Agility and adaptability emerged as among the top traits that micro, small and medium enterprises (MSME) need to develop to allow their successful transition to the new normal, according to a new report.
The report dubbed “ASEAN MSMEs in a Covid-19 World” underscores the best insights gathered from recent series of talks conducted by the Economic Research Institute for ASEAN and East Asia (ERIA) on how MSME can navigate the pitfalls of the pandemic.
“Being agile and able to rapidly adapt to the changing business landscape is key to overcoming challenges in the short and medium term, including disruptions of global value chains and traditional regional supply networks,” it said.
“Agility and adaptability also allow MSME to quickly seize opportunities presented by Covid-19, for instance, by the increased speed with which ASEAN consumers are adopting digital technologies,” it added.
The report, written by ERIA director of strategy and partnership Giulia Marsan and program officer Lina Sabrina, also underscored how the pandemic has accelerated the trend toward digital economies, offering both opportunities and challenges.
“MSME need to be ready and able to compete in the (often global) digital marketplace. For example, the adoption of e-commerce is an opportunity for many ASEAN MSME to connect to global customers and to increase profitability,” it added.
But the borderless world of e-commerce platforms also means greater competition, so MSME need to find their niche to be successful.
“ASEAN MSME therefore need to combine strategic development with new skillsets for the digital economy, which requires a combination of technical skills, interpersonal skills and problem-solving skills,” the report said.
They will also have to understand and undertake digital data analytics to anticipate future trends and attract new customers.
The report also observed the importance of supporting women entrepreneurship for an inclusive post-pandemic recovery.
Based on recent estimates, a scenario in which women play an equivalent role in labor markets as men could contribute up to $28 trillion to the global gross domestic product by 2025.
Within ASEAN, the number of women entrepreneurs has increased steadily, with more than 60 million women across the region operating businesses, the majority of which are SME.
The paper added that digitalization has empowered many women able to access Internet connections to start small businesses from their own homes.