Owners of small and medium-sized enterprises (SMEs) in South and Southeast Asia are optimistic about their economic growth prospects in 2022, but many remain wary of risks caused or magnified by the pandemic, according to the Sun Life Asia Business Growth and Resilience Index.
In late 2021, Sun Life surveyed about 2,400 SME owners from Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore and Vietnam to determine the overall business growth and resilience index scores for South and Southeast Asia. Jay Sala, head of strategy, investment management and client impact at Sun Life Asia, said the project aimed to understand how business owners feel about their growth prospects and how well protected they are against business risks, especially in the time of COVID-19.
The Sun Life survey showed a generally optimistic outlook among respondents in terms of their business growth prospects, illustrated by the following results:
- 74% expect the financial position of their business to improve in 2022
- 70% expect their national economic situation to also improve in 2022
- 84% plan to expand or grow their business in 2022, with the top plans being to expand their product offering (44%), digitise to grow the business (30%), hire new employees (30%), and expand into new industries (22%)
These results translated to an overall growth index score of 65 out of 100, revealing that business owners have a positive sentiment regarding their financial position, growth plans, and the present economic situation.
The survey also delved into business owners’ perceptions of different business risks and their level of preparedness, revealing the following:
- 46% of respondents said that the pandemic has had a negative impact on their business, while 19% said their business fared a lot better in the pandemic
- more than 90% had adapted their business strategy to navigate the pandemic, including adding new methods of distribution (51%), virtualising the business (43%) and offering new products (33%)
- pandemic and health-related risks (51%), decreasing demand (43%) and increasing market competition (41%) were identified as the top three risks facing SMEs
With an overall resilience index score of 55 out of 100, business owners in South and Southeast Asia are tempering their optimism for 2022 due to their borderline level of preparedness against risks.
“The pandemic has created tremendous challenges for businesses over the past two years, so we are glad that business owners now see a more positive outlook for 2022,” Sala said. “It shows that SME business owners have a healthy level of optimism for improved growth prospects this year, but this is counterbalanced with the knowledge that they are still more vulnerable to some risks than they would like, particularly the impacts of the pandemic. Successfully navigating the turbulence requires equal measures of planning for growth and building resilience.”