BUSINESSES will have to be more efficient and react faster to changing conditions as the economy emerges from recession, members of the closing panel at the Apec SME Summit said yesterday.

Being more efficient will help them plug into supply chains serving new markets, said Apec Business Advisory Council chairman Teng Theng Dar. This is particularly important as companies seek new demand beyond traditional markets.

'In particular, SMEs have to be more aggressive in using ICT (infocommunication technology) connectivity to make sure they are able to engage new market communities faster, more accurately and more efficiently,' Mr Teng said.

PCCW chairman Richard Li said: 'I think what the market is looking for is a quicker P&L (profit and loss) - a much quicker engine and delivery of products and services. So one has to look at applying technology that is readily deployable and immediately gives a competitive edge in the marketplace.'

The need to be quicker arises from the possibility that changes in the broader economic environment may happen more often than before. And in the face of drastic market changes, SMEs especially will have to shift quickly.

This could be advantageous to SMEs, given their small size and closeness to customers - traits described by UPS chairman and CEO Scott Davis at an earlier plenary session at the summit.

As for whether the economic recovery is 'real', Mr Teng, who is also CEO of the Singapore Business Federation (SBF), said the 'environment remains dusty'. And Mr Li said that in terms of consumption, the recovery is likely to be long and L-shaped as China's total consumption is still less than one-eighth that of the US. He is also concerned that half of venture capital funds may close in the next three years as they struggle with poor returns.

'That probably would affect more start-ups in the West, since many of the SMEs are not particularly dependent on venture capital money, with the exception of technology-related ones,' he said. 'The good news is that sovereign funds, as well as individual corporations in Asia, are relatively cash-rich and much less debt ridden. So a lot of the start-ups in China and in Asia are funded by private resources - friends and family, relatives - in that kind of equity financing.'

What is clear is that the future will see more integration. Procter & Gamble (P&G) Company India director Ashish Chatterjee said that innovation - where innovation partnerships happen outside of internal R&D - will be a growing trend. This is especially so if companies want to grow at double-digit rates, he said. It is not possible to have all the solutions within an organisation.

In the case of P&G, for instance, for every researcher it has, there are another 200 outside working in the same industry. 'So you cannot afford not to tap that body of knowledge,' said Mr Chatterjee.

This article was first published in The Business Times.