Role of Logistics for SME in ASEAN Integration

Role of Logistics for SME in ASEAN Integration

The Association of Southeast Asian Nations (ASEAN) has made extraordinary progress since it was first founded in 1967. It has transformed into an increasingly well-regulated, dynamic, and creative platform for trade and commerce as the world’s fastest-developing economic region. Economically, ASEAN as a region has achieved significant progress and prosperity. Gross Domestic Product (GDP) has nearly doubled since 2017. The increasing GDP is possible, thanks to small and medium enterprises (SMEs). Micro and SMEs are key importance in ASEAN due to the sector’s economic dominance in terms of its share of total establishments and total employment. It is also the key to all-inclusive business competitiveness, according to the ASEAN Strategic Action Plan 2016-2025.

The report also mentioned that the trends of SMEs integration can make up to 96 percent of business in ASEAN member states. This has generated employment and income fundamental in achieving sustainable economic growth. The Philippines, for example, its local SMEs represents 98 percent of all registered businesses. It happens as the government is implementing initiatives to cultivate an environment that empowers local SMEs to better seize opportunities in the global market.

See also: 4 Key Factors for Successful Future in Digitised Logistics

Supply chain has also contributed to the growth of SMEs revenue. Singapore and Korea, in this regard, has strong intra-regional exports. This practice contributes up to $2.1 million and $1.4 million respectively to global revenues.

However, albeit SMEs recognises their opportunity, there are still some challenges to overcome. The most common ones are in terms of competition, both internationally and locally. John Peterson in his study wrote that 38 percent of business will face international challenges, while a local challenge is about 37 percent from overall calculation. Many businesses are aware of the chance of growing up their business in ASEAN integration. Therefore, business world will be more competitive in the future. The challenge might vary, depending on product or service each organisation offers.

Moreover, as SMEs challenges lie in their understanding of their own product and service, the solutions are pretty simple. Peterson said that to overcome the above challenges, SMEs must think bigger and invest more in training, market research, new technology, and services. Additionally, company should provide its service internationally in order to survive. In fact, all business should be able to compete internationally.

The answer to this international competition lies in a logistics provider. “To sustain regional competitiveness, enhanced and efficient logistics and distribution services will reduce transport time and distribution costs within and outside the region,” Peterson suggested. Therefore, tapping to the right logistics provider will help SMEs thrive in global market. Logistics can help SMEs provide and leverage service internationally. But remember, a business should be smart enough to choose logistics provider that are flexible, better, easy to track, easy but good regulations, and have an international licence.

Read also: Supply Chain 101: How to Choose Between Air and Ocean Freight

Leave a Reply

Your email address will not be published. Required fields are marked *

ERROR: si-captcha.php plugin says GD image support not detected in PHP!

Contact your web host and ask them why GD image support is not enabled for PHP.

ERROR: si-captcha.php plugin says imagepng function not detected in PHP!

Contact your web host and ask them why imagepng function is not enabled for PHP.