Micro enterprises

>> Friday, May 19, 2017

Ike Señeres

It is very inspiring that President Rodrigo Roa Duterte strongly advocated support for micro-enterprises during the recent summit of the Association of South East Nations (ASEAN) with the Philippines as the host country. We do not know what the other member countries will do in order to respond to his call, but it is a good call as any for the Philippines as a whole.
As a matter of fact, it is a clarion call or a call to arms so to speak, not only for the government to already take action, but for the entire private sector to take action as well, hopefully for them to make it their top priority. As we know it, the top business leaders of our country would always accompany the President in all ASEAN summits. This last summit however is very much different, because our country hosted it, and so we are doubly obligated to make the summit agreements happen.
 Reading between the lines, we could say that the promotion of micro-enterprises is really part of President Duterte’s business development agenda, but on closer look, it is very clear that it is actually part of his anti-poverty agenda. As it was originally referred to in the business sector, “Small and Medium Enterprises” (SMEs) was the original popular term but somewhere along the way, “Micro, Small and Medium Enterprises” (MSME) came up as an alternative term, wherein it was clearly understood that “Micro” is the category that is smaller than “Small”.
Interpreting these terms in some other way, it could be said that “Micro” is really the low end segment of what is “Small”, but that is really just a matter of perspective. As far as I am concerned however, I would prefer the term SME, and I think that that is alright, for as long as I will not neglect what is “Micro”.
 Under normal circumstances or shall we say as it is supposed to be, the promotion of, and the assistance to SMEs is the responsibility of the Department of Trade and Industry (DTI). Although that is the common wisdom, I would disagree with that perspective, because the business of SMEs involves a complete supply chain wherein “selling” and “manufacturing” (being the domains of DTI) are just parts of it.
Among others, the complete supply chain would involve training, financing, product positioning, labelling, packaging, advertising, promotions, distribution and logistics. These are really just the basic components of the complete supply chain, because there should also be advanced components such as computerization and automation, wherein the latter two would also include the use of electronic commerce and cloud computing.
 As I see it, aside from the DTI, the promotion of, and the assistance to SMEs should also involve the participation of many other government agencies such as the Department of Science and Technology (DOST), the Department of Information and Communications Technology (DICT), the Department of Transportation (DOTR), the Department of Interior and Local Government (DILG), the Department of Foreign Affairs (DFA), the Department of Social Work and Development (DSWD), the Cooperatives Development Authority (CDA), the National Anti-Poverty Commission (NAPC), the Design Center of the Philippines (DCP), the National Commission for Indigenous Peoples (NCIP), the Development Bank of the Philippines (DBP), the Philippine Postal Savings Bank (PPSB) and the Land Bank of the Philippines (LBP), among others.
Going back to the basics, the businesses of enterprises big and small are classified into “products” and “services”. This is the reason why I am advocating that the government should now form two working groups or task forces that would focus on these two classifications, given the fact that these two are really very much different from each other. Whatever the government has to do, it should have measurable goals, such as the target number of SMEs that could be created and supported, regardless of what classification they would fall under.
As expected, the government should take the lead in creating and sustaining the complete supply chain, but of course the private sector or more specifically “big business” should also take an active part, more so that Corporate Social Responsibility (CSR) programs are now compulsory on their part.
With the support of some private companies, it is now possible to assist some micro-entrepreneurs who would like to go into the business of food retail and street level distribution, with the help of some non-government organizations (NGOs) such as the Community Chest Foundation Incorporated (CCFI), People Management Association of the Philippines (PMAP) and Caritas Manila Incorporated (CMI).
The idea is to provide community based livelihood programs through CCFI, at the same time providing workplace based livelihood programs through PMAP and parish based livelihood programs through CMI. The idea is for these NGOs to identify the project beneficiaries. These are just small steps that will be taken, but hopefully, this will lead to bigger actions for the future. Hopefully, these programs could develop business models that could later on be replicated nationwide.

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