Entrepreneurship and SMEs in Southeast Asia

Entrepreneurship and SMEs in Southeast Asia

Entrepreneurship and SMEs in Southeast Asia

Entrepreneurship and SMEs in Southeast Asia

Synopsis

Economic development in Southeast Asia was until recently largely driven by multinational corporations and by strategies that favoured foreign direct investment. However, the financial crisis of 1997-98 and the subsequent regional economic slowdown in 2001 forced policy-makers to re-evaluate their economic policies. This study looks at the increasingly important role of entrepreneurship and small and medium enterprises (SMEs) as agents of development. The book also focuses on the new policy initiatives by the different governments as they address the issues affecting the development of SMEs themselves.

Excerpt

It gives me great pleasure to be here this morning at the ISEAS’ asean Roundtable 2002. the topic of this year’s Roundtable, Entrepreneurship and SMEs in Southeast Asia’s Economic Development, is timely.

Across the region, countries are looking afresh at their economic strategies, to achieve more resilient growth in a less certain environment. There is a fresh focus on the role of SMEs in this regard. Having been generally neglected in past growth strategies, SMEs and entrepreneurship are now viewed as integral to future growth.

Past Growth Strategies — Fostering Large Players

There are a number of reasons for the predominant role of large firms in economic growth strategies in Southeast Asia, and indeed much of East Asia, in the last forty years. First, economic development in the region has centred on export-oriented growth, encouraging firms to look outward and compete with global players. Second, the initial base of entrepreneurship in most countries in the region was not wide. There was especially a shortage of industrial expertise. the region had no more than a rudimentary industrial economy until the 1960s and early 1970s. Countries had to quickly attract or nurture firms capable of competing in world markets and generating jobs. This was quite in contrast to the natural evolution of industrial capabilities in most of the advanced economies, which had taken many decades and in less . . .

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