Expectations Are Higher for Trade with Asia and Middle East than the United States and Europe
UPS, the world's largest small package delivery company and a provider of supply chain solutions, has announced the results of its 2007 UPS Asia Business Monitor (ABM), an independent survey by UPS regarding the competitiveness of SMEs in Asia.
This year's survey, the third of its kind, covered SMEs in 12 Asian markets, including Japan, China, and India. SME managers were asked about their opinions and perceptions from a broad range of perspectives, including macroeconomic forecasts, business growth forecasts, the importance of each industry, SME competitiveness, the top emerging markets, and opinions regarding India and China.
Susumu Sanbonmatsu, Visiting Professor at Hitotsubashi University, and Senior Researcher, Organization for Small and Medium Enterprises and Regional Innovation, evaluated the survey as an expert on SME innovation. Regarding the survey's significance, Sanbonmatsu commented, "These results are enormously valuable as the one of a kind ABM survey offers unique insights into business enterprises in the Asia Pacific region."
Macroeconomic forecasts - Trade expectations heightening with regard to Middle East
The survey results show that, regarding their own country's economic growth, Asia's SME managers have even more optimistic expectations than last year. In particular, expectations were highest in China, where 92% of SMEs expect their country's economy to grow.
Regarding trade, as in last year's survey, the strongest opinion was that Asia will take the lead (74%), and similar expectations regarding the Middle East (54%) ranked second, exceeding those regarding the United States (51%) and Europe (53%). In Japan, however, only 31% of SME managers expected growth in trade with the Middle East.
Influence of emerging markets - China and India
Most of Asia's SMEs think that China will catch up with the United States as a global consumer market. Regarding when this will happen, 57% of Asia's SMEs responded "within a decade." However, in countries that have the most trade with China, such as Japan and Korea, SMEs think the timescale will be relatively long; in Japan, 65% of SMEs think it will take more than a decade.
Regarding India, 73% of Asian SME managers think growth in this country will boost the region's economy. Possible ways being considered to capitalize on India's development are as a manufacturing base (30%) and as an outsourcing of manufacturing processes destination (25%).
Factors that influence competitiveness - Innovation and Availability of a qualified Work Force are considered important throughout Asia
Japan's SME managers consider innovation and availability of a qualified workforce are the most important elements, but are seen as lacking. The result for Asia as a whole was similar. On the other hand, awareness of supply chain efficiency in Japan was much lower (59%) than in other countries.
A characteristic particular to the results for Japan was that few SMEs feel that their supply chains are being maximized to save time and costs (39%, as opposed to the Asian average of 71%).
This result may be related to social and historical factors as SMEs in Japan traditionally have a heavy reliance on forwarders for logistics. There is low awareness of logistical efficiency among those who ship. Moreover, businesses did not often sense the need to control inventory and logistics while sales were brisk due to post-war economic growth. Consequently, managers have not accumulated sufficient knowledge of supply chain management.
Brian Cusson, Senior Vice President of UPS North Asia District says, "Strategic control of the supply chain is essential to business efficiency. At UPS, we support innovation by SMEs through higher supply chain efficiency; for example, we offer not only express delivery, sea and air transport, and logistics services, but also services that incorporate logistics finance through UPS Capital*1. In addition, we offer UPS Trade Direct*2 service, which provides consolidation of freight, and direct delivery to multiple addresses overseas."
UPS Asia Business Monitor also covers the perspectives of Asian SMEs regarding numerous issues in addition to the above. For more information, please refer to the enclosed survey report, which is also available for download at www.upsinasia.com/abm/jp.
UPS, which celebrates its 100th anniversary in 2007, is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at www.ups.com.
*1 UPS Capital: The financial services business unit of UPS. Integrates financial and logistics services. These include factoring, which helps liquidize accounts receivable at an early stage, and credit insurance, which lowers risks of non-payment of trade invoices. Such services enhance customers' cash flow, reduce trade risks, and facilitate international trade.
*2 UPS Trade Direct: Ships directly to multiple addresses within a destination country. UPS Trade Direct combines freight consolidation, air/ocean transportation, customs clearance and deliveries to final destinations. Reduce time to market, bypass distribution center and reduce costs, also improve cash flow
Notes to Editors
- UPS ABM series provides the latest insights into the changing opinions, attitudes and habits of business leaders from the region's small and medium sized enterprises.
- UPS ABM 2007 surveyed 1,200 decision-makers of SMEs between November 15, 2006 and January 10, 2007. Interviews were conducted by an independent research organisation, TNS, in Hong Kong using the respondents' native language. SMEs are defined as companies with fewer than 250 employees.
- Interviews were conducted in the following 12 markets: Australia (100 respondents), China (150), Hong Kong (100), India (100), Indonesia (50), Japan (100), Korea (100), Malaysia (100), the Philippines (100), Singapore (100), Taiwan (100) and Thailand (100).
- Respondents were from a range of industries: automotive, electronics & electricals, garments & textiles, gifts & housewares, healthcare & pharmaceuticals, timepieces, jewellery & optical goods, toys & sporting goods, and others.
- A majority of the SMEs interviewed had an approximate annual turnover between US$500,000 and US$10 million. The average SME has been in business for nearly 21 years.
- The UPS Asia Business Monitor is available for download at www.ups.com/abm.
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