access_to_financing_apec_kim.ppt
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Access to Financing for SME Innovation
in APEC 2008 INSME Annual Meeting
Guangzhou (Canton), China
July 2-4, 2008
2
Introduction
• Research objective
• Research framework
• Research approach
• Selection of 10 member economies
3
Research objective
Promoting innovative SMEs in APEC
ForFor
Innovating products, processes, marketing and organizational efficiency of SMEs in APEC
By By
Studying and disseminating SME innovation policies and best practices in APEC
Identifying coherent environment conducive to SME innovation
ThroughThrough
4
Research framework
Policy and Program
Financing: Equity Financing, BANs, Loan, Guarantee, Certification
Marketing: Government procurement, Exportation, FDI
HRD: Recruit, Training
Technology: Collaborative Development, R&D Tax, Grant
SSME(Start-up SME)
Management Innovation: Counseling, Informatization
Clustering Policy, Domestic and Global Linkage
Economic Macro view
Infra-structure
ESME(Established SME)
Policy and Program
Financing: Equity Financing, BANs, Loan, Guarantee, Certification
Marketing: Government procurement, Exportation, FDI
HRD: Recruit, Training
Technology: Collaborative Development, R&D Tax, Grant
SSME(Start-up SME)
Management Innovation: Counseling, Informatization
Clustering Policy, Domestic and Global Linkage
Economic Macro view
Infra-structure
ESME(Established SME)
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Research approach
Stage 1: literature review in April, 2006 Stage 2: questionnaire survey in June, 2006
Mail to 10 member economies Stage 3: expert forum in June, 2006
Preliminary forum with 7 member economies Stage 4: interview survey in July, 2006
Visit to 10 member economies Stage 5: final reporting in December, 2006
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Selection of 10 member economies
2005 2003 2003 2003 2005 latest years latest years
Small andmedium-sizeenterprisesCompetitiveness
High-techexports(mil.US$)
High-techexports(% ofmanufacturedexports)
Totalexpenditure onR&D(mil.US$)
Funding fortechnologicaldevelopment
GDP per capita(US $)
GDP (US bil. $)
Hong Kong 8.13 1,845.37 12.65 1,097.98 6.91 25,006.00 174.00 USA 8.10 160,211.70 30.80 284,584.30 7.71 41,815.00 12,365.90 Chinese Taipei 7.78 6,996.92 6.99 14,857.00 335.20 Australia 7.44 2,760.31 13.77 5.77 33,629.00 692.40 New Zealand 7.04 471.11 10.20 929.41 5.64 26,373.00 108.70 Canada 6.56 23,129.04 14.02 16,704.64 6.94 33,648.00 1,084.10 Chile 6.41 109.94 3.38 504.36 4.79 6,807.00 105.80 Singapore 6.34 71,420.85 58.74 1,965.60 7.90 27,180.00 116.30 Malaysia 5.22 47,042.21 58.41 6.15 4,989.00 129.40 Japan 4.68 105,454.40 24.05 135,315.72 6.58 36,841.00 4,694.30 Thailand 4.66 18,203.16 30.20 373.61 4.81 2,736.00 178.10 Philippines 4.55 23,942.09 73.59 0.00 4.18 1,088.00 95.60 Korea 4.52 57,160.71 32.14 16,010.58 6.16 16,897.00 819.20 China 4.42 107,543.32 27.09 18,600.94 3.92 1,416.00 1,851.20 Indonesia 3.86 4,580.33 14.46 3.25 1,237.00 280.90 Mexico 3.78 28,733.68 21.34 2,542.17 3.15 6,920.00 734.90 Russia 3.48 5,327.40 18.86 5,767.81 2.91 5,015.00 719.20 Peru 1.82 2,798.00 78.20 Vietnam 610.00 51.00 Brunei 15,764.00 5.70 Papua New Guinea 39.42 585.00 3.50
average 5.70 41120.98 26.94 35099.57 5.51 14581.48 1172.55
© IMD WORLD COMPETITIVENESS YEARBOOK
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Financing policy
• Equity financing
• Debt financing
• Financial system stage
• Comparison
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Financing Policy Framework
Element Sub-element Contents
Equity Financing
Government equity program
Governmental special-purpose funds for innovative SMEs or venture firms
BANs Providing communication channels to business angels, venture capitalists, investors and entrepreneurs
Debt Financing
Direct loan program
Loans with favourable interest rates or often with long-term fixed rates
Credit guarantee program
Official guarantee about SMEs to
financial institutions
Certification of SMEs
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Equity financing Government equity program
Korea established the fund of funds program in 2005 Chinese Taipei initiated the ‘SME Incubation Investment Trust Account
s’ in 2003 Japan invests into limited partnership for venture capital investment Malaysia established two venture capital funds in 2000 Australia started the Innovation Investment Fund program in 1997 Thailand raised the OSMEP Venture Capital Fund in 2003
Indirect equity investment: role of investment networks through BANs Canada and China build networks with angel investors and venture cap
italists for high tech SMEs and start-up firms in incubators Mexico installed the SMEs Investor Club
No equity investment Philippines
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Debt financing
Direct loan program Japan provides direct loan through 1) the Japan Finance Corporation for
Small Business, 2) National Life Finance Corporation, and 3) the Shoko Chukin bank; Japan’s Credit Guarantee Corporations and JASME
Korea provides policy loans to SMEs; Korea’s Credit Guarantee Fund (1976) and Technology Credit Guarantee Fund (1989)
Malaysia created SME bank in 2005 for financing and credit guarantee China provide direct loans from the Innovation Fund (1999) and from the
Funds for SME Development (2004) Philippines established Small Business Corporation (1991) Mexico operates the National SME Guarantee Program (2001) and Seed
Capital Program (2005) Credit guarantee program
Chinese Taipei does not provide direct loan programs, but established SME Credit Guarantee Fund (1974)
No direct loan program Australia and Canada have market-oriented financial systems Thailand has no direct loan programs unlike other developing member ec
onomies and most of Asian member economies
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Financial System Stage
Stock Market Capitalization Stock Market Survey
Whether stock markets provide adequate financing to companies. Max is 10.
Venture Capital Survey Whether venture capital easily available for business
development. Max is 10.
Source: IMD World Competitiveness yearbook
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Stock Market Capitalization (Y2004)
Source: IMD World Competitiveness yearbook
115441
29172190
4293678
6401178
776
0 1,000 2,000 3,000 4,000
ThailandC. Taipei
Philippines Mexico
Malaysia Korea Japan China
Canada Australia
US$ billions
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Stock Market Survey (Y2004)Whether stock markets provide adequate financing to companies. Max is 10.
6.616.8
4.784.18
6.335.69
7.04
4.537.81
7.98
0 5 10
Thailand
Chinese Taipei Philippines
Mexico
Malaysia Korea
Japan China
Canada
Australia
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Venture Capital Survey (Y2004)Whether venture capital easily available for business development. Max is 10.
5.006.40
3.573.38
6.564.40
5.53
2.926.52
6.25
0 5 10
Thailand
Chinese Taipei Philippines
Mexico
Malaysia Korea
Japan China
Canada
Australia
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Comparison of Financing Policy
Financial SystemStage
High •Australia •Canada •Japan
Med •Thailand •Korea•Chinese Taipei•Malaysia
Low •Mexico•China
•Philippines
Governmentequity program
BANs-centered
Loan Only Loan + VC
Investment-focused Loan-focused
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Summary
• Summary
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Summary
Economies in investment-focused group They provide only small proportion for systematic direct loan facil
ities These economies do not have special banks nor credit guarante
e institutions They directly involve in creating venture capital funds or actively
participate in the network formation of venture capitalists Economies in loan-focused group
Their financing programs are centered on special banks or guarantee institutions
Recent years, these economies (except the Philippines) have created equity investment programs targeting high-tech innovative SMEs.
Japan, Korea, and Chinese Taipei have the longest history of governmental loan programs
Malaysia and the Philippines have relatively newly established the public loan systems after the Asian crisis
