SME Policy Index ASEAN 2024 Enabling Sustainable Growth and Digitalisation

SME Policy Index :ASEAN 2024 –Enabling SustainableGrowth andDigitalisation SME Policy Index : ASEAN 2024 – Enabling Sustainable Growth and Digitalisation © Economic Research Institute for ASEAN and East Asia and Organisation for Economic Cooperation andDevelopment All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted inany form by any means electronic or mechanical without prior written notice to and permission from ERIA. The findings, interpretations, conclusions, and views expressed in their respective chapters are entirely those ofthe author/s and do not necessarily reflect the views and policies of the Economic Research Institute for ASEANand East Asia, its Governing Board, Academic Advisory Council, or the institutions and governments they represent.Any error in content or citation in the respective chapters is the sole responsibility of the author/s. Material in this publication may be freely quoted or reprinted with proper acknowledgement. Please cite this publication as: ERIA/OECD (2024),SME Policy Index: ASEAN 2024 – Enabling Sustainable Growth and Digitalisation, Jakarta:ERIA/Paris: OECD. Cover Art by ArtmosphereBook Design by ArtmosphereNational Library of Indonesia Cataloguing-in-Publication DataISBN no. 978-602-5460-58-6 Preface Small and medium-sized enterprises (SMEs) constitute more than 99% of firms in the ASEAN region,playing a vital role in employment and inclusive economic growth. SMEs also drive technologicalinnovation and contribute significantly to the transition towards greener economies. Despite thenumerous challenges that SMEs have faced globally in recent years since the COVID-19 pandemic, theSME sector has become more resilient, digitally savvy, and better positioned to compete internationally.Access to finance for many SMEs has significantly improved, driven by the rapid rise of fintech solutions,with certain fintech-based financing recording triple-digit growth. The pandemic also accelerated theadoption of digital technologies, prompting SMEs to embrace e-commerce and digital payments. The SME Policy Index: ASEAN 2024 – Enabling Sustainable Growth and Digitalisationprovides acomprehensive analysis of small and medium-sized enterprises (SMEs) policies across the ten ASEANMember States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines,Singapore, Thailand, and Viet Nam), highlighting how countries have addressed recent economic andgeopolitical shocks. The report includes regional trends, country-specific analyses, and actionablerecommendations for both regional and national governments. The report finds that SME policies across ASEAN are continually advancing, driven by policymakers’efforts to ensure inclusive and sustainable economic growth. Policymakers have implemented measuresto address the challenges posed by crises such as rising inflation and supply chain disruptions,successfully enhancing the long-term competitiveness of SMEs. ASEAN Member States have promotedSME digitalisation through various capacity-building activities, digital trade promotion, and efforts toimprove access to digital payment systems and finance. The emphasis on upskilling has also increased,with programmes aimed at boosting digital, innovation, and business management skills for SME ownersand employees. The report urges governments to further strengthen SME support by adopting more coordinated policyapproaches and ensuring coherence across public institutions. ASEAN Member States should continueto deepen regional cooperation, particularly in enhancing access to finance and supporting projectsaimed at market access and internationalisation. Improving data collection, availability, comparability,and analysis, along with dedicating resources to policy monitoring and evaluation, will enable moreinformed decision-making. The report also calls for enhanced regional collaboration on SME greening,raising awareness amongst policymakers and SMEs about relevant tools, initiatives, and best practices. This third edition features an updated methodology that analyses SME digital transformation supportpolicies and presents the latest findings on SME development. Aligned with the objectives of the ASEANStrategic Action Plan for SME Development 2016–2025, it allows for an assessment of the plan’simplementation and serves as a crucial tool for encouraging domestic reforms that will enhance ASEANpolicy harmonisation. We are confident that it will be a valuable resource for assessing SME policiesacross ASEAN and informing the development of the post-2025 action plan for micro, small, and medium-sized enterprises (MSMEs). This study results from collaboration between the ASEAN Coordinating Committee on Micro, Small, andMedium Enterprises (ACCMSME) through the ASEAN Secretariat, the Economic Research Institute forASEAN and East Asia (ERIA), and the Organisation for Economic Co-operation and Development (OECD).It was