What never ceases to surprise us here in the SME Team, is how similar small business issues are, no matter which country or region we go to.
Take access to finance as an example – lack of collateral, appropriate good governance and risk management, as well as the skills of owner managers themselves are more than likely to be brought up in the discussions whether they are taking place in Africa, Asia or Europe. It seems that SMEs across the world have many things in common and unfortunately most of these are likely to be problems.
However, on my recent visit to Cambodia and Vietnam where I took part in a series of events and meetings organised by ACCA offices in Hanoi, Ho Chi Minh City and Phnom Penh, I learnt something new. Export is actually a major source of SMEs’ economic contribution in these fast growing and open economies and this was not only apparent in the figures, but in the culture and the whole business ecosystem in which small business owners operate.
Here in Europe, we talk of exporting and SMEs as something marred with problems and actually quite a difficult proposition for small businesses. In Asia on the other hand, while SMEs are under acute pressure concerning demand, inflation and currency fluctuations, exporting itself is something that they see as business as usual.
Furthermore, it wasn’t just the business owners who seemed comfortable with the idea but also many of the key institutions that small businesses rely on – most surprisingly of all, banks. While over in the UK, financial products such as FX forwards, import documentary credit or foreign currency receivables financing are rarely marketed to small businesses, in Vietnam banks see this is as their key commercial advantage and advertise exactly this in their general SME marketing collateral, whereas in Europe, we are likely to view these products as rather niche. This made me think how far away we are in Europe from seeing SME exporting in this way, and it also made me wonder how much of this is actually tied to culture rather than actual practice.
This brings me to another interesting difference. Opportunities for SMEs that will be created by the ASEAN integration were never far from the discussions. While many commentators doubt that the regional economic community will come together in time for 2015, the region is still heading firmly in that direction and SMEs are already discussing how they can be ready to make the most of opening up of regional trade.
At a time when the Eurozone is facing so much challenge and doubt in terms of its future, it was quite refreshing to spend some time in a region that is working on coming together and looking ahead to the economic potential that this represents.
Refreshing… but also depressing to come back to a Europe looking in the other direction…