SME contribution to Asia economy limited – Google

SINGAPORE – Despite small and medium enterprises (SMEs) dominating businesses in Asia including the Philippines, their contribution to the total economic output has been limited, with the growth of these enterprises not keeping pace with their numbers.   

“More businesses in Asian economies are small businesses...and they’re driving change faster than many of the big companies you read about,” Google Asia Pacific president Karim Temsamani said in a forum held here yesterday.    

“The big numbers of small and medium businesses (SMBs) however, don’t fully translate into GDP (gross domestic product),” he said further.   

He noted that while SMBs make up between 80- to 100-percent of businesses in Asia, the sector’s contribution to their respective countries’ GDP ranges between a little over 20- to 70-percent.   

In the Philippines, where most businesses are SMBs, the sector’s share to GDP is only a little over 30 percent. 

He said that among the factors to be blamed for the low contribution to GDP of SMBs in the Philippines is lack of infrastructure to allow these businesses to go online and provide their services through the Internet. 

But while this is considered a constraint, Temsamani said it is just a small challenge given earlier announced investments by firms to improve access to the Internet in their country. 

The bigger challenge in allowing SMBs to increase their share in the total economic output, however, is making these businesses aware of the huge opportunities available for them by going online. 

“Education is an issue. A lot of businesses don’t understand that the Internet can help them efficiently to reach customers,” Temsamani said. 

Through the Internet, he said SMBs could reach not just people in the immediate area, but everyone with online access. 

SMBs buy text, video and mobile ads that reach people for less than the most basic offline marketing campaign would have cost 10 years ago. 

“This power (the Internet) needs to be accessible to every small business, because every business can use it to make their ambitions larger,” he said. 

Temsamani said that as more and more people use mobile devices, SMBs need to make sure they could be found through those gadgets. 

“A lot of SMBs don’t have websites optimized to mobile devices. Everyone needs to understand that consumers have moved to mobile devices,” he said.  “Mobile provides tremendous opportunities for SMBs whether its the apps (applications) or the Web,” he said further. 

At present, Google has online tools to help businesses grow such as AdWords, an advertising platform that allows an enterprise to show advertisements to individuals who type in keywords related to the products or services it offers.  Google Asia Pacific’s director for SMB operations Kevin O’Kane added that such platform allows businesses not only to choose the message they want, but also who they want to reach. 

He also said that even if all SMBs decide to establish an online presence which would mean greater competition, they could still succeed through better goal-setting. 

“These businesses could get more targeted. The more targeted and specific you are, the more successful you are going to be,” he said