Small and medium-sized enterprises (SMEs) are important contributors to employment and inclusive economic growth around the globe, including in Southeast Asia. As one of the fastest-growing regions in the world, Southeast Asia has broadly embraced a growth model based on international trade, foreign investment, and integration with regional and global value chains. This approach opens up an important window of opportunity for SMEs, but it also means that SMEs’ competitiveness should be increased to survive and grow in a highly competitive marketplace. With the creation of the ASEAN Economic Community (AEC) in 2015 and the adoption of the broader inclusive development goals of the 2030 Agenda, policymakers in the region are progressively turning to SME development as a way to foster equitable economic growth and narrow substantial income gaps within ASEAN Member States.
The ASEAN SME Policy Index of the Organisation for Economic Cooperation and Development (OECD) is a benchmarking tool for emerging economies. This instrument helps countries to monitor and evaluate progress in policies that support small and medium-sized enterprises (SMEs). It also sheds light on the policy landscape and legal framework for SME development in ASEAN. Furthermore, the ASEAN SME Policy Index identifies potential gaps and offers recommendations for policymakers, donors, and governments in ASEAN member states. The comprehensive SME Policy Index includes a set of qualitative and quantitative indicators assessing the scope of support measures for SMEs in eight subject areas. The main objective of the SME Policy Index is to provide a framework for government and policymakers to assess policies targeting SME development. The Index identifies strengths and weaknesses in policy design and its implementation. The instrument allows for comparison across countries and measures convergence towards EU SME policy standards and aims to support governments in setting targets on SME policy developments and strategic priorities to further improve the business environment. The SME Policy Index shall promote the public and private engagement in policy dialogue as well as exchanging knowledge/experience within the region.
The index integrates the goals of the ASEAN Strategic Action Plan for SME Development (SAP SMED) 2016-2025 and is in line with the goals of the ASEAN Economic Community (AEC) Blueprint 2025. The assessment will be conducted by the OECD and the Economic Research Institute for ASEAN and East Asia (ERIA) in close collaboration with the ASEAN Coordinating Committee for Micro, Small and Medium-sized Enterprises (ACCMSME), as well as policymakers, local subject matter experts, and the private sector at both the regional and country levels.
The ASEAN SME Policy Index (2023 – 2027) in cooperation between OECD and ERIA has the overall objective to guide policymakers in ten ASEAN member states (AMS) in setting targets for SME policy development and in identifying strategic priorities to further improve the ASEAN business environment.
The project activities consist of:
Carrying out a comprehensive study on the status of implementation of SME policies in ASEAN member countries
Creation of the ASEAN SME Policy Index in cooperation with the ASEAN Secretariat, OECD, and ERIA, as a permanent basis for political decision-making for the ten AMS for the next five years;
Publication of the ASEAN SME Policy Index at a regional policy event
Organising and facilitating regional policy dialogues within the SME environment in ASEAN through the platform ASEAN Access
The policy assessment in the SME Policy Index is conducted by an independent research team from each AMS through a questionnaire survey and in-depth interviews. The assessment draws on inputs from government agencies, the private sector, and other SME stakeholders. The results of the assessment from each country are put together for consultations with government agencies, compared and discussed in a workshop for refinement. The results are then internally reviewed by a panel of experts from the OECD and ERIA to ensure their consistency between countries and across the region. The process of coming up with the SME Policy Index is therefore participatory in nature and offers a fair evaluation of policy implementation through an independent and peer-review process. The method of measuring policy implementation by employing the indicators offers flexibility for a country to choose policies that suit the national situation well. This flexibility also means that the SME Policy Index is adaptable to different policy processes and institutional settings, given the wide difference in the development and political settings of the AMSs.
The implementation of this measure will be done in coordination with the project ‘Strengthening Regional Structures for SME Promotion in ASEAN’ (ASEAN SME), in cooperation with members of the ACCMSME Working Group and network partners of the ASEAN SME Web Portal “ASEAN Access”. The measure shall be coordinated through personnel of the ASEAN SME project based in Thailand and Indonesia.
The German Federal Ministry of Economic Cooperation and Development (BMZ)
Regional stakeholders include the ASEAN Secretariat, the ACCMSME Working Group, and the ASEAN Economic Ministers (AEM) Working Group. National level stakeholders include local authorities, regulators, and government agencies responsible for SME promotion and development in each of the ten AMS. Business membership organisations, associations, and federations are also considered players in this environment, as they also play a key role in SME promotion. The core beneficiaries are SMEs in ASEAN.