Micro, small and medium enterprises (MSMEs) are key to increasing local content in products, but these businesses’ limited access to technology, training and finance prevents them from integrating into the value chain of the economy, experts and public officials said in a forum on Thursday last week.
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“Right now,, MSMEs contribute only 25% to the total value and 22% to total sales of our economy,” Jovito Rey E. Gonzales, chief science research specialist of the Department of Science and Technology’s Technology Application and Promotion Institute, said in a report presented at the Multi-Stakeholders Convergence Forum on MSMEs held at the Institute for Small-Scale Industries in the University of the Philippines-Diliman (UP-ISSI).
“The country’s low capacity for processing raw materials currently classifies our economy as a factor-driven economy,” UP-ISSI Director and SERDEF Executive Director Nestor O. Raneses said in his presentation, noting that “among developed and rapidly developing economies in the Asia-Pacific, we have the lowest MSME growth rates and survival rates.”
MSMEs’ general failure to expand or even just sustain operations can be traced to weak or poorly designed government interventions to increase small entrepreneurs’ knowledge and skills to use technology and financial resources to grow their business, the speaker said during the forum.