Bangkok--10 May--Ogilvy Public Relations Worldwide
SMEs Are Bullish on Asia’s Prospects But Are Concerned About Obstacles to Growth
With intra-Asia trade flourishing and Asia’s emerging markets gaining a stronger foothold in the global economy, Asia’s Small and Medium Enterprises (SMEs) are bullish on the region’s prospects. However, according to findings of the second annual UPS Asia Business Monitor (UPS ABM II), the region’s long-term sustainability is threatened by the lack of innovation, availability of qualified staff, and access to funding and working capital.
The UPS ABM II is a survey of more than 1,200 SME leaders in Asia on competitive issues. The study found that nearly half the respondents expect to see improvements in their business prospects with the majority intending to maintain or grow the size of its workforce in 2006. In Thailand, 66% of Thai SMEs expect to see improvements in their business at the end of 2006 with 64% expecting to grow the size of their workforce. SMEs also remain bullish on Asia’s economy, with 70% expecting to see growth in intra-Asia trade and 71% expecting Asia’s economic power to continue growing this year.
“The UPS ABM II is designed to give SMEs and local governments in Asia a better understanding of the competitive issues facing SMEs,” said Halim Selamat, Managing Director of UPS Thailand. “With intra-Asia trade thriving and major markets such as India and China becoming the world’s greatest economic powers, SMEs have tremendous opportunities to grow. UPS is well-positioned to help SMEs become more competitive through a wide range of supply chain solutions from package delivery to financial solutions.”
The survey uncovered obstacles affecting the region’s ability to maintain sustainable growth. SME leaders in most markets believe that ‘hardware’ such as transportation infrastructure and IT adoption is available. However, they report that the biggest obstacles to SME competitiveness are the lack of ‘software’ such as qualified staff, innovation, and funding and capital. For Thai SMEs, almost all factors given to respondents were found to be highly important to their competitiveness, but largely lacking. The most significantly lacking was found to be Access to overseas market and the lack of qualified staff.
Respondents also cited barriers in developing countries such as China, Indonesia, Thailand and the Philippines including legal framework, supply-chain efficiency, access to overseas markets, and access to market intelligence and other business information. Government support is also a concern in many markets.
The UPS ABM II also examines the views and opinions of SME leaders on other concerns such as the importance of different industries to their local economies, SME competitiveness between markets, China’s impact on the region as well as current macroeconomic issues. Top-line highlights revealed by the UPS ABM II include:
1. Most markets agree on the top four most important industries to local economies, with IT&T leading in the region. Thai SME leaders are in agreement with their counterparts in the region in terms of the industry sector that they consider important. Utilities & Energy sector led in Thailand followed by IT&T and Financial Services.
2. China continues to lead in competitiveness rankings but India is also on the rise. 90% of Thai SME leaders said China SMEs are more competitive than local SMEs.
3. The top three business issues that keep SME leaders up at night are cash flow & funding; government regulations; and the availability of qualified staff.
4. SMEs across Asia are dissatisfied with their credit and financing providers, especially in Korea. 43% of Thai SMEs said that they have credit or financing needs on an on-going basis and thought that their credit or finance provider understands their needs (58%) though only 47 percent thought that the service providers have the products and services they needed.
5. Asian SMEs continue to expand into China, with business presence rising from 22% in 2004 to 31% in 2005. Presence of Thai SMEs in China has increased by 11% since 2004.
6. Given the rapid development of logistics infrastructure and management capabilities in China, Hong Kong’s SMEs believe the city is losing its edge as the regional logistics and transportation hub.
7. SMEs in India believe the country’s economic growth will not surpass China’s but may match its growth in the next three years.
UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the flow of goods, information and funds. Headquartered in Atlanta, USA, UPS serves more than 200 countries and territories worldwide. UPS’s stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at www.ups.com .
Issued on behalf of : UPS Thailand
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