ASEAN A Fertile Ground For Innovation, Says Study

KUALA LUMPUR, Dec 9 (Bernama) -- A study conducted by a French agency, Global Entrepreneurship Monitor (GEM), reveals that ASEAN is a fertile ground for innovation driven by entrepreneurship. According to the study, which was done in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, the region is among the most entrepreneurial in the world with 66 per cent of the people in the region viewing entrepreneurship as a positive career choice, above the GEM global average of 62.46 per cent. The study also reveals that the region is ripe for entrepreneurship as neighbouring countries in Asia and in the Pacific Rim see ASEAN as providing good opportunities for trade, business and economic partnerships. Executive Director Mike Herrington said ASEAN is well positioned to play an increasingly important role on the global economic stage. "An Asian Economic Community (AEC) is no longer an abstract but a reality that the regional governments are urged to embrace," he added. He said the GEM report recommended 10 key focus areas to boost entrepreneurship and innovation across the region including building the professional ability of governments to better understand and serve entrepreneurs, and meaningful media communications. The report also suggested investing in good IT infrastructure and creating tailored development programmes for entrepreneurs. "Entrepreneurial capacity can be built through concerted mutual effort, with governments focusing on reforms that help to create enabling environments that foster innovation, facilitate more productive economies and, critically, open up new and better job opportunities for all segments of the population," he said. Herrington said these would address the concern in the report which showed only moderate levels of innovation. "Just over half of ASEAN entrepreneurs said their products/services are not new to customers. About 60 per cent of businesses in the region believe there is high competition, which poses a significant challenge to business viability," he said. In addition, he said, few businesses are generating significant job numbers, with more than half of entrepreneurs in the region expected to generate no jobs and 35 per cent forecast to create only between one and five jobs. "Ironically Singapore, which has low entrepreneurship rates, is the only country that reported significant job creation," he said. He said Singapore is also the only country to have a significant percentage of entrepreneurs in financial intermediation, communications, professional and government services while the majority of entrepreneurs in the region are in low-growth retail, hotel and restaurant businesses. Herrington said the survey also showed a positive entrepreneurship rate in the region with low nascent entrepreneurship (businesses less than three months old) rate of five per cent versus 10 per cent new business (businesses between three months and 42 months) rate, which is the second highest regional average globally. He said the established business rate of 14.1 per cent is the highest regional average and is also significantly above the GEM average of 8.4 per cent. Within the region, he said, Thailand and Vietnam lead the pack, followed by Indonesia while Malaysia and Singapore lag with lower levels of entrepreneurship across all stages of business. The established business rate in Thailand is a healthy 33.1 per cent as compared to just 2.9 per cent in Singapore. --BERNAMA