UTCC: 70% of SMEs not ready for AEC

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BANGKOK, 15 February 2012 – The University of the Thai Chamber of Commerce (UTCC) revealed that over 70% of SME entrepreneurs are not ready for the ASEAN Economic Community whereas nearly 93% of large-scale businesses are.

UTCC’s International Trade Studies Centre Director Aat Pisawanich disclosed the result of a survey on the readiness and comprehension of Thai businesses towards the AEC. The survey, which was conducted on 1,000 entrepreneurs in the production and service sectors, indicated that 73.3% of SME entrepreneurs are not yet prepared to compete in the AEC while only 26.7% say they are. On the other hand, 92.6% of large-scale businesses are ready for the upcoming competition, while only 7.4% stated the opposite.

The survey found that businesses related to finance, tourism, food and accommodations are ready for the AEC in terms of capital, personnel, technology and management quality. Meanwhile, the agricultural sector is partly prepared in the areas of produce quality, service, retail-wholesale trade and logistics. In contrast, such sectors as industry, construction, telecommunication, transport, education, health and spa are not at all prepared for the regional economic integration.

When asked about their knowledge about the AEC, 87.7% of large enterprises indicated that they understand the details of the AEC. The ratio was an increase from the 24.7% in 2010. However, more than half of SME entrepreneurs still lack knowledge about the AEC, especially the agricultural sector.

Regarding the reason as to why they lack knowledge on the subject, 49.6% pointed their fingers to the lack of information provided by relevant authorities, followed by the difficulty of the information (13.5%) and the ambiguity of the information (13.5%).

In addition, Mr. Aat stated that if no action were taken to educate SME entrepreneurs, by 2015 Thai SMEs would be overtaken by ASEAN businesses while only large-scale Thai businesses would remain in the ASEAN Community.