Summary and Conclusion

The importance of SMEs in the age of globalization, production networking, and regional economic integration is well documented and firmly established in the literature. The central question is why some countries have successfully transformed and established viable, competitive, and sustainable SMEs development while the majority of other developing countries have failed. The answer is complex and requiring of country-specific, sectoral level analysis as well as the examination of economic, political, social, and cultural elements in a dynamic context. However, some elements can be used as basic policy guidelines for developing SMEs.

Successful cases of SMEs development in Japan, Korea, Taipei,China, Hong Kong, China, Singapore, Thailand, Malaysia, India, and many other countries have adopted long-term comprehensive, coordinated and consistent policies. Often, empirical evidence shows that correct policy measures for SMEs in developing countries are not coordinated among relevant ministries, agencies, and organizations, which in the long run results in inconsistent policies. Therefore, governments and responsible agencies must develop “best practices” on the ideal business environment, training and upgrading, financing, marketing and management, sub-contracting, and networking and monitoring mechanisms to ensure that SME policies are efficiently and effectively carried out. Successful case studies invariably indicate that effective collaboration between government, trade associations, education, and training institutions is important in reducing cost for human resource development and capacity building.

Likewise, the dissemination of information through the effective use of available ICT should be maximally used. In this context, the establishment of national and regional corporate credit information and database and credit guarantee system in the region should be given high priority. The establishment of such database and credit information would contribute significantly to the problem of trade financing and other financing aspects of SMEs.

Globalization and regional integration require the healthy and sustainable existence of SMEs and their development in the region. The proliferation of bilateral and sub-regional FTAs has created duplication and overlapping of RoOs and other trade and investment rules and regulations that would increase the transaction cost of doing business in the region, affecting SMEs adversely. It is necessary to create a conducive business environment through the provision of standardization of products and services, rules and regulations and a seamless market infrastructure in the region.

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