annual revenue, and total assets comprising a company. An industrial SME is defined as having up has up to 2,000 employees; while a ME has between 301 and 2,000 employees; and a SE has less than 300. Consequently,
what is regarded as an SME in China may be quite large relative to an SME in other countries.
3.2 Performance
Asian developing countries have touted SMEs as the engine of economic growth and development, the backbone of national economies, the highest employment-generating sector, and a potential tool of poverty
alleviation by creating self-employment avenues. This paper presents information on SMEs in ASEAN countries as a very important group within Asian developing countries, and China as a comparison. With respect to
ASEAN, notwithstanding various definitional issues and data problems, by combining all sources which are available, there is an rough estimated total of some 21 million non-agricultural SME in this region, or about
more than 90 of all non-agriculture firms in the region Table 3. These enterprises play a strategic role in private sector development, especially in the aftermath of the 199798 Asian financial crisis. In some member
countries, as their economies modernise or industrialise, SME provide the much-needed inter-firm linkages required to support LEs to ensure that they remain competitive in the world markets. SMEs generally account for
between 20-40 of total domestic output and they employ an overwhelming proportion mostly in the 75- 90 range of the domestic workforce, especially adult persons and women.
6
On the other hand, in spite of the significance of these indicators, the SMEs’ VA contribution to the economy for most ASEAN countries has yet to commensurate with the sector’s size and socioeconomic potential.
Wattanapruttipaisan’s 2004 own calculation shows that SME in ASEAN contribute a disproportionately limited share of 20 to 40 to gross sales value or manufacturing VA
7
In Singapore, for instance, the VA of SME is only 34.7 of the economy’s total VA, while their productivity is half that of LEs. Malaysian SME contributed only
about 26 to manufacturing VA. In Thailand, commonly cited as a successful model for SME development in ASEAN, its SME contribution is only 47 of total VA.
In China, SMEs has been increasingly contributing to China’s economic growth. They make up over 99 of all enterprises in China today. The output value of SMEs accounts for at least 60 of the countrys gross domestic
product GDP, generating about 83 of total employment opportunities in the country. Comparatively, SMEs in the developed nations contribute about 50 of total VA in the European Union
EU, or, individually, for instance, SMEs in Germany are responsible for approximately 57 of the country’s
6
. A study conducted by the Asia-Pacific Economic Cooperation APEC shows that women entrepreneurs own and operate up to 30 of SMEs in such as Indonesia, Philippines and the Republic of Korea APEC 1999.
7
For further details, see, among others, Hall 2002, Harvie and Lee 2002a,b, 2005, Lee and Tan 2002, Richards et al. 2002, Tecson 2001, Régnier 2000 and Tambunan 2000, 2006.
7
Taipei, China; and in the United States US it is about 30 to total sales value.
Table 3: Non-agricultural SMEs in ASEAN and China
SMEs as a of Country
No. of non-agricultural SME in 2002 or later or
best quess ‘000 Percentage of GDP, or
VA or output value All Firms
Workforce Brunei Darussalam
Cambodia Indonesia
Lao PDR Malaysia
Myanmar Singapore
Thailand Philippines
Viet Nam China
1
30
2
26 21,895.996
3
22
4
205 34
4
60-72
5
1,640 68
6
2,700
7
8,000 -
- 57 total VA
- 15 total gross output
47.3 total VA 26 manufacturing VA
- 41 manufacturing output
34.7 total VA 47 total VA
32 total VA 42 total VA
60 GDP 98
99 99.9
- 99.2
96 97.8
99.8 99.6
96 99
92 45
99.6 -
65.1 32.5
8
78 58
76
8
99 85
83 Notes: 1: best guess for 2000; 2: est. active 2004; 3: includes MIEs 2006; 4: 19989; 5: estimated active; 6: excludes 744,000 MIEs
2001; 7: excludes 10 million MIEs; 8: manufacturing industry only. Sources: APEC 2002, RAM Consultancy Services 2005, UNCTAD 2003, Hall 2002, Myint 2000, Regnier 2000, Ministry of
Industry, Mines and Energy of the Kingdom of Cambodia, BPS Indonesia, Census 2005 Malaysia, JASME Annual Report 2004- 2005 Japan; SMEA White Paper on SMEs in Taiwan 2005, OSMEP White Paper on SMEs in Thailand, 2002, National SME
Development Agenda 20002001 Philippines, Xiangfeng 2008, Tambunan, et al. 2008, Tambunan 2008.
With respect to export, it reveals from Table 4 that in general ASEAN SMEs are not yet so strong in export as their counterparts in such as China, India, Chinese Taipei or South Korea; although the export intensity of
ASEAN SMEs is different by country. For instance, in Indonesia the SMEs’ contribution to the country’s total export of non-oil and gas by the end of 1990s was only 11, compared to Vietnam at 20, or almost 27 in
Thailand in 2003. Featuring prominently in SME exports from Indonesia, Philippines, Thailand and Viet Nam are food products, textiles and garments, leather and plastic goods including toys, furniture items, handicrafts,
jewelry and, to a less extent, mature-technology automotive and consumer electronics parts.
8
Wattanapruttipaisan 2005 argues, however, that direct export of ASEAN SMEs might be low, but, if indirect contributions are taken
into account, then their overall share in export earnings is certainly much larger because SMEs feature prominently as subcontractors to export-oriented local LEs and multinational companies MNCs
9
.
8
For further details, see Hill 1995, 2001, 2002, Rodriguez and Berry 2002, Steer and Taussig 2002; Regnier 2000, Tambunan 2000, 2006 and Tecson 2001.
9
See also Rodriguez and Berry 2002; Wattanapruttipaisan 2002a,b; Regnier 2000; Tambunan 2000, 2006, and Levy et al. 1999.
8
China India
Chinese Taipei Vietnam
Singapore Malaysia
Indonesia Thailand
40-60
1
38
1
56 20
1
16
1
15
1
11
1
10
1
38.22
2
26.5
3
Sources: 1 UNCTAD 2003; 2 Mephokee 2004: 38.22 in 2002 and 45.5 in 2003 of the country’s total export for industrial products; 3 White Paper on SMEs 2004 Government of Thailand, website
4. Indonesia 4.1 Economic Contribution
