Here’s how Google is helping MSMEs in Southeast Asia
The pandemic posed a huge threat to micro, small and medium-sized enterprises, or MSMEs. Unable to afford to digitally transform their business fast enough, many also lacked the skills make it happen.
Luckily, many were able to make the most of the digital services available to them. This includes services and training offered by tech companies to enable MSMEs to grow their businesses digitally and make the most of the data and tools available to them.
Google uses the same definition of MSMEs as the International Labour Organisation, which categorizes micro-firms as those with fewer than 10 employees, and small and medium-sized enterprises (SMEs) to have fewer than 250 employees.
As such, when Google supports MSMEs, it refers micro-firms as well as SMEs. In this case, MSMEs include all enterprises that have between 2 – 250 employees. This means when offering support to their customers, such as through its Grow with Google program, the education and training support received by micro-firms and SMEs is the same, regardless of company size.
Google helps MSMEs in the region benefit from improving digital inclusion. In Indonesia for example, 80% of MSMEs have seen an increase in customer engagement while more than eight out of ten MSMEs in Thailand have effectively created or updated their online presence.
In Vietnam, 94% of the MSMEs shared that they were able to keep their businesses operating during the pandemic while 70% of MSMEs in Laos said the tools helped them move their business online.
Tech Wire Asia speaks to Stephanie Davis, Vice President of Google Southeast Asia, about how the tech company is enabling MSMEs in the region to boost their digital inclusiveness as well as close the digital skills gap.
What are the biggest challenges for MSMEs today? Is it just access to funding?
e-Conomy SEA 2022 report shows that to be able to maintain growth momentum in the digital economy, the focus for businesses in the next two to three years is to find a path to profitability by deepening engagement with their customers. Digital skills continue to play an important role for businesses to be able to unlock digital opportunities. Closing the digital talent gap requires companies to expand their focus from headcount growth to developing in-depth capabilities in areas such as data science, cloud technologies, and digital marketing. It is particularly important for MSMEs to emphasize skills training and expand the capabilities of their employees to sustain and drive growth.
In 2018, we committed to training three million MSME workers across ten ASEAN countries with digital skills. Working closely with more than a hundred committed government partners, local associations, and NGOs, we have recently achieved this goal. Together with our partners, we continue developing locally tailored programs to ensure more MSMEs – and individuals alike – are equipped to seize opportunities technology can provide.
We are seeing our efforts creating encouraging results. For example, our survey showed that 80% of MSMEs trained in Indonesia had seen an increase in customer engagement following digital skills training, while 83% of MSMEs trained in Thailand have effectively created or updated their online presence. Here in Singapore, nearly four in five MSMEs felt the training had provided them with new knowledge to grow their businesses.
With economic uncertainties and inflation affecting the performance of large enterprises, how big of an impact will it have on MSMEs?
Economic headwinds can impact businesses of all sizes, from MSMEs to large enterprises. Technology can help them lean into new opportunities, from understanding consumers’ adoption and usage behaviors to unlocking incremental headroom for growth and adapting to changing business needs.
At Google, our goal is to build tools and products that will help businesses reach these goals. Google Market Finder is one example that helps identify promising export opportunities for MSMEs looking to expand their business overseas, and our advertising tools like Smart Campaigns allow businesses to reach people that are interested in the products and services they offer.
As the world continues to face a great deal of uncertainty, it’s more important than ever to ensure that people, businesses, and communities have equal access to technology that can help them navigate the complexity – and prepare for the future. This includes MSMEs in marginalized communities.
During the pandemic, the Go Digital ASEAN program initiated by The Asia Foundation and supported by Google.org, helped train over 200,000 MSME owners across Southeast Asia, especially women from underserved communities, to acquire new digital skills to support their businesses. The program enabled indigenous entrepreneurs like Lakela in Thailand to gain skills and confidence to market their new products online.
Lakela is a self-taught Lahu entrepreneur, who learned everything she knows about farming from watching YouTube videos. Today, her harvests include a wide range of delectable produce including avocados, guavas, peaches, persimmons, plums, mangos, star apples, custard apples, rambutans, and even black jasmine rice, and black sticky rice.
To boost her business, Lakela enrolled in Go Digital ASEAN training and learned about storytelling on social media. Through posting engaging photos, she quickly earned a bigger following, and more customers and during the latest harvest season, Lakela was able to quadruple her income.
Another example is Bui Thi Phuc from Vietnam. The founder of Sosono Spa was inspired to start her business after she learned how to make traditional beauty products from her grandmother-in-law. Excited to share her passion for natural beauty, she began promoting her spa through leaflets and social media but struggled to find customers. By chance, Phuc stumbled upon Vietnam Digital 4.0 – a Grow with Google program.
Through its classes, she learned to use Google Business Profile to make sure her spa surfaced in search results when people looked for spas in her area. In just five months, her customers more than doubled, with foreign patrons contributing to 30% of sales. She now looks forward to expanding her business and hiring a larger team.
Building on the success of this program, we are contributing a US$4 million grant to scale this effort further. The new funding will support another 200,000 MSMEs across the 10 ASEAN countries to build new capabilities in cybersecurity, financial planning, and green skills to address the knowledge gap. I’m looking forward to seeing the impact this program can create over the next few years.
While large enterprises are championing sustainability, how can MSMEs play their part in this?
Based on the eConomy SEA 2022 report, Southeast Asia’s digital economy is projected to drive 20 million tonnes of emissions in 2030. If these emissions are optimized, the carbon output of the digital economy can be reduced by up to 30-40% and potentially become much lower than traditional channels. So, there’s a role that digital players, including the MSMEs, can play in this.
When tackling climate change, everyone has a role to play. We are committed to working with our partners and acting now. This can include helping MSMEs by providing them with the resources to measure and manage their carbon emissions, which is a vital step toward tackling climate change.
If we look at environmental, social, and governance topics more broadly, on the social side, we have seen the digital economy delivering business opportunities, creating new jobs, and contributing to the economy significantly. Especially in uncertain times, we need to ensure we don’t leave anyone behind. Building digital inclusion is essential to ensure opportunities are equally available for the economy to scale sustainably.
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