Bridging The Gap : SME and Export

The growth of small and medium-sized companies (and the effect on job creation) is an important challenge for the economy of the Philippines.

 

The coming Asean Economic Integration in 2015, the single market between 10 economies in South East Asia, with (nearly) free movement of goods, people and services, offers many opportunities for growth, development and sustainable job creation. But there are still a lot of obstacles for the SME to overcome in order 'to be part' of this -competitive- Asean market. Coping with this obstacles is of strategic importance, as discussed below,  for our country whose economy is largely export dependent.

 

Lack of international trade skills

 

One of the biggest obstacles for SME to expand their markets internationally is a lack of people with suitable international trade skills. International market research, export offers, delivery terms, how to write an export business plan, export sales strategies are just some examples of this issue as explained in Strategy 2000 of Oxford Research).

 

The gap between 'knowing and doing'

 

According to an article in the February 2012 'Harvard Business Review', the 'knowledge-doing' gap between colleges/universities and SME is another obstacle. Knowledge must be turned into practical skills and brought into action in an SME. Knowing how to write an export business plan or to do export market research is not enough; you have to do it in a real life situation when operating an export venture. To achieve this, SME can benefit from an export coach with international business experience.

 

Lack of international networks for trade

 

An international trade network of colleagues, experts and potential customers is as important as the trade knowledge required to be able to grow internationally - especially for SME interested in entering new markets. Much of the international trade training today is within a single country, and such national offering limits the possibility of creating an international network. That is why initiatives as the partnership of the Davao Chamber of Commerce (through the Small Business Development Center)  with the Dutch government agency CBI is so important for the (would-be) exporters of Mindanao. This program offers (and subsidies) trainings overseas for selected exporters with the objective to bring their products to the European market.

 

Lack of a qualification system 

 

The export profession is not yet recognized as such. A professional designation is needed to give an identity and recognition to colleagues, clients and employers. That is why the Davao Chamber of Commerce, through the Small Business Development Center, and TESDA XI joint forces and are working on training curricula and assessment tools (NC III and NC IV) for the export profession It is obvious that the SME will be consulted to find out what specific skills and competencies in the export field is lacking on the market.

 

The outcome

The need for international trade competence within SME has never been more pressing given the Asean Integration in 2015. A review in the Swedish newspaper Dagens Industri of an international trade training program indicated that an investment of 10,000 Euro actually gave a return of 500,000 Euro of increased exports! The message is clear that we have to put international trade training on the agenda to support our SME and to create sustainable jobs and growth.

 

 

Raf Vlummens, MFin, CRA

Entrepreneurial Coach