME company, and roundtable dialogues and sector-specific group sessions.

The lecture-presentations by the resource persons from Japan, Singapore, South Korea and Taiwan were dispensed with in the first day of the study meeting. These resource persons shared with us their insights on the subject matter. The learning we got from them were in themselves invaluable and varied, coming as they are from different backgrounds and with each one approaching the subject from a different point-of-view.

The resource person from Singapore is Dr. Foo Check Teck. Aside from his lecture-presentation, he also served as the main facilitator for most of the discussions and roundtable dialogues during the study meeting. The main highlight of his lecture-presentation was his 12 strategies for SMEs for surviving a crisis.

Mr. Satoshi Yamamoto, the resource person from Japan zeroed in on a description/ narration of the collective experiences of Japanese SME firms in dealing with the crisis.

The resource persons from Taiwan and South Korea both come from their respective country’s small and medium enterprise administration. Their sharing was, as expected, from the point-of-view of government and how their governments intervened for SMEs during the global financial crisis.

Dr. Robert Lai, the resource person from Taiwan is also the Director General of the Small and Medium Enterprise Administration in the country. He gave the participants a comprehensive overview of Taiwan’s SME development Infrastructure and at the end, drew conclusions and suggestions.

The last of the resource persons is Dr. Jung Dae Suh of the Research Institute for Small and Medium Industries in South Korea. He discussed how SMEs in Korea were affected by drastic drop in demand for goods and services and an eroding business confidence which resulted to incidences of defaults, insolvencies or bankruptcies.

The Philippine country presentation was divided into three parts:

1) Country Introduction
2) The SME Sector in the Philippines
3) Case study of an SME responding to the global crisis.

The first two parts were presented by the undersigned while the case study was done through the experience of MCPI, as represented by the owner, Mr. Ricohermoso. In his discussion, Mr. Ricohermoso mentioned that one of the strategies adopted by his company to weather the financial crisis is stepping up the corporation’s GMP process through the able assistance of key customers in Europe and North America. In other words, the crisis was taken as a “breather”, a time to focus on improving key areas of their operations so that when the business climate starts to improve again, the company will emerge stronger than it was before the crisis. The second strategy is to shift markets – increasing sales to the domestic market and tapping into non-traditional markets like the Middle East.

The plant visit to Franz Collection, a Taiwanese SME manufacturing firm engaged in the production of high-end ceramic wares was a fitting culminating activity.

OUTCOMES AND EVALUATION

At the end of the meeting, the organizers as well as the participants in this study meeting all went home with new learning and insights not only from the lectures of the selected resource persons but also from their interaction with each other. At the very least, a new network of contacts from other countries was built, even spawning the creation of an online group where participants will continue to share and/or discuss related updates and ongoing developments on the subject matter. For the entrepreneurs in the group, the study meeting presented opportunities for new, inter-country business alliances – some of them exploring how they can join venture, cooperate, or complement each others’ business operations.

Personally, the study meeting exceeded my expectations. There was so much to learn from the resource persons as well as from the other participants. One factor for such a good result was the right mix of participants. As reported, ten (10) countries were represented in the activity. Aside from the country composition, there was also a good mix of both entrepreneurs or business owners and those coming from the government.

I learned a lot from the resource persons. I am particularly impressed with the presentation of the government minister from Taiwan as I realized how being focused on the right “vision” can spell a lot of difference and would surely bring in the desired results. The current status of Taiwan as an emerging economic force is a product not of overnight reform but of dedicated work over a period of time.

RECOMMENDATION AND ACTION STEPS

The general recommendation of the participants is to have a follow through activity to this – for updates and for continually learning from each others’ experience. At the same time, we hope that the study meeting would spawn other activities such as further researches which can be published by APO so that more people can learn from the results and the sharing of experiences.

The following are my recommended steps for the Philippine government:

1. Promote and encourage entrepreneurship among students and the citizens. Talks and educational sessions should be held to promote and encourage the development of an entrepreneurial spirit in our students and citizens. This should be made a staple part of the annual DTE SMED Week celebration. The DTI can also lead by example by encouraging their employees to develop and put up their own enterprises.

2. An SME Learning and Research Institute should be created to spearhead the sharing of strategic knowledge and information in the sector. A crucial component of this project would be the “completion” of the National Business Registry which DTI was contemplating on.

3. Business process simplification. Although there are numerous DTI-led efforts in this area, there still remains a lot of room for improvement.

4. As regards my organization, the Small Business Corporation, I would like to see how financing-related interventions as gleaned from the experiences of Malaysia, Thailand, South Korea and Taiwan can be adopted by the Corporation. Interestingly, one of the participants is from the SME Bank of Thailand, whose operations excepting for the deposit-taking function is very similar to that of the SB Corporation.

SUBMITTED BY:

EMERSON CUYO
Department Manager II
Small Business Guarantee and Finance Corporation

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