Adapting to digital world a matter of survival for small businesses

The need for a stronger concerted effort among APEC economies and a more focused strategy for structural reforms, especially in harnessing modern digital technology to address economic challenges, has become more critical than ever amid the adverse impact of the COVID-19 pandemic.

For instance, if a shift to digital was a looming need a few months ago, it is now a stark reality. For some sectors of society, such as smaller businesses, it is a matter of survival, chair of APEC Economic Committee (EC) Dr James Ding said.

He said the EC provides support for advancing APEC’s agenda to help economies implement structural reform to stimulate economic growth and bolster trade and investment volume.

Thus, it could play an important part of the APEC region’s recovery.

“The committee has long embraced the idea of harnessing modern digital technology to solve problems. It is central to our work in structural reform  – that is, strengthening policy and legal infrastructure to make it easier to do business and improve economic conditions,” he said today.

He said there are many ways governments can employ simple digital solutions to help entrepreneurs affected by lockdown measures and disruptions in supply chains.

Take returns and dispute resolution, for instance, which, according to a study by the APEC Business Advisory Council, is one of the greatest challenges faced by micro, small and medium enterprises (MSMEs) when trading across borders, with 94 per cent of them reporting that as a problem.

Another study reported that as many as 35 per cent of cross-border disputes involving MSMEs remain unresolved, with the average value of the dispute being some US$50,000.

The EC’s Friends of the Chair group on Strengthening Economic and Legal Infrastructure (SELI) has been developing a work plan to promote online dispute resolution (ODR) — an innovative solution designed to aid small businesses who do business abroad, and who face significant hurdles when it comes to accessing justice in cross-border transaction disputes.

After years of development, APEC SME Ministers expressed support for the ODR Framework in September 2019, noting that it “will provide a cost-effective and efficient platform to resolve low-value cross-border disputes.

As of today, China; Hong Kong, China; Japan; Singapore and the United States have opted into it, while a number of economies are actively considering the possibility of joining.

ODR was designed to help small businesses navigate the global stage, but it is also particularly apt for resolving disputes when face-to-face meetings or physical hearings are neither encouraged nor allowed.

He said the ODR Framework is just one example of how modern technology and structural reform can help businesses of all sizes.

The EC will continue to find ways structural reform can contribute in the implementation of the APEC Internet and Digital Economy Roadmap, said Ding.

“We’re also in the process of preparing for the upcoming Structural Reform Ministerial Meeting, which will lay the foundation for the next phase of structural reform programmes for APEC economies from 2021 to 2025,” he added.

It will be an opportunity for APEC economies to explore how structural reform may help to revitalise the region’s economy after the pandemic and even reinforce it against future economic crises.

The 21 APEC economies are: Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, SouthSingapore, South Korea, Taiwan, Thailand, the United States of America, and Vietnam.

source: Bernama