Development of SME in ASEAN with Reference to Indonesia and Thailand

Abstract

This paper aims to examine the recent development of small and medium enterprises (SMEs), their experiences during the 1997/98 Asian financial crisis, and their main constraints in member countries of the Association of Southeast Asian Nations (ASEAN) with special reference to Indonesia and Thailand. Although information/data on SMEs in some member countries are limited, the paper concludes with three important findings. First, SMEs are of overwhelming importance in ASEAN countries, especially for employment or income generation. Second, although the SMEs experiences during the 1997/98 crisis were different between countries, the assumption that the SMEs in general weather a crisis as in 1997/98 better than their larger counterparts cannot be verified. Third, the situation for SMEs with respect to the main constraints is more or less similar between countries, namely, they lack technical and managerial capabilities, access to greater markets, access to finance, skilled workers, and lack of access to information which is vital to business.