SHAWN HUNTER, SAMEER DESHPANDE, RON BEVACQUA , JEFF LIEW AND PETER MORGAN |
Small-scale enterprises play a pivotal role in the global economy, providing livelihoods for vulnerable populations and embodying resilience and creativity. However, these enterprises face significant challenges, particularly in the Pacific, where geographic isolation, cultural practices, and low population densities amplify barriers to growth. Access to financing, markets, and organisational support remains limited, constraining their potential.
Recognising these challenges, the Griffith Asia Institute, with funding from the Foundation for Development Cooperation (FDC), partnered with the Asian Development Bank Institute (ADBI) to explore how digital technology can foster growth-oriented small-scale enterprises. Collaborating with development banks in Samoa, Solomon Islands, and the Federated States of Micronesia (FSM), this initiative focuses on improving access to finance, education, and enterprise support systems.
Insights from the first phase
The initial phase of this project involved interviews with institutional stakeholders and surveys of both established and aspiring entrepreneurs in Samoa, Solomon Islands, and FSM. Key findings reveal that many small-scale enterprises operate as livelihoods rather than growth-driven businesses, often lacking formal models or expansion aspirations. This limits the impact of financial and organisational support.
Entrepreneurs often face demand-side constraints, operating in small markets with limited purchasing power. Most approach their ventures with a subsistence mindset, prioritising immediate financial needs over long-term growth. Access to financing remains a significant barrier due to inadequate collateral and financial records, forcing reliance on informal funding sources.
A complete overview of the research findings can be found in this report.
The role of digital technology
The research highlights the potential of digital technology to transform the entrepreneurial landscape in the Pacific. While many entrepreneurs recognise the importance of digital skills, adoption remains limited. For example, only 19.2% of established entrepreneurs and 22.5% of potential entrepreneurs reported access to computers or laptops. However, there is optimism about technology’s potential to enhance marketing, enable online sales, and facilitate digital payments.
Recommendations for strengthening the ecosystem
To better support small-scale enterprises, the report suggests the following interventions:
- Tailored Financial Products: Development banks should introduce accessible financial products, such as quick-response loans and overdraft facilities, designed to address the unique needs of small-scale entrepreneurs.
- Relevant Training Programs: Business development support should include digital literacy and e-commerce training to empower entrepreneurs to leverage technology. Incentives for adopting digital payment systems can encourage the shift to cashless transactions.
- Capacity Building for Providers: Establishing national and regional standards for business development services (BDS) can improve their relevance and effectiveness. Creating a “New Venture Building Hub” could showcase innovative business models suited to the Pacific context.
- Technological Integration: Expanding online support services enhanced by emerging technologies like artificial intelligence can provide tailored mentorship and market analysis, fostering innovation and growth.
Conclusion
The revitalisation of small-scale enterprises is essential for economic recovery and capacity building in the Pacific. By addressing systemic barriers and leveraging digital technology, stakeholders can create an ecosystem where entrepreneurship thrives. This transformation will not only strengthen individual enterprises but also contribute to broader economic resilience and development across the region.
This initiative exemplifies how collaboration between research institutions, development banks, and local stakeholders can pave the way for sustainable solutions tailored to the Pacific context. In its next phase, the research team intends to test specific interventions in line with the recommendations mentioned above.
Shawn Hunter, Associate Professor Sameer Deshpande and Ron Bevacqua are members of the Griffith Asia Institute, Jeff Liew is a Financial Inclusion Specialist with The Foundation for Development Cooperation and Peter Morgan is senior consultant at the Asian Development Bank Institute.More information and access to the report may be found on the Enhancing the ecosystem for entrepreneurship and innovation in the Pacific project page.
