Small business key to Asia-Pacific growth

Hawaii’s economy stands to benefit from increased services across the region and improved sustainability under a plan that the APEC Business Advisory Council will present to 21 Asia-Pacific government leaders on Sunday.

ABAC officials, who presented their plan Thursday, said it will create conditions for prosperity and sustainability in the Asia-Pacific region by increasing access to finance for small-, medium- and micro-size enterprises (SMEs); address emerging issues in services, investment, innovation, supply chain and regulatory principles; and encourage leaders to commit further measures to promote green growth.

The plan "aims to spur growth, create jobs and ensure more people across the region benefit," ABAC Chair Deb Henretta said during a press briefing at the Sheraton Waikiki.

Earlier Thursday, Kauai Mayor Bernard Carvalho took advantage of an all-day ABAC SME Symposium at the Halekulani Hotel to try to make some global inroads for Kauai businesses.

"For the neighbor islands, what’s important here is today’s focus is about small businesses, and for Kauai, with the growing value-added products, we’re looking at how can we take our products between our state and the mainland to places like members of the 21 APEC countries," said Randall Francisco, president of the Kauai Chamber of Commerce.

"The mayor (Bernard Carvalho) this morning met one of the speakers from the panel who was from Malaysia, and so that was definitely a great opportunity. Our goal really is to see what we can do to help our locally based businesses. And what we just heard from the president of the Export-Import Bank, the thing he was focused on was "Made in USA." So the Kauai-grown, Kauai-made products are obviously programs that we’re looking at to tie in with the locally grown, support local, but also be part of the global village."

In addition to networking among fellow business people, many of the 150 attendees throughout the day heard the speakers and panelists stress the importance of "cloud computing" where data is stored outside the business’s premises on servers that are owned by companies like Google rather than being stored in-house.

"Cloud computing is not revolutionary; it’s simply the use of computing on the Internet," said Patrick Ryan, policy counsel, open Internet, for Google Inc. "There’s some reluctance (due to trust issues and the perception of giving up control) by small businesses to move data onto the cloud. For anyone who uses cloud computing, if one of the data services goes out completely, your data is not lost. In situations like the tsunami in Japan, a lot of data was lost and a lot of companies lost the opportunity to do business. But for those who already had moved to the cloud, their data was safe."

ABAC, in its plan, called access to finance the top barrier to SME trade, a significant roadblock since SMEs make up roughly 90 percent of all businesses and employ nearly 60 percent of the work force.

Henretta said Hawaii will benefit from the integration of services throughout the region, as well as the efforts ABAC is doing in sustainable development.

New Zealand-based Tony Nowell, regional economic integration working group chair for ABAC, said Hawaii faces some of the same challenges that New Zealand does given both areas’ geographic isolation.

"In the modern world, it’s very easy for small places like Hawaii or New Zealand to be bypassed, particularly when it comes to the flow of goods," Nowell said. "The old days when the aircraft had to stop here to refuel is gone. It now goes straight over top. What I think Hawaii can very much benefit from in the future is the work we’re going to do on services. For places like Hawaii or New Zealand, the virtual world opportunity is where I think you need to be focusing on more and more in the future. The services world can create a lot of jobs."

He cited the Philippines as an example where he said services have become a huge part of its economy and created millions of jobs.

"What we will be doing with services is free up the trade in services because there are too many restrictions today on the services being offered by one country being allowed to be used by another country," Nowell said. "You have to allow services to move in the virtual world or through labor mobility. Services are often encapsulated by people, so allowing people to move across borders more freely to actually offer that service is the important part."

Henretta said global economic growth is being hampered by strains on financial markets and the lack of progress in global rebalancing. She said this has resulted in high levels of debt and low growth and created disincentives for private sector investment and discontent among the public.

ABAC’s plan to promote green growth includes addressing tariffs and non-tariff barriers in environmental goods and services, creating market-based mechanisms to improve access to green technologies, and sharing best practices among APEC members to facilitate greater technology and products.

Meanwhile, a PricewaterhouseCoopers APEC CEO survey released Thursday showed that 60 percent of Asia-Pacific business leaders are "very confident" about revenue growth over the next three to five years and 94 percent of CEOs are to some extent focusing on innovation in order to succeed during that time frame. The survey polled more than 320 CEOs across 26 countries, including the 21 APEC economies, from July to September.