A Lost Of Confidence Sentiment In Economy, Performance And Employment By Japanese SMES
Tokyo, May 27, 2008 -- UPS today announced the results of the 2008 UPS Asia Business Monitor (ABM), a survey of perceptions among small-to-medium enterprises (SMEs) in Asia regarding competitiveness.
This year's survey, the fourth ABM survey, entailed interviews with approximately 1,200 SME leaders in 12 countries and territories, including Japan, China, and India. It reports on the opinions and perceptions of SME leaders regarding a diverse range of issues, including economic growth, employment, growth in trade, competitiveness and concerns among small businesses, and anticipated effects of the global economic slowdown.
This year's ABM indicates that Asia's SMEs are shifting from an optimistic attitude to a cautious one. By identifying such changes in perceptions and the issues confronted by SMEs, UPS will help SMEs to overcome their difficulties and improve their competitiveness.
Trade forecast: Reliance on America decreases even further relative to other regions
In this year's survey, regarding the forecast for growth in trade between their own country and other countries1, expectations regarding trade within Asia remain high, with 71% of SME leaders expecting an increase during the next year. For the Middle East (55%) and Europe (54%), the responses are on a par with last year's. On the other hand, for trade with America, the percentage of responses expecting growth has decreased from 51% last year to 39% this year, showing that an increasing number of SME leaders expect a decline in trade.
Regarding the impact of the US economic slowdown on their own business, respondents' opinions are divided2. While 43% overall expect this to become an obstacle, 48% expect it to have no impact. In Japan, 61% of respondents say they expect no impact.
Growth forecast: Japan's SMEs pessimistic about economy and own performance
Regarding economic growth in Asia, there is somewhat of a decline in optimistic perceptions3; the percentage of Asian SME leaders who forecast growth decreased from 57% last year to 52% this year. Japan shows the biggest decline in optimism among the 12 countries surveyed. Last year, 50% of SME leaders forecast growth, but this year, only 36% do so.
Regarding performance by their own business4, among respondents overall, the percentage of respondents expecting an improvement this year (64%) is virtually the same as last year (63%). By contrast, among Japanese SME leaders, the figure has dropped from 38% to 28%, showing clearly that SMEs have pessimistic expectations regarding performance by their own business.
Moreover, regarding plans to hire new employees5, only 5% of Japanese SME leaders say they plan to increase their workforce, a large decline from 34% last year. Also, 30% of SME leaders say they plan to reduce their workforce. Compared with the figures for all respondents (increase workforce: 49%, reduce workforce: 9%), these reflect very tough conditions.
Competitiveness: High rating for China's small businesses, followed by Japan and Korea
In response to the question of how competitive SMEs in other countries are relative to their own business6, SME leaders give China's SMEs the highest rating (62%), as last year, followed by Japan (59%) and Korea (53%).
Human resources are top-priority issue throughout Asia; Japan is cautious about hiring foreign workers
Among factors that influence competitiveness, obtaining capable staff is considered the most important throughout Asia. SMEs in Japan also respond that human resources are the most important factor (93%) and are in short supply (81%)7.
On the other hand, regarding the hiring of foreign workers, which is one option for supplementing the short supply of capable staff, 80% of Japanese SMEs say they are not considering it for upper or middle management, and even for labor-intensive jobs such as factory-floor work, 59% say they are not considering foreign employees8. This shows that Japanese SMEs have a negative attitude toward hiring foreign staff, even though they are aware of the importance and short supply of human resources.
Supply chain management among SMEs
Among the factors that influence the competitiveness of SMEs, in Japan, supply chain efficiency is not considered very important relative to other factors9. However, in response to the question of whether their own supply chain is being used efficiently10, 45% of Japanese SME leaders say, "Under-utilising the power of the supply chain" or "Neglecting the management of their supply chain." These figures are much higher than those for the respondents overall (28% in total). Only 13% of Japanese SMEs say their supply chain is "very effective in managing their supply chain." This figure is well below that of 30% for the respondents overall.
As issues regarding their own supply chain11, Japanese SMEs primarily mention difficulty in forecasting demand (31%) and lack of knowledge and expertise in supply chain management (26%). These results indicate that, while concern about supply chain efficiency is low among Japanese SMEs, such businesses do not possess the knowledge or means to improve their logistics efficiency.
The UPS Asia Business Monitor covers other perceptions among Asian SMEs in addition to the above. Please refer to the enclosed survey report.
UPS (NYSE: UPS) is the world's largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. The company can be found on the Web at www.ups.com.
1 UPS Asia Business Monitor 2008, p.6
2 UPS Asia Business Monitor 2008, p.9
3 UPS Asia Business Monitor 2008, p.3
4 UPS Asia Business Monitor 2008, p.4
5 UPS Asia Business Monitor 2008, p.5
6 UPS Asia Business Monitor 2008, p.15
7 UPS Asia Business Monitor 2008, p.23
8 UPS Asia Business Monitor 2008, p.38
9 UPS Asia Business Monitor 2008, p.23
10 UPS Asia Business Monitor 2008, p.33
11 UPS Asia Business Monitor 2008, p.34
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 2008 surveyed 1,201 decision-makers of SMEs between December 18, 2007 and January 24, 2008. Interviews were conducted by an independent research organization, 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), China (150), Hong Kong (100), India (100), Indonesia (50), Japan (100), South Korea (100), Malaysia (100), Philippines (101), Singapore (100), Taiwan (100), 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.
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