On September 5, 2014, the 21st APEC SME Ministers was held in Nanjing, China under the theme “Innovation and Sustainability”. The Ministers exchanged views and shared experience to increase innovation capacities of SMEs, improve the policy environment for SMEs’ innovation and promote SMEs’ growth through innovation. The Ministers endorsed the Joint Ministerial Statement and the Nanjing Declaration on Promoting SME Innovative Development. Prior to the Ministerial Meeting, the 39th SMEWG Meeting was held in Nanjing, China on September 3 – 4, 2014 to review the Group’s activities and discussed emerging issues.
In 2014, the SME Working Group implemented 13 on-going projects which involved 18 organized events (Policy Dialogue, Workshops, Seminars, Training courses etc.), with the participation of hundreds of trainers, government officials and SMEs. Reports, papers, databases and other deliverables have been made available to benefit people of the APEC region and beyond.
Selected projects are highlighted below.
1. Building Management Capability, Entrepreneurship, and Innovation
APEC Start-up Accelerator Initiative
Launched in early 2013, this medium-term project has significantly contributed to the development of start-ups in the APEC regions. During its first year, the Start-Up Accelerator Leadership Summit and the first APEC Challenge were organized in Chinese Taipei in August 2013. The APEC Accelerator Network (AAN) Forum was established in March 2014 and has 44 members from 14 APEC economies. The Forum offers mentoring and training sessions with well-known speakers providing start-ups valuable advice and understanding of global business trends. Moreover, the annual APEC Challenge helps start-ups increase their visibility and secure funding. As a result, a number of start-ups received venture capital funding or were acquired by big companies, for instance Gogolook was acquired at USD 18 million by Naver, the Korea technology giant. At the APEC Challenge 2014 held in August, four startups received the Awards for Online Popularity, People’s Choice, Women Entrepreneur and Teamwork. ServTech, one of the six winning startups of the first-round APEC Challenge, was invited to participate in the second-round Intel Global Challenge in Silicon Valley where it won the first place Innovator Award. See recent APEC feature article for more information on the startups who received accolades at the APEC Accelerator Network and the Intel Global Challenge. In addition, an Accelerator Network Directory will be published by early 2015.
In 2015, the APEC Accelerator Network will continue its meaningful work focusing on early-stage investment. Major activities include the 2nd APEC Accelerator Network Summit to be organized in August 2015 and the APEC Challenge 2015 to be organized in Chinese Taipei in October 2015.
APEC Start-up Conferences
Since its launch in 2011, three conferences have been held annually since 2012. The latest conference “Global thinking to make Global Business” was organized in Lima, Peru on October 28 – 20, 2014 with over 400 participants attending. During the first half-day open conference, international keynote speakers shared their valuable and encouraging experiences and views on entrepreneurship, as well as the required attitude and skills for entrepreneurs who wish to start a global-market-oriented business. In a separate session, start-ups from Indonesia, Mexico, Peru, the Philippines and Viet Nam shared their initiatives in various industries, including information communications technology, manufacturing, nanotechnology and 3D printed handicrafts. There was also a session dedicated for global corporations to present their programs for start-ups and entrepreneurs. Participants also visited Wayra Peru, a Telefónica's startup accelerator that helps entrepreneurs grow and build successful businesses, and Starscamp, a business incubator founded by three professional women which promotes entrepreneurial projects, including social and environmental projects.
Improving Natural Disaster Resilience of APEC SMEs to Facilitate Trade and Investment
The goal of the project is to help SMEs better prepare for natural disasters through business continuity planning. Key deliverables of the project so far included the Guidebook on Promoting SMEs’ Business Continuity Planning (BCP), a 10-step model to help businesses develop their own business continuity plans. The Guidebook was translated into six languages, enabling accessibility for 40% of the world’s population. The Train-the-Trainer Workshops to promote the BCP Guidebook were customized and conducted in five APEC economies, benefiting local small and medium-sized busineses. The High-level Policy Dialogue on Resilient SMEs for Better Global Supply Chain, jointly held by the APEC SMEWG and EPWG, provided another important avenue to raise awareness of business continuity planning as well as to promote regional cooperation in this area. For more information on the outcomes and benefits of the SME disaster resilience project, see recent APEC feature article.
Promoting Women Entrepreneurship and Green Business
In addition, SMEWG has implemented activities that promote women entrepreneurship such as the Workshop on the Dynamics of SME: Informality and Women Entrepreneurship, Workshop on Promotion of New Business by Women’s One Village One Product, and Train-the-Trainer Course for Women SME Service Exporters. Innovative and green business is another focus of the Working Group. Projects conducted include: Establishing the Green Technology Innovation Network to Support SME Development, APEC Carbon Labelling Workshop, APEC Green Business Forum and Promoting Innovation Seminar: How Smart Intellectual Property Rights Policies Can Encourage SMME’s Research and Development.
Addressing Impediments for Small and Medium Sized Enterprises (SMEs) and Micro Enterprises (MEs) to Access Trade Finance
The dialogue exchanged information on impediments that SMEs and micro-enterprises encounter in accessing trade finance to better integrate into regional and international markets; and developed a set of recommendations, as a reference tool for APEC member economies and SMEWG, to tackle those impediments. The dialogue concluded that there are market gaps for trade finance that hinder greater trade, economic growth and job creation. The market gaps may be caused by low country ratings, weak banks, anti-money laundering/“Know your clients” requirements, Basel guidelines/de-leverage etc. Speakers and participants discussed measures to reduce the market gaps, including multilateral development bank programs, new initiatives such supply chain finance. However, it is commonly shared that more action is needed to close the gaps to create more growth and jobs. Full summary report of this project could be found here. The SMEWG is further developing initiatives to help close these gaps.
Identifying Government Policies that Promote Venture Capital Investment in APEC Economies
The project’s objective is to improve access venture capital financing for innovative APEC SMEs by building better understanding of issues and challenges facing APEC economies in growing their domestic and international venture capital presence. A set of policy recommendations was devised and to be enacted APEC-wide, with a focus on encouraging venture capital market growth in latecomer economies. The final report of the workshop is available here.
3. Business Environment, Market Access and Internationalization
Promoting Business Ethics for SMEs in the Medical Devices, Construction and Bio-Pharmaceutical Sectors
Ethical business practices are key to regulate the close interaction between the industry and healthcare professionals, often resulting in conflicts of interest. Moreover, unethical practices affect patient care and costs. Since 2011, the multi-year project on SME Business Ethics Capacity Building for SMEs in the Medical Devices, Construction and Bio-Pharmaceutical Sectors has developed codes of ethics for the three sectors and established one of the largest ethics mentor networks in the Asia-Pacific region.
Beginning in 2011, the project has helped small and medium enterprises in the biopharmaceutical and medical device industries develop codes of ethics to self-regulate their business practices. Today, as a result of the APEC initiative, codes of ethics have been adopted and are undergoing implementation by around 60 biopharmaceutical and medical device industry associations and their member companies from 19 economies across the Asia-Pacific, representing more than 14,000 firms. For more information on APEC’s accomplishment to develop business ethics for medical device and pharmaceutical SMEs, see recent APEC feature article.
In addition, in September 2014, the construction engineering sector developed "The Manila Declaration for the Engineering and Construction Sector" which articulates a variety of ways that governments can support the advancement of ethical practices in this sector. In 2015, an Expert Working Group will review the Manila Declaration with a view to ensuring the recommendations adhere to existing multi-lateral, regional or bilateral binding trade agreements. The biopharmaceutical sector is also in the process of forming an ad hoc working group to advance the adoption of codes of ethics and support the sector’s trainer network.
APEC Business Ethics for SMEs Forum Series
APEC SMEWG is also implementing the APEC Business Ethics for SMEs Forum series, in which the first meeting was organized under theme “Building the Ethics Capacity of SMEs”. The project’s objectives were to facilitate regional cooperation that strengthens ethical business practices, with an emphasis on SMEs, by delivering capacity building and sharing best practices; providing a platform to address new and emerging business ethics challenges; and promoting on-going dialogue about the roles of all stakeholders in ensuring an ethical business environment. The forum included sector-specific training sessions and a high-level plenary session. It also prepared and submitted to the SME Ministers the “Nanjing Declaration to Promote Ethical Business Environments in the Medical Device and Biopharmaceutical Sectors”, which sets initiative priorities through 2020.
The 2nd Business Ethics Forum is planned for August 19 – 20, 2015 in Manila, Philippines. The forum will include two capacity building workshops and plenary sessions for medical devices – biopharmaceutical sector and for construction – engineering sector. These efforts will advance implementation of the Nanjing Declaration and Manila Declaration.
Facilitating SMEs Integration into Global Value Chains
This workshop is the first in a series to promote viable and cost-effective solutions to help facilitate the integration of small and medium-sized companies into Global Value Chains (GVCs), particularly through leveraging SME relationships with multinational corporations. The first workshop in March 2014 identified multinational corporation (MNC) buyer obligations that translate across the supply chain to SMEs, the obligations SMEs contracted by an MNC must meet, and what type of guidance and assistance MNCs provide to their SME suppliers in terms of meeting various contract requirements and financing. Subsequently, a framework was developed which will serve as a basis for addressing some of the key challenges for SMEs through further technical assistance and capacity building on this topic. In response to an APEC Policy Support Unit report on Integrating SMEs into Global Value Chains: Policy Principles and Best Practices, this project is part of the next steps to identify the challenges for SMEs integrating into global value chains and to develop cost-effective solutions.
Directory of APEC Economy Initiatives to Assist SMEs’ access to Global Markets
The project, led by Australia, created Directory of APEC Economy Initiatives currently in place to assist SMEs’ access global markets. SMEs participation in global markets can be either as direct exporters of goods and services or as part of a global supply chain.
Development of an Integrated Information Tool to Stimulate Involvement of SMEs of the Asian-Pacific Region into the Global Trade System,
Two studies has been produced on the development of an online integrated information system for SMEs on access to international markets, and on Russian SME needs and demands. In 2015, the project will present an integrated information tool to stimulate involvement of SMEs into the global supply chains and global trade.
The 40th APEC SMEWG Meeting will be held in Atlanta, Georgia, the United States, (June 10 – 11, 2015) and the 41st Meeting will be in Iloilo, the Philippines (September 22 – 23, 2015).
The 22nd APEC SME Ministerial Meeting will be held in Iloilo City, the Philippines on September 25, 2015.
An Integrated Plan of Action for SME Development (SPAN) was developed and endorsed by APEC SME ministers in 1998. The SPAN serves as a set of broad guidelines for SME development in individual economies. It also provides a reference point for review of both individual and collaborative initiatives, programs and regulatory frameworks.
To help SMEs embrace the culture of innovation and maximize the benefits of technology, the Daegu Initiative was launched in 2005. The initiative runs in five year cycles with the objective of improving the economic and policy environments of all member economies to make them more conducive for SME innovation.
The first cycle (2006 - 2010) focus on six areas:
- Developing human resources and technology through linkages between industry and educational and research institutions;
- Accessing to specialist assistance and advice;
- Enhancing availability of capital to innovative SMEs;
- Networking and clustering for innovative SMEs;
- Establishing appropriate legal and regulatory structures; and
- Establishing a market consistent economic environment.
Under this initiative, an APEC SME Innovation Centre has been established in Korea to offer consulting services to small businesses and provide opportunities for economies to share innovation policy experiences.
The Green Initiative is the second cycle of the Daegu Initiative. As part of this initiative, the APEC SME Green Innovation Conference was held in April 2011 in Seoul, Korea that brought together government officials from SME-related and energy ministries and business representatives from innovative SMEs to share ideas and forge greater cooperation.
Since 2011, APEC has helped develop SME business ethics for the medical device and biopharmaceutical sectors. Today, as a result of the APEC initiative, codes of ethics have been adopted and are undergoing implementation by around 60 biopharmaceutical and medical device industry associations and their member companies from 19 economies across the Asia-Pacific, representing more than 14,000 firms. See more on APEC’s achievement in recent APEC feature success story.
The APEC Accelerator Network initiative was launched in 2013 to help Asia-Pacific startups gain access to venture capital funding and business mentoring. In 2014, the APEC Accelerator Network selected six startups from the region to participate in the Intel Global Challenge and the Siemens New Venture Forum in Silicon Valley USA, where they received awards and venture capital funding. See more in a recent APEC feature success story.
In September 2014, the 21st Small and Medium Enterprises Ministerial Meeting (SMEMM) was held in Nanjing, China under the theme “Innovation and Sustainability”. At the meeting, Ministers:
- Approved the Nanjing Declaration on Promoting SME Innovative Development and urged member economies to further facilitate innovative financing for SMEs, lower barriers to market access, and reduce the regulatory barriers facing SMEs.
- Acknowledged the APEC High Level Policy Dialogue Joint Statement on Resilient SMEs for Better Global Supply Chains.
- Recognized the APEC Accelerator Network (AAN) for Early-Stage Investment as a cross-border incubation platform for innovative and high growth SMEs, contributing to the formation of a conducive start-up ecosystem in the APEC region.
- Reiterated the importance of strengthening ethical business practices for APEC SMEs in the supply chain. Ministers congratulated the successful conclusion of the Business Ethics for APEC SMEs Initiative and encouraged the annual convening of the APEC Business Ethics for SMEs Forum. Ministers endorsed the “Nanjing Declaration to Promote Ethical Business Environments in the Medical Device and Biopharmaceutical Sectors (2014-2020)” and supported further implementation of the APEC Principles for the Construction and Engineering Sectors.
- Supported the development of e-commerce platforms and SME interconnection to facilitate SME market access and internationalization.
- Encouraged capacity building programs regarding the application of big data and open data.
- Encouraged technological exchange and cooperation and requested SMEWG to develop a database of SME coachers who are retired business leaders and entrepreneurs.
- Recognized standards and conformance as one of the priorities of the SMEWG from 2015.
- Recognized the wide inclusion of the private sector, APEC fora, ABAC, and other organizations, such as the United Nations International Strategy for Disaster Reduction (UNISDR), as appropriate, in SMEWG activities.
John M. ANDERSEN (Mr)
Principal Deputy Assistant Secretary for Global Markets
International Trade Administration
Department of Commerce United States
Tel: +202 482-5341
Fax: +202 482-5444
Phuong HA (Ms)