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Southeast Asia Going Digital CONNECTING SMES Southeast Asia Going Digital CONNECTING SME s Southeast Asia Going Digital Connecting SMEs PUBE This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the OECD member countries. This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2019), Southeast Asia Going Digital: Connecting SMEs, OECD, Paris, www.oecd.org/going-digital/southeast-asia-connecting-SMEs.pdf. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Photo credits: Cover © Adobe Stock. Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm. © OECD 2019 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie. FOREWORD | 3 Foreword The digital transformation opens a range of opportunities for small and medium-sized enterprises (SMEs). It can encourage product and service innovation, improve their market intelligence, ease their access to talent, facilitate access to financing, and ultimately enhance their competitiveness in local and global markets. SMEs play a vital role in Southeast Asia (SEA) through their contribution to employment and inclusive growth. However, SMEs face significant barriers related to access and use of digital technologies that prevent them from achieving their full potential. They are lagging behind in the digital transition. For SMEs to go digital, a coherent approach is required. This includes initiatives to deploy infrastructure and promote effective adoption of digital services and application, as well as to foster innovation. With this in mind, the Organisation for Economic Co-operation and Development (OECD), working with countries and stakeholders in the region and leveraging its cross-cutting Going Digital initiative on digital transformation, developed this report, Southeast Asia Going Digital: Connecting SMEs. The report examines opportunities related to the access to and use of digital services by SMEs in SEA, and aims to provide sound policy analysis to foster an enabling environment for the digital transformation to flourish. Most importantly, this report is designed to share good practices in the region that harness broadband-based services for increased productivity and social welfare and, ultimately, to promote regional integration. The report was drafted by Lorrayne Porciuncula, Alexia González Fanfalone, Yuki Yokomori, Miki Naito and Jaeho Lee, from the OECD Secretariat, under the supervision of Sam Paltridge and Verena Weber, heading the Communication Infrastructures and Services Policy Unit within the Digital Economy Policy Division (DEP). The report was developed under the overall leadership of Andrew Wyckoff, Director of Science, Technology and Innovation (STI); Dirk Pilat, Deputy Director of STI; and Anne Carblanc, Head of DEP. Frédéric Bourassa from the OECD Secretariat provided statistical support. Editorial and formatting work was undertaken by independent contractor Susan Sachs and Angela Gosmann from STI. Thanks also go to OECD’s Global Relations Secretariat for broader support in engaging with SEA, in particular Max Bulakovskiy and Annie Norfolk Beadle. Findings and recommendations were presented at the Policy Dialogue on Transforming SMEs in Southeast Asia, organised in partnership with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), on 31 October and 1 November 2018 in Bangkok (Thailand), and at the 10th Regional Policy Network (RPN) on SMEs organised with ASEAN Coordinating Committee for Micro, Small and Medium Enterprises (ACCMSME) on 6 November 2018 in Nay Pyi Taw (Myanmar). The report benefited from comments received during and after the 2018 Policy Dialogue on Transforming SMEs in Southeast Asia from: Zolrimi Muhaimin, Manager of International Research and Cooperation, Darussalam Enterprise (Brunei Darussalam); Kean Sochenda, Chief of Commercial Law Bureau in the Department of Legal Affairs, Ministry of Commerce, and Samnang Sou, Vice Chief of Regulatory Office in the SMEs Department, Ministry of Industry & Handicraft (Cambodia); Riska Pujiati, Directorate of ASEAN Negotiation, Ministry of Trade, and Fiter Beresman Silaen, Head of Program and Planning Sub-division, Ministry of Cooperatives and SMEs; Khemdeth Sihavong, Deputy Director General of the Department SOUTHEAST ASIA GOING DIGITAL: CONNECTING SMEs © OECD 2019 4 | FOREWORD of Foreign Trade Policy, Ministry of Industry and Commerce, and Sengphachanh Simangkhala, Director of Policy Research Division, Department of SME Promotion, Ministry of Industry and Commerce (Lao People's Democratic Republic); Nurezali Osman, Head of National eCommerce Strategic Roadmap, Malaysia Digital Economy Corporation, and Mohamed Aminuddin, Senior Manager, SME Corp. (Malaysia); Yee Yee Mon, Assistant Director in the Information Technology Division, Department of Trade, Ministry of Commerce, and Mu Mu Aye, Deputy Director of the Directorate of Industrial Supervision and Inspection, Ministry of Industry (Myanmar); Ma Carissa Sapera and Amara Zarah Amper, Department of Trade and Industry, Ministry of Commerce (Philippines); Yang Xinrong, Manager, International, Info-communications Media Development Authority (Singapore); Ekapong Rimcharone, Executive Director of the National Digital Economy and Society Commission; Pathomdanai Ponjan and Danaiwit Charusamorn, from the Ministry of Digital Economy and Society (Thailand); Nguyen Thi Bich Thuy, Deputy Director of the SME Development Division, Agency for Enterprise Development, Ministry of Planning and Investment, and Le The Phuc, International Affairs Division, E-commerce and Digital Economy Agency, Ministry of Industry and Trade (Viet Nam). The contributions from UNESCAP, through Mia Mikic, Director of the Trade, Investment and Innovation Division, Tengfei Wang, Economic Affairs Officer at the Trade, Investment and Innovation Division, and Atsuko Okuda, Chief of the ICT and Development Section, were also highly appreciated. Southeast Asia Going Digital: Connecting SMEs would not have been possible without the financial support of the Government of Canada provided through the Canada-OECD Project for ASEAN SMEs (COPAS). COPAS strives to develop competitive, resilient and innovative SMEs in countries of the Association of Southeast Asian Nations and thereby to contribute to sustainable and inclusive development in the region. SOUTHEAST ASIA GOING DIGITAL: CONNECTING SMEs © OECD 2019 TABLE OF CONTENTS | 5 Table of contents Foreword ................................................................................................................................................ 3 Acronyms, abbreviations and units of measure .................................................................................. 9 Executive summary ............................................................................................................................. 11 Key areas for policy action ................................................................................................................ 11 1. Making the digital transformation work for entrepreneurs in Southeast Asia ........................ 15 The SEA region ................................................................................................................................. 17 Gross domestic product and education levels ................................................................................ 18 Access to infrastructure .................................................................................................................. 20 Communication infrastructure ........................................................................................................ 22 Notes .................................................................................................................................................. 25 References .......................................................................................................................................... 25 2. Enhancing connectivity in Southeast Asia..................................................................................... 29 Connectivity in SEA .......................................................................................................................... 30 Digital divides among SMEs .........................................................................................................
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