Recent Development: An Overview

Abstract

Asian developing countries have touted SMEs as the engine of economic growth and development, the backbone of national economies, the greatest employment generator, a great potential source for export growth and development, especially in the manufacturing sector, a potential tool for poverty alleviation by creating self-employment avenues, and crucial support for LEs. In Southeast Asian countries alone (i.e. Indonesia, Malaysia, Thailand, Singapore, the Philippines, Brunei Darussalam, Lao PDR, Cambodia, Vietnam, and Myanmar), notwithstanding various definitional issues and data problems, the combined available sources suggest a (rough) estimated total of around 52 million SMEs, with Indonesia being the largest contributor. According to the Association of Southeast Asian Nations (ASEAN) Development Blueprint for SMEs 2004–14, these enterprises employ about 75–90 percent of the domestic workforce, especially adult men and women (Lim, 2008, p. 2). In countries like Indonesia, Thailand, Malaysia, and the Philippines, the enterprises play strategic roles in private sector development, especially in the aftermath of the 1997 Asian financial crisis. In some countries, as their economies modernize or industrialize, SMEs provide the much-needed interfirm linkages required to support LEs to ensure that they remain competitive in world markets. In this region as well as in East Asia (countries such as China and South Korea), the total number of SMEs account, on average, for more than 99 percent of total enterprises (Table 3.1).