116 
About Documents
In recent years, ASEAN has faced rapid and severe changes. The COVID-19 pandemic disrupted economic systems, global inflation increased, and interest rates continued to rise. Despite these challenges, small and medium enterprises (SMEs) have shown strong resilience and adaptability, becoming a key driver of the ASEAN economy.
The importance of SMEs lies not only in the fact that they account for 99 percent of all businesses in the region. They also play a major role in employment, local economic development, and the creation of new innovations that support ongoing regional growth.
The SME Policy Index 2024, developed by ERIA and the OECD, shows that although ASEAN economies were affected by global economic conditions, most member states improved their ability to adapt and strengthen SME support policies compared with the 2018 assessment. Average scores across all evaluated areas increased, showing clear progress in SME policy frameworks across the region.
This progress also shows that ASEAN member states are moving in a more unified direction. Differences among countries have fallen significantly, which signals growing policy integration in the region.
While COVID-19 caused many negative economic impacts, it accelerated the digital transformation of ASEAN SMEs. Many entrepreneurs adopted digital payment systems, opened online storefronts, tested social media marketing, and learned to use digital tools to run their businesses more efficiently.
Governments responded by developing digital support programs such as skills training, advisory services, and digital infrastructure development to strengthen SMEs competitiveness. These efforts helped ASEAN’s grassroots economy endure and continue operating despite ongoing uncertainty.
There has also been clear progress in innovation-related SMEs development. Many countries have increased investment in innovation centers, specialized industrial zones, business-matching programs, and innovation voucher systems that help SMEs access new technology. Countries that are more advanced, such as Singapore, Malaysia, and Thailand, have initiated cross-border cooperation to help neighboring countries apply shared experience and infrastructure, strengthening innovation ecosystems throughout the region.
The SME Policy Index 2024 also shows that ASEAN SMEs are more aware of sustainability, which is essential for the transition to a green economy. They have begun adopting key measures such as reducing carbon emissions, using renewable energy, and improving production processes to be more environmentally friendly.
Although many entrepreneurs still have only basic knowledge, several countries have introduced support measures such as green loans, tax incentives, and environmental management training programs. These steps will help SMEs meet global sustainability standards more easily in the future.
However, SMEs still face major challenges that require stronger support. Access to finance remains a significant obstacle for small businesses in many countries. Even though fintech lending and digital payments have grown, access to long-term investment loans is still limited.
In addition, many countries lack complete and systematic SMEs data that can be used to design accurate policies. The report therefore recommends developing regional data mechanisms and cross-border cooperation, such as shared credit information systems or regional funding platforms to support business expansion. These tools would greatly benefit SMEs aiming to enter regional and global markets.
The report recommends that SMEs development in ASEAN should move forward through several joint measures. These include aligning SMEs definitions across the region, integrating digital, innovation, and sustainability policies, and creating evaluation systems based on real data to improve policy accuracy. These approaches will strengthen SMEs and improve long-term regional competitiveness.
ASEAN SMEs are a key force that can lead the region toward a more digital and sustainable future. If member states continue to cooperate on policy development and support SMEs in growing with quality, ASEAN has the potential to become one of the strongest SME regions in the world.
Author:
Mr. Wimon Punkong
Deputy Executive Director (Academic)
International Institute for Trade and Development (ITD)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 39 Issue: 13041
Date: Wednesday, Nov. 26, 2025
Page: 8 (bottom)
Column: “Asean Insight”
