Govts urged to help SMEs through downturn

KUALA LUMPUR--Asia-Pacific Economic Cooperation (APEC) governments have been urged to reserve a percentage of government procurement in ICT for small and medium enterprises (SMEs), to enable them to ride out the effects of the global economic crisis.

Ira Kasoff, U.S. deputy assistant secretary of commerce for Asia, said some 200 participants of the APEC SME Technology Entrepreneur Seminar, held here last week, also recommended that APEC economies increase capital investment and lending to ICT SMEs, adopt technology-neutral standards and strengthen protection of intellectual property rights.

"The conclusion from this seminar is that SMEs play a strong role in technology innovation. As they are disproportionately affected by the current economic downturn, programs and policies are needed for SMEs to bounce back and meaningfully participate as drivers of investment and employment to contribute to the growth and prospects of APEC member economies," said Kasoff, who acted as a facilitator for one of the panel sessions at the seminar.

The event was organized by the International Trade Administration, US Department of Commerce and Malaysia's Small and Medium Industries Development Corporation (SMIDEC).

Kasoff listed the nine recommendations adopted by the seminar which included participants from half of APEC's 21 member countries:

1. Capture the needs of small businesses in intellectual property rights and enforcement;
2. Adopt technology-neutral standards;
3. Increase capital investment and lending to SMEs in the ICT sector;
4. Help universities and other educational institutions provide SMEs with research and development tools and activities;
5. Provide incentives for industry and training institutions to retrain and certify workers from other industries;
6. Create more job opportunities for graduates and displaced experienced professionals;
7. Reserve a percentage of government procurement in ICT for SMEs;
8. Look to SMEs to adopt, design, manufacture, install, maintain and monitor green ICT technologies; and
9. Encourage ICT companies to practice corporate social responsibility by partnering with SMEs.

Kasoff said the recommendations would be recorded for the APEC SME Working Group meeting in Taipei from Jun. 10 to 12 and APEC ministers meeting in Singapore in October.

"Companies need to be planning longer term beyond the current economic downturn, and continue to invest in IT and position themselves to be competitive in the future as the economy recovers," said Kasoff in a press conference at the conclusion of the seminar last Friday.

On the call to governments to adopt technology-neutral standards, Kasoff said: "We are encouraging governments to be technology neutral, not to favor one particular technology over another because sometimes that can be an indirect way of favoring one company against another."

"The idea is to focus on functionality rather than specifying this technology or that technology," he added.

Government procurement
Given that governments are among the biggest spenders on ICT in many APEC countries, it was not surprising that participants were united in urging governments to reserve a percentage of government ICT procurement for SMEs.

SMIDEC said the Malaysian government had already adopted such a policy. Hafsah Hashim, its chief executive officer, said at the same press briefing: "In Malaysia, a percentage of government procurement is already reserved for SMEs."

She said the percentage was in the "double digits" and said the association would look at recommending that the Malaysian government raise the figure.

In Australia, government agencies are to include a minimum target level for SME participation ranging between 10 percent and 20 percent of the contract value for ICT contracts of US$20 million and above.

Meanwhile, Choo Hua Wee, director of corporate affairs, Microsoft Singapore, said customers want choice, and choice equates to innovation and competition.

"Policies that enable choice are those that are neutral and that do not artificially favor a business or licensing model over another," Choo said during his presentation at the conference.

He also said that multiple standards could co-exist and it was up to customers to decide which standards best meet their needs.

Pang Yee Beng, managing director for Indonesia, Malaysia and Singapore at Dell, Asia Pacific, said more than 500 million new businesses will set up shop over next five years,. He said that most of these new SMEs will come from fast-growing economies such as the BRIC (Brazil, Russia, India and China) countries. He added that a third of the global SMEs are located in Asia-Pacific.

An IT trend among SMEs, Pang said, is that most of such businesses want to invest in ICT but budget constraints limit new investment. They also prefer self-maintaining systems and online tools to help manage IT costs, he added.

"Providing technology to small business is not about price alone, but providing the right technology at the right price. SMEs in emerging markets seek affordable business computing and connectivity, without added features that raise cost and don't drive additional productivity," said Pang in his presentation at the seminar.

Most critically, SMEs also seek technology partners who handle the technicalities so the technology is "an asset and not a burden", he added.

Lee Min Keong is a freelance IT writer based in Malaysia.