According to Facebook’s new Future of Business Survey report, online tools play a role in small and medium enterprises (SMEs)’ ability to trade internationally and consequently to grow. However, the report added that SMEs in Malaysia that trade internationally are less positive about their business outlooks, compared with non-traders. In a statement today, Facebook said the report found for export-based SMEs in Malaysia, trade is at the core of their business models and success, which among exporting SMEs, 4 in 10 (41%) reported more than 25% of their revenue came from international trade.
“SMEs attribute growth — in revenue, resources, and employees — to their use of online tools to trade internationally. More than half of exporting SMEs (54%) report that more than 75% of their international sales depend on online tools. 65% of exporters agree that using online tools for selling internationally has increased their revenue,” the report said. However, Malaysian SMEs that trade internationally are less confident about their business outlook, with only 48% of traders in comparison to 56% of non-traders being positive about their current business state, said Facebook. On the other hand, more traders than non-traders (23% versus 16%) have created jobs in the past six months, but about as many traders as non-traders plan to create jobs in the future six months (50% versus 45%), said Facebook.
Facebook said the report revealed international trade is a challenge to SMEs, and only a minority of SMEs trade internationally (17%). Furthermore, nearly half of exporters (45%) identified “selling to foreign countries” as a challenge. “In our digitised global economy, the use of online tools such as online shops and communicating with suppliers online is a matter of course. Access to online tools has the potential to streamline business processes, provide access to new markets and customers, or make it easier to deal with authorities and thus can help businesses grow,” said Facebook. For instance, 29% of businesses report that poor online payment alternatives make it difficult to do business online across borders, said Facebook.
Facebook added policy makers and the corporate sector could work to build online payment tools that facilitate cross-border financial transactions in a seamless and risk-free way. In addition, Facebook said policy makers should work to encourage regulatory frameworks that further facilitate SME trade, including standardising trade regulations across countries to allow SMEs to manoeuver multiple markets, without being hindered by costly certification procedures; reducing burdensome customs regulation and encouraging e-commerce. When businesses have the tools they need to reach new markets and overcome regulatory barriers, business revenue and economies grow — it’s a win-win for all, Facebook said.
Developed in collaboration with the Organisation for Economic Co-operation and Development (OECD) and the World Bank, the Future of Business report is an initiative to deliver timely insights and trends on online SMEs, based on an ongoing online survey of more than 60 million SMEs from 42 countries that have an active Facebook business Page and includes both newer and longer-standing businesses, spanning a variety of sectors, Facebook said. First launched in February 2016 in 22 countries, the Future of Business Survey is part of Facebook’s commitment to help small and medium businesses (SMBs) capitalise on insights and digital tools to increase growth, Facebook added.
The report now represents 42 economies, accounting for 40% of the world’s population and The Future of Business Survey is a new source of information on small and medium-sized enterprises (SMEs). Launched in February 2016, the monthly survey – a partnership between Facebook, OECD, and The World Bank – provides a timely pulse on the economic environment in which businesses operate and who those businesses are to help inform decision-making at all levels and to deliver insights that can help businesses grow. The Future of Business Survey provides a perspective from newer and long-standing digitalized businesses and provides a unique window into a new mobilized economy.
Source: FBS Report