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MANILA, Oct. 22 (Xinhua) -- Strengthening the dynamics of micro, small, and medium-sized enterprises (MSMEs) with innovation and internationalization is key to revitalizing Southeast Asian economies devastated by the COVID-19 pandemic, according to a new Asian Development Bank (ADB) report released on Thursday.

The Asia Small and Medium-Sized Enterprise Monitor (ASM) 2020 said that MSMEs are a critical driving force in Southeast Asian economies, accounting for an average of 97 percent of all enterprises and 69 percent of the national labor force from 2010 to 2019. They contributed an average of 41 percent of each country's gross domestic product over the same period, said the report.

"MSMEs in Southeast Asian economies mainly focus on domestic markets and their level of entrepreneurship remains suboptimal. Supporting the development of MSMEs, particularly in technology adoption and participation in global supply chains, will contribute to inclusive growth and aid in recovery efforts from COVID-19," ADB Chief Economist Yasuyuki Sawada said.

Sawada said the report, which provides a rich set of data and analyses on MSME development in Southeast Asia pre-COVID-19 pandemic, "would become a benchmark in helping design feasible government assistance for MSMEs amid a new normal in the region."

The first volume of ASM 2020 presents a detailed assessment of financial and nonfinancial issues facing MSMEs in Southeast Asia at both the country and regional levels. It also analyses policies and regulations surrounding MSME development and access to finance in each country in Southeast Asia.

Key findings from the report's second volume, to be released on Oct. 28, examines the impact of COVID-19 on MSMEs in Indonesia, Laos, the Philippines, and Thailand based on rapid surveys conducted from March to May this year.

The Manila-based bank said the challenges faced by MSMEs in the region have been exacerbated by COVID-19, with demand for MSME products and services declining since the onset of the pandemic. This has resulted in layoffs, reduced business operations, and a depressed outlook for the sector, the bank said.

The report explores policy approaches that could support MSMEs during and after the pandemic.

ASM 2020's remaining two volumes will be released by the end of 2020.