Project Title

APEC SME Internationalization Model Indices - Development and Application 

Project Year

2015   

Project Number

SME 04 2015 

Project Session

Session 1   

Project Type

Standard 

Project Status

Completed Project   
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Project No.

SME 04 2015 

Project Title

APEC SME Internationalization Model Indices - Development and Application 

Project Status

Completed Project 

Publication (if any)

 

Fund Account

General Project Account 

Sub-fund

None 

Project Year

2015 

Project Session

Session 1 

APEC Funding

110,000 

Co-funding Amount

75,000 

Total Project Value

185,000 

Sponsoring Forum

Small and Medium Enterprises Working Group (SMEWG) 

Topics

Small and Medium Enterprises 

Committee

SOM Steering Committee on Economic and Technical Cooperation (SCE) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Korea 

Co-Sponsoring Economies

Indonesia; Japan; Malaysia; Philippines; Singapore; Chinese Taipei; Thailand; United States 

Expected Start Date

01/07/2015 

Expected Completion Date

30/04/2016 

Project Proponent Name 1

Lee Sung-hee (new PO wef 8 January 2016) 

Job Title 1

Director, Global Cooperation Department 

Organization 1

Small and Medium Business Corporation (SBC) 

Postal Address 1

430, Dongjin-ro, Jinju-si, Gyeongsangnam-do, 52851, Korea 

Telephone 1

82-55 7519710 

Fax 1

Not Applicable 

Email 1

oscar@sbc.or.kr 

Project Proponent Name 2

Not Applicable 

Job Title 2

Not Applicable 

Organization 2

Not Applicable 

Postal Address 2

Not Applicable 

Telephone 2

Not Applicable 

Fax 2

Not Applicable 

Email 2

Not Applicable 

Declaration

Lee Sung-hee 

Project Summary

This project aims to develop APEC model indices to measure SME internationalization level, including global value chain (GVC). The common indices in the APEC would provide basis for and facilitate discussions among the policy makers and businesses. The first project focuses on the development of the APEC SME internationalization indices and the application of it to some of member economies, as a process of examining the feasibility of the indices in the region. Eventually, it will lead to the next project which includes expanding the scope to all APEC economies in the form of extended research and workshops.

The project will be implemented through:

1) developing the SME internationalization indices (March – June 2015);

2) elaborating the indices and selecting participating economies for pilot study application (July - September 2015);

3) conducting pilot studies and collecting relevant data (October 2015 – mid-January 2016); and

4) diagnosing the SME internationalization status of participating APEC economies and devising policy recommendations for APEC economies (mid-January - April 2016).

Relevance

With globalization, the scope of internationalization activity has grown exponentially more complex. While in the past focus had long been on trade, firms are now getting involved in global value chains and making diverse forms of collaboration, such as joint ventures, non-equity strategic alliances, licensing agreements and so on. This trend extends to SMEs as well, although doing so has greater obstacles compared with large enterprises.

However, there is no single tool yet capable of measuring the internationalization levels of SMEs in an economy.  This is because the patterns of internationalization are diversified, especially in the APEC region, where gaps in government policies and in the innovative capability, entrepreneurship, and business strategies of SMEs make developing such a tool a major challenge. For facilitating the internationalization activity of SMEs in this region, it is essential to make an objective diagnosis of their internationalization using a model or indices, upon which problems in internationalization can be addressed.

The project falls under two priorities of Rank 1 of the APEC Funding Criteria: “SME development, including access to regional and global markets” and “Activities outlined in Global Value Chains (GVCs) Blueprint.” The project is also linked to two priorities of Rank 2: “Macro-economic policy coordination and information sharing,” of Balanced Growth and “Activities/issues related to addressing the social dimension of globalization” of Inclusive Growth.

Objectives

The key objectives of the proposed project that is going to enhance the SME internationalization are:

1) To establish APEC model indices to measure SMEs’ level of internationalization in an economy; and

2) To diagnose and the SME internationalization status of six APEC economies and to collect relevant Data, as a process of examining the feasibility of the indices in the region; and

3) To devise a set of recommendations for APEC economies to build capacity for successful internationalization.

Alignment

This project contributes to the general goals of APEC enhancing regional economic integration and comprehensive connectivity. This also supports 2013 Leaders' Declaration on enhancing “SMEs global competitiveness by improving access to finance and markets and empowering SMEs to expand to international markets and to participate in global supply chains." 

The project aligns with the priority and objectives set by the SMEWG Strategic Plan 2013-2016 regarding Business Environment, Market Access and Internationalization. It is also in line with the Joint Ministerial Statement of the 21st APEC Small and Medium Enterprises Ministerial Meeting, quoted from item 25: “We requested officials to continue to share best practices of their respective area of expertise, including management capability development, entrepreneurship and innovation, financing, business environment, market access and internationalization. We recognized the promotion of standards and conformance as one of the priorities of the SMEWG from 2015.” 

Lastly, during the 39th meeting of the APEC SMEWG, APEC SMEWG stressed the importance of data collection and submission to APEC regarding APEC exporting SMEs, and the need to further study SME internationalization. Accordingly, the Chair of the 39th SMEWG meeting proposed that a lead economy put forward a concept note on an SME Internationalization study. 

This project will directly contribute to the above priorities, objectives and goals, eventually increasing the awareness of SMEs and policymakers to provide sound basis for internationalization in the APEC region. This project aims to develop such SME internationalization indices for APEC economies, one that will offer diagnoses of their levels upon which making policy recommendations can be facilitated.

TILF/ASF Justification

Not Applicable.

Beneficiaries and Outputs

Outputs:  The main outputs to this project are as follows:

1) APEC SME internationalization model indices that set out:

a)  Definition of internationalization based on theoretical review and field interview

b) theoretical framework based on detailed reviews on internationalization activities

c) Methodology for measuring and categorizing the SME internationalization

d) Model indices to be applied for estimating the SME internationalization of APEC member economies

2)  Data collection from pilot studies:

a) Data and survey results of participating APEC economies that have been made in measuring the SME internationalization

b) Various information on the internationalization activities, policies and policy demands of their SMEs

3) A research paper which includes: 

a) A comparative analysis on the SME internationalization, characteristics and best practices of the participating APEC economies

b) Policy recommendations

Outcomes: The expected outcomes from this project are as follows:

1) Increased awareness of the importance of SME internationalization in the APEC region

2) Full awareness of the methodology for the estimation and data collection of SME internationalization, among APEC economies, in process of and with reference to pilot studies

3) Capacity building of APEC economies regarding the self-diagnosis and policy-making of SME internationalization 

4) Consideration for the possibility of the periodic survey and data collection on the basis of APEC SME internationalization model indices at the APEC level over the long-term.

The outcomes of #1 to 3 will be achieved in two ways:

1) a brief meeting, to be scheduled at the margins of SMEWG 41 meeting in the Philippines in September 2015, which focuses on explaining the APEC model indices and the guidelines to pilot projects (methodology to application); and

2) the completion paper that includes the APEC model indices and the six pilot project results, of which the latter could be a model of the economy's self-diagnosis on internationalization. The outcome #4 is also critical, which will be achieved through the possibility being dealt with in the completion paper and though the later APEC project of 2016 being conducted to expand the scope of indices and indices application or data collection. This will eventually reach at the periodic survey and data collection at the APEC level over the long-term.

Beneficiaries: This project will benefit all APEC member economies, both public and private stakeholders, by presenting SME internationalization model indices and by sharing benchmark best practices. Direct stakeholders would include policymakers, local and international agencies of export/investment promotion, SMEs and business owners, and international organizations. The PSU could also utilize the SME internationalization model indices as a resource for making APEC strategies and policy decisions for facilitating SME globalization. Academia is also a direct stakeholder such that it will have a systematically devised tool for measuring the SME internationalization for the first time, paving a way for further development or elaboration in the academic aspect.

On the other hand, SMEs and business owners are indirect stakeholders who would have more efficient or improved opportunities for overseas expansion by changes in policy.

Dissemination

All relevant materials will be provided to the SMEWG focal points and other main stakeholders of the APEC member economies in electronic format. The project report will be posted on the websites of APEC Publications and the APEC SME Innovation Center.

The target audience is government officials and policymakers, local organizations supporting SME's overseas expansion, international organizations, and SMEs or business owners.

Moreover, the research team will make efforts to disseminate the outputs of this project in both academic and practical fields. It will deepen the outputs more academically to present at international conferences or to publish in well-known journals. It will also remind worldwide experts and practitioners of the importance and current situation of SME internationalization by presenting the outputs at the Annual World Conference hosted by the International Council for Small Business (ICSB).

However, there is no intention to sell any project outputs.

Gender

This project will consider the participation of women as well as men in project activities and cooperation, especially in selecting contractors or local consultants and in research, interviews or expert advice.

Work Plan

         Timeline

                                                      Schedule

March –

June 2015

Conduction of prior study in Korea (self-funded)

- Development of the SME internationalization model indices

- A case study on Korean SMEs

July –

August 2015

Circulation and elaboration of the SME internationalization indices that have been developed

in prior research via sharing to modify them with APEC member economies

September 2015

Selection of six participating economies to conduct pilot studies using the SME nationalization indices

* The notice of selection will be announced during the circulation of the model indices to APEC economies for elaboration (July - August 2015). Volunteers are welcome who are acquainted with the indies and express strong interests in the pilot projects.

  ** The size of data-set has was not decided yet, but possibly it would be about 500 - 700 SMEs each Economy  (e.g., survey) . As well, the studies will include formal data-set that are announced by governments, relevant export promotion organizations, and international organizations.

Making of a brief meeting with local  consultants to share the guidelines to pilot studies (at the margins of SMEWG 41 meeting in the Philippines)

October – December 2015

Conduction of pilot studies (data collection and case study)

Early January – Mid-January 2016

Collection of pilot study results from participating economies

Mid-January 2016 – Mid-March 2016

In-depth analysis of the pilot study results in Korea to categorize participating economies by internationalization level or type and to explore best practices

Preparation for the draft of completion report, including policy Recommendations

Mid-March - April 2016

Circulation of the draft report to APEC member economies to get comments

Finalization of the completion report reflecting their comments

TBA

APEC SME internationalization Workshop (at the margins of 2016 SMEWG meeting in Viet Nam)

May 2016

Making online publications of the SME internationalization indices and completion report available

Risks

The main project risk is the possibility of the process being delayed or the quality of the studies being low or inconsistent among participating economies  during pilot studies.

In order to avoid such risks, the Project Contractor will provide  local consultants with detailed research methodology guidelines (e.g. scope of SMEs and industry, data collection, terminology). Korean research team will thoroughly examine the characteristics of SMEs and industries of APEC economies to define the guideline scope for the pilot studies, so that any possible error does not cause a bias in the study results. The Project Contractor will also check the availability of both formal and informal data as to SME internationalization, searching for ways that missing data could be collected through the survey or official organizations. Then, , it will circulate a draft of the guidelines to stakeholders in advance for comments. It will also regularly check the timeline and process of the study and closely cooperate with local consultants to resolve issues, if any, that may arise during the studies.

In addition, there exists the risk that the project outputs may not be adopted into practical usage. Accordingly, at the initial stage of this project - the model indices development, the research team will focus on converging the interests or comments of direct stakeholders. It will also maximize to collect policy needs from six participating economies during the pilot studies and develop various policy options for their practical usage. All questions or requests are welcome regarding the application of the model indices to each economy, as well. The research team will support the economy even after this project has been completed. Lastly, a later APEC project could be proposed as a form of workshop or seminar where all APEC economies participate to really apply the indices, discuss each economy's problems, and share best practices in SME internationalization.

Monitoring and Evaluation

The Project will adhere to APEC project implementation procedures, including the timeline of actions as well as regular reporting. Prior to the project implementation, Project Overseer will coordinate with co-sponsors to monitor the project’s process and outcomes.

One indicator of success is the timeline - whether or not each stage was completed in the scheduled time. Moreover, at the stage of the APEC SME internationalization model indices development, it will be checked whether the (potential) model indices developed were circulated to all APEC economies, and received positive responses from over half of them including co-sponsors. At the stage of pilot projects, it will be checked whether six pilot projects were really conducted and whether questionnaires were completed consistently following the guidelines. The draft of the completion report will be reported, and its quality will be evaluated later, at the survey after the end of this project. Regarding dissemination, the research team will present the completion paper outside the APEC as well, of which the success indicator is the number of presentation and publication - at least one time at academic and practical(e.g., ICSB) conferences and in one well-known journal.

A survey will be circulated after the project to evaluate the outputs and to identify future activities. Co-sponsors will be invited to offer comments and recommendations.

Linkages

Regarding this topic, Korea is involved in the Investment Expert's Group (IEG) and the Market Access Group (MAG) of APEC and in the International Council for Small Business (ICSB), a worldwide network of SME researchers, policymakers, and practitioners. For the IEG, Korea could ask information on trade and investment of APEC members or share project outputs which would be helpful. For the ICSB, Korea will closely communicate to share academic/practical insights in model index development and to explore various policy options.

SME internationalization indices have been rarely dealt with, if at all, at the economy level. Although there exist indies and surveys in EU, they are not directly applicable to APEC member economies where the level or characteristics of economic development is diverse. Recently, PSU has sought cooperation on bring together relevant information and data. In this situation, this project will build on the PSU’s Policy Brief on "SMEs Internationalization and Measurement" in order to be a core component in the diagnoses of SME internationalization in the APEC region, and ultimately at the global level.

APEC is the best resource for funds in this project, where this aims to build the indices applicable to APEC SMEs and to examine the indices’ feasibility or applicability. That is why this project includes pilot studies on some member economies as essential part of this project.

Sustainability

The Project Overseer and research team will make efforts to share project outputs with stakeholders after the completion of the project. Accordingly, stakeholders could easily apply the APEC indices for self-diagnosis and implement policies, utilizing policy recommendations and best practices to be suggested in this project. APEC also could refer to or reflect project results when making new priorities, strategies and policy paradigms. The awareness of benefits could be evaluated through the interests and enquires expressed by the stakeholders.

Possible next steps to build on outputs and outcomes will be extended research and workshops, including non-participating as well as participating economies of this project. Such research and workshops would be possible as the form of a later APEC project of 2016 if there exist  interest and support from APEC members on completion of this year project. Following these steps, research could be done regarding all APEC members or each economy’s self-diagnosis on its SMEs, using the APEC indices and sharing the results best practices at workshops. This would be particularly helpful for achieving the long-tem in Question 6 (4) and managing the risk of no practical usage in Question 10, upgrading the SME internationalization level and maintaining the sustainable development in this region.

Project Overseers

Jo, Nae Kwon
Director
Small and medium Business Corporation (SBC)
Tel: 82-55 7519736
Fax: 82-55 7519729
Email: cnk@sbc.or.kr

Jo, Nae Kown is a head of Global Cooperation Department of Small & medium Business Corporation (SBC).

Since he joined SBC in 1986, he has been actively engaged in a number of SME supporting programs and projects. The Small and medium Business Corporation (SBC) is a non-profit, government-funded organization established to implement government policies and programs for the sound growth and development of Korean SMEs.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

a) Contractor’s staff (1 person x 800 hours) will be responsible for the project development and implementation, monitoring and control of the process the planned results and outputs;

b) Local  consultants (6 person x 800 hours) will be responsible for collecting data on the APEC internationalization model index and analysing the relevant policies or situations of each economy ;

c) Researchers on index development (3 persons x 240 hours) will be involved in research on internationalization activities and relevant theories/cases and in special interviews with stakeholders;

d) Researchers on comparative studies/policy recommendations (5 persons x 320 hours) will be involved in a comparative analysis based on the pilot study results and in a comprehensive research on internationalization promoting policies to recommend the participating economies with various policy options;

All direct labour costs will be contracted out as one single contract with one contractor covering all contractor services.

Waivers

Not Applicable.

Are there any supporting document attached?

No 
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Version HistoryVersion History

Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

Proposal Status

Originating Sub-Forum

Approval Status
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