USAID launches $18 million SME digital transformation

MANILA, Philippines — The United States Agency for International Development’s (USAID) launched yesterday a five-year project aimed at expanding the participation of Philippine small and medium enterprises (SMEs) in the digital economy.

The $18 million Strengthening Private Enterprise for the Digital Economy (SPEED) project aims to promote economic growth by expanding and advancing the digital ecosystem of the country.

“This partnership with the Philippine government aims to enable small and medium enterprises to participate safely, reliably and competitively in the country’s emerging ecommerce ecosystem. SPEED signals the US government’s strong commitment to supporting the Philippine government’s vision of a digital Philippines,” US Ambassador MaryKay Carlson said at the launch of the project yesterday.

Carlson explained that under the SPEED project, the USAID would continue to work with the Philippine government and private sector partners, including technology experts and innovators to create an efficient and interoperable logistics and digital payments ecosystem and to assist in the establishment of domestic and cross border trade processes to promote inclusive business development and increase SME participation in global value chains.

“We will assist the Department of Trade and Industry to achieve its goal of onboarding thousands of SMEs into the various digital platforms,”Carlson said.

She said that through the project, they would also assist the Banko Sentral ng Pilipinas to reach its target of 50 percent e-payment transactions in 2023 and higher epayments uptake in the succeeding years.

“Furthermore, we’ll explore collaboration with other government agencies such as the Department of Agriculture, to expand agribusiness ecommerce, and help address challenges in agriculture supply chains,” Carlson said.

“And we will strengthen partnerships with the private sector to drive innovation and co-create market oriented solutions to unlock the vast potential of the digital economy,” she said.

The SPEED project will focus on four areas particularly improving SME capacity and access to e-commerce platforms; expanding and increasing the use of e-payment systems and other fintech innovations; improving the integration of e-commerce platforms with logistical supply chains; and increasing consumer awareness and protection.

The USAID emphasized that the project supports initiatives that promote the use of digital technologies to accelerate competitiveness, drive innovation, fuel job opportunities and enhance the market reach of enterprises.

“SPEED incorporates USAID’s Digital Strategy which seeks to improve USAID development assistance outcomes through responsible use of digital technology and promote an open, inclusive, and secure digital ecosystem.

The project also aligns with its private sector engagement policy by co-creating market-oriented solutions with, and unlocking the vast potential of the private sector.

SPEED will develop a comprehensive digital transformation framework to assist SMEs as they transition to mature e-commerce businesses, and support innovative, replicable, and sustainable business models in the digital economy,”the USAID said.

SPEED will deploy a one- to-many approach in regional clusters and target strategic value chain to reach scale and evidence-based “go digital” models.

The project will also launch a grants program aimed at promoting innovative ideas and new technologies and collaboration on product marketing and promotion; helping producers achieve international quality standards; conducting research, workshops, and training; and launching public awareness initiatives, to drive scale and innovation.

During the project launch yesterday, Trade Secretary Alfredo Pascual noted that one of the top priorities of the DTI is to assist MSMEs in digital transformation.

“With Strengthening Private Enterprise for the Digital Economy, USAID can be DTI’s partner in empowering small and medium enterprises through digital transformation. One of DTI’s strategic actions is to upgrade, upskill, and upsize MSMEs,” Pascual said.

He also highlighted the benefits of digital transformation to MSMEs, saying that, “digitalized MSMEs can operate more efficiently, reduce costs, reach bigger markets, and earn profits. For example, digital systems of enterprises can accumulate cashflow data on sales, use enterprise data for credit scoring, and provide access to cashflow-based credit.”

In pursuit of its digitalization goals, the DTI  is also working with the Department of Information and Communication Technology (DICT) to establish an e-commerce platform that can be utilized by MSMEs and will facilitate MSMEs’ pivot from offline to online.

The trade department  is also implementing the Big Brother-Small Brother Digitalization Project, where conglomerates and big businesses assist in the digital upskilling of MSMEs, to digitalize supply chains.