Background
Micro, small and medium enterprises (MSMEs) are important engines of growth in ASEAN economies.
ASEAN-Japan cooperation for MSME development is outlined in the Renewed ASEAN-Japan 10-Year Strategic Economic Cooperation Roadmap (2016-2025). Specifically in support of “Economic Integration of ASEAN,” ASEAN and Japan collaborate to increase MSME’s competitiveness in regional production networks through tailored programmes based on the ASEAN Strategic Action Plan for SME Development 2016-2025 (SAP SMED 2025).
Areas of Support and Key Contributions
Through the ASEAN Economic Minister – Minister of Economy, Trade and Industry (AEM-METI) Economic and Industrial Cooperation Committee (AMEICC), Japan supported ASEAN in developing the SAP SMED 2025 drawing on an assessment of the previous SAP SMED (SAP SMED 2015).
The followings are the areas of supported by the Japan-ASEAN Integration Fund (JAIF) based on the strategic goals of the ASEAN SAPs SMED as well as the key achievements of the JAIF projects conducted to date.
JAIF Flagship Project under MSMEs
Japan supports the development of MSMEs especially in the area of Entrepreneurship and Human Capital Development through tailored programmes for the ASEAN Member States based on SAP SMED 2025. One of them is the “ASEAN Mentorship for Entrepreneurs Network (AMEN).”
Virgilio Espeleta,
Kapatid Mentor Micro-Enterprise (KMME) Coordinator & Mentor of the Philippines Center for Entrepreneurship (PCE-Go Negosyo Fdn, Inc.)
© Virgilio Espeleta
Virgilio, who is an active mentor for the AMEN shared his experience. The AMEN project that trains mentors has a ripple effect, if one mentor trains 20 to 50 mentors in a lifetime, the cost-effectiveness of investing in mentors is significant. He has witnessed numerous positive impacts in his mentees’ lives, whom he came into contact through this project.
One of his mentees, a businesswoman who runs a semi-order women’s apparel shop in Cebu City, is now successfully expanding her branches in Manila. She herself has become a mentor for the AMEN, raising the next generation of mentees. In addition, another mentee who runs a restaurant business was hit hard by the COVID-19 pandemic. After switching to a community-based catering business combining his food menu with his wife’s homemade pastries, he successfully recovered his sales from $10 a day to $600 a day. The steady growth of these micro-businesses has resulted in supporting many households and beyond.
The number of MSMEs in the ASEAN region is enormous. In the 10 ASEAN countries, MSMEs account for more than 90% of all the entities in each country. The employment, sales, and investment generated by these MSMEs are immense. MSMEs are the key to bringing the country out of recession. Mentorship is an important tool for achieving ASEAN economic integration, and it must be sustained, he claims with enthusiasm. Read more on his story in Beneficiaries’ Voice.
ASEAN Mentorship for Entrepreneurs Network (AMEN) Phase 2 was recently concluded, the project successfully identified the focal point for the Public-Private Partnership for the establishment of the AMEN Mentorship Institute and capacitated 105 new mentors as well as at least 296 MSEs from the ASEAN Member States as mentees. In addition, another MSME project is currently on-going, namely Development of a Diagnostic Tool to Assess Micro, Small and Medium Enterprises’ (MSMEs) Digital Readiness. This project aims to provide a self-diagnostic platform for MSMEs to assess their digitalisation needs and gaps. The tool builds a framework or a mechanism for the provision of relevant information on digital skillsets and tools/solutions suitable for MSMEs, as well as appropriate business development supporting services.
Our Flagship Project
ASEAN MSMEs Enhance Export Capacities Through the Training Course
Over 90% of enterprises in ASEAN countries are micro, small and medium enterprises (MSMEs), accounting for 50% to 90% of employment in the region. MSMEs are important “engines of growth” in ASEAN economies, contributing up to 50% of GDP of ASEAN member states. 1 Although MSMEs contribute significantly to the ASEAN economy, at present, they are often subordinate at the lower layer of the supply chain as subcontractors to major overseas manufacturers. Therefore, the revenue MSMEs receive from overseas manufacturers is often only 20-30% of the product price. The lack of information, access to market, and technology of MSMEs have been the issues hindering development of MSMEs.
The project “ASEAN Training Courses to Build and Enhance Export Capacities for SMEs” consisted of workshop in Ho Chi Minh City, site visit to local MSME and publication of guidebook on export capacities for MSMEs in December 2017. Total of 85 participants attended from 10 AMSs. The project contributed to enhancing the export capabilities of ASEAN MSMEs and related associations, building network among the stakeholders and enabling MSMEs to access global economies.