Entrepreneur and Small Business Management.

Running head: ENTREPRENEUR AND SMALL BUSINESS MANAGEMENT
Role of SMEs in the development of South East Asian Economies
Name of the Student:
Name of the University:
Author note:

1
ENTREPRENEUR AND SMALL BUSINESS MANAGEMENT
Introduction
Small and medium-sized enterprises (SMEs) are integral part of the Southeast Asian
economies. As highlighted by ASEAN (2018), the SMEs can be considered as the backbone of
the economies in the Southeast Asia by contributing significantly in job creation, income
generation and creating opportunities for inclusive economic growth and prosperities for the
communities. This paper provides a synopsis of the role of the SMEs in the growth and
development of the Southeast Asian countries, the effect of the trade liberalization, deregulation
and ASEAN community as well as other factors on the growth of the SMEs in that region. It also
provides feasible recommendation for developing the SMEs in Fiji on the basis of the success
factors of the SMEs in the Southeast Asia.
Role of SMEs in the development of South East Asian economies
SMEs are highly significant contributors to inclusive economic growth and development
across the world including in the Southeast Asia. These enterprises help the regional economies
from variety of economic perspectives, such as, business numbers, employment, output,
entrepreneurial activity, growth, exports, economic empowerment, poverty alleviation, and wider
distribution of wealth (Lee, Narjoko and Oum 2017). The economies in the Southeast Asia are
one of the fastest growing emerging economies of the world, and the growth model is based on
foreign investment, international trade and integration into the global and regional value chains.
The SMEs have emerged as one of the key economic institutions that have been able to grab the
opportunities and bring growth and development for the Southeast Asia (ASEAN 2018).

2
ENTREPRENEUR AND SMALL BUSINESS MANAGEMENT
As reported by Pratama (2019), SMEs constitute a major part of the ASEAN economy.
The total establishments of SMEs stand at around 89% to 99%, total employment created in the
10 ASEAN Member States is around 52% to 97%, and contribution to each of the ASEAN
members is between 30% and 53% with the export contribution lying between 10% and 30%.
Due to the widespread presence in the rural and non-urban areas, the SMEs play a significant
role in job and income generation, youth and gender empowerment by creating opportunities for
participating in diverse businesses in the Southeast Asia (Pratama 2019).
Impact of trade liberalization, deregulation and the ASEAN Community to the growth of
SMEs in South East Asian economies
ASEAN (Association of South East Asian Nations) was formed in 1967 with only five
members, namely, Indonesia, Thailand, Singapore, Malaysia, and the Philippines. Brunei was
included in 1984 and in 1990, Myanmar, Vietnam, Cambodia and Laos joined ASEAN. This
community was established to promote economic growth and development in the less developed
Southeast Asian countries. For this purpose, the ASEAN members have trade liberalizations and
flexible regulations, which have been quite beneficial for the growth of the SMEs in this region.
The creation of the ASEAN economic community (AEC) in 2015 resulted in wider and inclusive
development goals under the 2030 Agenda, the economic region has been focusing on SME
development for fostering equitable economic growth and narrowing the considerable income
gap within the ASEAN Member States (Broinowski 2016).
Trade liberalization policies and deregulation measures have been quite beneficial for the
growth of the SMEs in the Southeast Asia as these policies helped these enterprises to improve
their competitiveness through increased trade within the region. These policies lead to tariff