Workshop: SMEs in Developing Asia: New Approaches to Overcoming Market Failures

Event | 19 - 20 November 2015
ADBI, Tokyo, Japan

Post-event statement

How to increase credit access, improve innovation, upgrade workforce skills, and engage in global value chains, were some of the issues addressed in this workshop. Key conclusions included the need to set an appropriate loan share covered by a credit guarantee, and that governments should think beyond just facilitating credit access as the means to developing a vibrant SME sector. Experts and government officials from more than 15 countries attended the event which was co-hosted with Japan's SME Agency, the JICA Research Institute, and the Credit Risk Database Association of Japan.

Purpose

This event will enable the sharing of presentations among scholars on their research into the problems SMEs face in Asia. These papers will form part of a future ADBI book publication on the same topic. It will also facilitate an information exchange and build the capacity of government officials on SME policymaking.

Background

Economic growth and employment creation are driven by a thick and vibrant spectrum of productive enterprises. While large enterprises are important, they are greatly outnumbered by the multitude of small and medium-sized enterprises (SMEs), and micro enterprises that dot the urban and rural landscape. In most Asian economies, depending on definitions, SMEs, including microenterprises, account for over 95% of all business units, about 50% to 80% of employment and over 30% of gross domestic product.

Policymakers in Asia recognize the economic contribution of SMEs and the barriers they face. This has led to the development of a variety of SME support policies and programs in finance and other areas. Intervening in markets and assisting private sector players is fraught with difficulty, however. Programs may discriminate between firms, thereby giving unfair advantage to those that are able to secure government support. SME programs can also distort incentives, affecting the entrepreneurship that should be driving SMEs, creating a dependence on public funding. Finally, government support comes at a cost to the public treasury and any cost would need to be justified by the benefits generated. For these reasons, SME policy should offer market-driven solutions that work with and encourage private sector initiative.

Objectives

  • Map the importance of SMEs in supporting inclusive growth, private sector development and a deepening of the middle class in Asia.
  • Analyze the specific market failures that confront SMEs in terms of accessing finance, adopting technology, hiring and training workers, breaking into domestic and overseas markets, and other aspects.
  • Review government policies and programs that have been implemented to overcome these market failures.
  • Generate recommendations, based on evidence, which policymakers would find useful in creating a vibrant SME sector.
  • Conduct a workshop, produce publications and disseminate the findings of the study activity.

Output

  • Deepen the understanding of SME market failures and how they can be overcome through public policy.
  • Papers that will be used in the production of an ADBI book.
  • Create a network of colleagues from different countries to share ideas on the topic.
  • Creation of presentation materials which will be made available through the ADBI website.

Participants

Senior and mid-level officials from central banks and agencies responsible for SME development, SME finance, and other SME development areas. Approximately 35 participants from 13 ADB countries will be attending.

Participant responsibilities

Active participation in discussions, share views and experiences, engage in networking, and collaborate to strategize new approaches and understandings.

How to register

By invitation only.

Language

English

Partners

Ministry of Economy, Trade, and Industry; Japan International Cooperation Agency Research Institute, Credit Risk Database Association

Time of event

09:30 – 17:30