Building the regional highway for Asean SMEs

Why is it that most micro and small entrepreneurs (MSEs) rarely seem to scale up? Successful MSEs – those who eventually grow into medium or large enterprises – have shown that scaling is possible. Yet, for many entrepreneurs, it remains the exception rather than the rule. The question is not whether scaling can happen. It’s why it so often doesn’t.

One explanation offered – especially in the Philippine context – is that many MSE owners are simply content as long as they are earning. If the business is stable and able to cover day-to-day needs, then the motivation to expand can be low. From their perspective, scaling up may feel unnecessary. Why add layers of complexity when everything is already chugging along at a manageable pace? Why “rock the boat” when the boat, however small, is still afloat?

That mindset is understandable and rational. Scaling up means taking on higher fixed costs, managing bigger inventories, hiring more people, dealing with stricter compliance requirements and sustaining performance in markets that may be less forgiving than the ones currently served. It also means confronting uncertainty.

Still, I believe this is precisely the gap that mentorship should address. When a seasoned entrepreneurship mentor looks at a small business operation, the mentor doesn’t only celebrate what is already working. The mentor helps the entrepreneur see the growth potential more clearly. More importantly, the mentor helps identify the barriers that keep the business from expanding – whether those barriers are financial, operational, managerial or market-related – and then discusses realistic solutions to overcome them.

This is exactly what we experienced whenever Go Negosyo deployed our free entrepreneurship mentoring events across the Philippines. The specifics varied from one group of entrepreneurs to the next, but the unifying thread was consistent: the MSMEs who came to our events believed that scaling was possible. That belief mattered. It signaled that many entrepreneurs were not truly “satisfied” in a passive sense. Deep down, there was a desire to improve, to get better and to move beyond merely surviving.

Maybe that desire is part of what makes entrepreneurs, entrepreneurs. After all, they already took that first leap of opening a small business. Surely, the dream did not stop there. Perhaps they just need the conditions that make the next step less intimidating, and find the motivation and confidence to take the larger leap.

I continue thinking about these questions because I believe we may be on the cusp of a game-changing development for MSMEs. In 2017, when I first became chair of the ASEAN Business Advisory Council, we decided to establish the ASEAN Mentorship for Entrepreneurs Network (AMEN) as our legacy project. We wanted this initiative to serve as a meaningful contribution to the Philippines’ chairmanship – one that could help upscale the small and medium businesses of the ASEAN region by building on what we had already learned through our own Kapatid Mentor ME program (KMME), which we successfully implemented in collaboration with the Department of Trade and Industry. It is widely described as the MBA for entrepreneurship: a structured, formal training program designed to help small and medium entrepreneurs scale their businesses.

Thousands of Filipino entrepreneurs benefited from KMME. And when AMEN launched, hundreds of entrepreneurs across ASEAN also gained access to the same spirit of capacity-building and practical guidance. AMEN helped entrepreneurs make better decisions, while recognizing that scaling requires access to money, markets and mentorship.

AMEN becomes even more relevant now, because the ASEAN region may yet see a world’s first in the final quarter of 2026: a region-wide, legally binding digital economy pact. If realized, this pact would harmonize rules across critical areas – e-commerce, digital payments, cybersecurity and cross-border data flows. In other words, it would reduce the fragmentation that often makes cross-border trade difficult, costly and risky for smaller businesses.

Just last month, we concluded negotiations for the ASEAN Digital Economy Framework Agreement (DEFA). We resolved outstanding issues and marked a major shift away from disconnected, inconsistent digital policies toward a unified, rules-based regional framework. We are much closer to building the actual mechanisms that will see DEFA come online.

We are now closer to the prize of regional economic integration, made far more possible by digital technology. When private sector partners in ASEAN came together decades ago to form the ASEAN-BAC, we already believed that integration could bring benefits to our economies. But today, technology has turned that belief into something more immediate and urgent. Global economic conditions are placing stronger pressure to get the details right – and right away.

This is where AMEN fits naturally. With AMEN in place, it becomes easier for SMEs to navigate life in DEFA. As cross-border data flows open up, as expectations for AI compliance become clearer and as digital payment interoperability improves across borders, SMEs will need mentoring on what to do differently and what to prepare for. AMEN can become a capacity-building mechanism for entrepreneurs to get the practical support to capitalize on DEFA.

Imagine a small business in Bulacan trading with a retailer in Jakarta. Under a more connected and harmonized digital environment, the business could face lower costs, fewer barriers and less administrative friction. What used to be difficult – or nearly impossible to contemplate because of regulatory and technological obstacles – is becoming more feasible as those obstacles come down one by one. Once this works, it can become that “giant leap” that makes ASEAN more attractive to investors who are looking for a stable, unified region where growth can be scalable to modern systems.

SMEs are especially well-positioned to take advantage of these developments. Across ASEAN, governments recognize their role in sustainable and inclusive development. Given this, SMEs must be prepared – given the right infrastructure, the right skills and the right mentorship – to plug into cross-border commerce confidently. With their sheer numbers and entrepreneurial energy, they can drive a revolution of digitally enabled business throughout the region.