APEC Peru 2008: A veritable fiesta for small and medium-sized enterprises

(David Azócar from Lima) APEC is more than a mere Leaders Meeting where the major political patriarchs of the 21 economies of the bloc meet to agree on free trade strategy. SMEs have also found in APEC a forum in which to interact. Proof positive of this is the more than 800 small and medium-scale entrepreneurs who met to share experiences and strategize in a trade area where the financial crisis has been slow in coming.

Small and medium-sized enterprises employ the largest percentage of people in Chile and also in the broader Asia-Pacific, where SMEs employ more than 85% of the workforce. Accordingly, the APEC Business Advisory Council (ABAC) has decided to hold a special entrepreneurs meeting entitled the 2nd Small and Medium Enterprises (SME) Summit.

Among the most discussed (and debated) topics were the following: technology as a tool for global market integration; SME globalization; the success of production chains; and opportunities for regional and local financing.

Local and regional businessmen made presentations at the summit. Summit standouts included Angel Añaños, Chairman of the Board at AJEGROUP, S.A., a bottling firm. Starting twenty years ago with only 10 workers, Añaños now employs more than 10,000. “Without a doubt one of the problems is that most companies are devoted solely to making products for the highest revenue sectors. But in Latin American nations more than 80% of the population falls within the poor to modest groups. This is who we should produce for. This is where there the large niche is.”

Jack Ma, most applauded speaker at summit

The CEO of Alibaba, “the world's leading B2B e-commerce company”, was undoubtedly the most applauded speaker of the day. After explaining his business model, he emphasized another point. In order to succeed in China and the broader global market, it is fundamental to combine high aspirations with a superior work ethic. “Many people think it takes a lot of money to start a business, but market awareness and a willingness to take risks are even more crucial. Until a few years ago, nobody would have imagined buying over the Internet. That has now changed, and radically so.”

Ma is one of the wealthiest men in China. He made it clear that although everyone is worried about the arrival, there are players, referring to stock speculators, who are quietly doing big business. “This is no time to be inactive. It's time to find partners, make moves and read. The crisis will not last forever and those who stay active stand to gain the most.”

As mentioned, Alibaba is one of the most successful firms in the e-commerce world and is also principally based on SME sales. In fact, it receives over 500,000 visits a day and has 2.5 million registered users worldwide. Users need to have a limited ability in English.

CORFO, the Chilean experience

Chile was also present at the SME summit in the person of Patricio Reyes. According to the expert from CORFO’s Development and Commercial area, “SMEs are key to social development. In Chile, (we have) so-called incubators, used for vetting good ideas. The incubators provide people and their ideas with specialised support, in addition to financial support. That is, seed capital.”

Measures to improve the competitiveness of APEC SMEs

One of the most important objectives of the SME Summit was to generate proposals for stimulating SME dynamism and competitiveness.

- Stimulate the interfacing of market needs with university research

- Insertion of new technologies and training in the use thereof by SME workers and owners. (Commerce and Business)

- Find partners to generate virtuous circles that facilitate transfers of know-how for the improvement of products.

- Encouraging governments to clear rules that do not discriminate between small and large companies.

- Build trust between SMEs and their suppliers to get direct credit, which has clear rules.

- Support institutional financial sectors to improve their practices.

- Encourage the generation of competitive benefits. (Cluster Creation)

- Improving medium and long term financing policies on the part of governments.

The meeting was held at the Fortaleza del Real Felipe Convention Center and attendees included John F. Raffo, Chairman of the APEC Business Advisory Council, Elena Conterno, Minister of Production, and the President of Peru, Alan García, who closed the event.