But as Søndergaard suggested, data is not like oil. For one thing, oil doesn’t go anywhere. It sits in the ground until it is brought up and used. It can be used all at once or just some at a time while the rest remains waiting. Oil can be stored forever (or at least for a very long time) without significant problems. Data, by contrast, is like an avocado. It has a clearly defined shelf-life. Data collected and used too early is pointless. Data harvested too late is often of no use at all. Søndergaard’s company runs what is billed as the world’s largest online wine marketplace. In his business, it does no good at all to rate a wine that does not exist as all the stock is gone or to recommend a wine to a customer that has already purchased something to drink for dinner. What matters is knowing what is needed in the moment when the information is “ripe.”
Policymakers should not assume that MSME firms will always stay MSMEs. Yet frameworks in many economies seem designed to trap smaller firms into a set category and entrench them into a “small” mindset. There will always be MSME firms. They form the backbone of most economies, as much as 97 percent of companies across Asia, employing the overwhelming share of workers. The goal of MSME policies should be enabling the current crop of smaller firms to grow, allowing firms in the “medium” category to reach large scale in relatively short order, while encouraging new entrants to the MSME ranks. Trade policy is one tool to help MSMEs grow. In most economies, the domestic market alone can be too small or even too competitive for success. E-commerce and digital technology, however, have allowed MSMEs to reach regional or global audiences.
E-commerce and digital trade are certainly upending retail patterns globally. It is important to note that these changes are not a random act handed down from the heavens. Instead, these changes flow from millions or even billions of companies and consumers increasingly demanding goods and services to be delivered digitally. The plan in India is to stop firms like Flipkart from selling goods in the market. This—it must be assumed—will help keep small, largely inefficient shops in business for longer and keep consumers spending more on products than they clearly would like. After all, if consumers did not want e-commerce goods, they would not be buying off Flipkart in the first place and would not be driving demand for more goods. Customers have clearly expressed their preferences. They are unlikely to completely abandon the corner shop, but their purchases are becoming increasingly diversified and digital orders play a key role. While India represents the more extreme end of regulations on e-commerce, other governments are starting to take actions to increasingly constrain the actions of players. Most are still aimed at large firms with limited understanding of the collateral damage to small firms and consumers.
Digital technologies have the potential to transform business in ASEAN. McKinsey Global Institute has estimated the total impact of technologies such as mobile internet, big data, cloud technology, and the Internet of Things, could unleash up to US$625 billion in annual economic impact in ASEAN by 2030. Micro, small and medium-sized enterprises (MSMEs) have the greatest potential to benefit from digital adoption given the ability of these technologies to overcome many of the typical barriers faced by MSMEs to exporting and growth, such as building a global business network and promoting their products overseas. However, a new report by the Asia Pacific MSME Trade Coalition (AMTC) warns that if certain key trade-related regulatory issues are not addressed, many MSMEs will not be able to capture this opportunity
As Bloomberg reported yesterday, rising trade tensions have made it more imperative than ever that companies remain engaged in crafting sensible trade and regulatory policies. Getting that job done, however, is unusually challenging in Asia. While there are many excellent organizations at different levels in the region—within some individual countries, across ASEAN and within APEC—what has been lacking is an institutional framework to collectively gather business input from Asia as a whole. Hence the need for a new grouping—the Asia Business Trade Association (ABTA). ABTA is a non-profit society, registered out of Singapore, to unite large and small firms from all across Asia in crafting a collective voice for companies on trade and regulatory issues.