Journal Of Small Business Strategy Impact Factor – With support, small and medium enterprises can support the growth of the economy. The government can help capture this opportunity.
Slow productivity growth is one of the biggest threats to economic growth in developed and developing economies, with a major impact on population growth, health issues such as lower incomes , increasing inequality and problems with loan repayments. In recent years, production growth has been established in many areas; A 2018 Global Institute (MGI) study of the seven Organizations for Economic Co-operation and Development (OECD) found that the decrease in average productivity growth, from 2.4 percent per year between 2000 and 2004 to 0.5 percent per year between 2010 and 2014. .
Journal Of Small Business Strategy Impact Factor
Small and medium-sized enterprises (SMEs) pose a manufacturing problem. In the same sector or in similar countries, the difference between large companies and SMEs can vary by a factor of two or more. In construction, for example, research shows that the difference between SMEs and large companies is 26 percent in France, 41 percent in Germany and 54 percent in Italy. In food and housing, the difference is smaller for Italy, at 29 percent, compared to 39 percent for France and 41 percent for Germany. This difference reaches 60 percent in Turkey and 80 percent in Greece in many places. And most of the world’s population works for SMEs – between 50 percent and 90 percent of the workforce, depending on the country.1 For example, Canada, Korea and China have more than 80 percent of private sector employees working in SMEs, according to. to OECD trade statistics.
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Improving the productivity of SMEs is therefore a worthwhile activity. In fact, SMEs can support the development of a country for two reasons. First, integrating proven practices and technologies is faster and safer than trying new ones, and SMEs have a big gap to close. Just as emerging companies can grow faster than established companies by using experimental technologies, SMEs can grow faster than large companies by using technologies and practices of large companies. Second, entrepreneurship, which is an important part of SMEs, has become an important source of innovation. Because they are not bound by legacy processes and outdated ideas, new entrepreneurs are often able to rethink practices and break from traditional business practices.
Half the difference in global gross domestic product between SMEs and large companies will have up to $15 trillion of added value, or about 7 percent of global GDP.2 Based on the weighted average of the differences between SMEs and large companies for countries where OECD data. is available. The weight used is the number of SME employees in each country. Ireland has been identified as a disadvantage because large companies establish regional headquarters in Ireland and transfer profits for tax reasons, which highlights the high contrast between SMEs and large companies more than 70 percent. Governments around the world can and will help close this gap through ten ways to meet the unique needs of SMEs.
When opened by a business environment and an open market, great companies can flourish; Meanwhile, SMEs have many undesirables. The small size of many SMEs means that they have difficulty accessing the resources and resources that will make them profitable, including skilled people with new knowledge of technology, finance and management practices.
In addition, many SMEs are young companies, which, combined with their small size, make them vulnerable to many business models, not only for customers, but also for customers who think that small products are too dangerous. Non-profit organisations, such as consumer finance and venture capital, are still at an early stage of development in many OECD countries and are often unable to meet the needs of SMEs.
Journal Of Small Business And Enterprise Development
Based on the problems faced by SMEs and the size of the opportunity, most of the G-20 countries have created a national organization fully or mainly focused on supporting their development.3 It is India, Indonesia and South Korea have created special programs to support SMEs. Other countries have created associations and organizations with the same purpose: Saudi Arabia created the General Authority for Small and Medium Enterprises, the United States has a long-standing administration of small businesses, and countries such as Canada and France has financial institutions designed to develop small businesses. companies SME ecosystem. However, the work of these government agencies is difficult for the same reason that business is struggling to meet the needs of SMEs: their small size and many situations.
Our research, analysis and experience working with SMEs and SME development organizations have shown that governments and non-governmental organizations (NGOs) seeking to serve the needs of SMEs will benefit from two activities: first , understand and develop the ecosystem of SMEs and secondly, find a job. Targeting approach to serve different sub-segments of SMEs.
In particular, they will focus on promoting three characteristics of the health and efficiency of the SME ecosystem: promoting the business confidence of SMEs, ensuring the growth of SMEs – in general and for workers highly qualified – and increase the competitiveness of SMEs (exhibit 1). Establishment of these three characteristics must be completely segmented. Therefore, it is important that government agencies create their menu of services after identifying the segments that exist in their country and the differences in their needs. We have identified ten methods that are used around the world to help meet these needs.
In our experience, SMEs often fall into one of 6 categories: early stage startups, established startups, large growth companies, stagnant or struggling small businesses, small local businesses, and micro businesses (Exhibit 2).
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Although it is important to consider all the needs of SMEs, we believe that SME development organizations should focus their limited resources on those who are potentially most affected, with programs tailored to their specific circumstances.
Medium-sized companies are often dominant in the segment. According to our analysis, although medium-sized enterprises make up only 2 percent of all enterprises, they account for about 30 percent of GDP and employment in many countries.
This may vary from country to country, of course. A country like India, for example, has a low rate of urbanization, with hundreds of millions of people working in informal jobs or small businesses in rural areas. It is difficult to ignore these segments in India; However, urbanized countries with low levels of conflict may have more opportunities and focus on new startups and medium-sized businesses.
The country’s economic development strategy should therefore be prioritized. For example, if the growth of exports is important, medium-sized companies that work in goods and services can be important. Although this classification can be difficult, the allocation of resources among recipients can greatly increase their impact.
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Government agencies and NGOs with a good understanding of SME sub-segments can tailor their programs to meet the needs of SMEs. We investigated the support of SMEs in the world and divided it in a number of ten ways. Some are treated as temporary, while others refer to one of the six negative needs for all or most of the episodes (Chapter 3).
For all these groups, the specifics of how they are used; therefore, it is difficult to draw the universal quality taken from them. However, it may be advisable to consider the following services that help close the gap between products for SMEs.
In addition to institutions, policies and facilities, business interests and the entrepreneurial skills of the public are also important for the development and survival of startups. Many ideas are never developed or turned into business plans. Risk aversion, fear of failure and incompetence can be a major problem as is the lack of control and support at home. Many governments have tried to create an entrepreneurial spirit among their citizens.
Entrepreneurship training through vocational education is often part of the solution. Poland, for example, teaches entrepreneurship in core school subjects such as history and mathematics, and high school students are required to receive “Introduction to Entrepreneurship Print”. August 2015, schooleducationgateway.eu.
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Entrepreneurship education is also expected to promote equity, and many organizations have focused on developing the entrepreneurial mindset and skills of young people in the community. In the United States, for example, the Network for Teaching Entrepreneurship (founded in 1987) provides a variety of entrepreneurship programs and activities from 1,882 partner schools. The program has reached more than 23,000 students across the state and about 50,000 more worldwide. In addition, 75 percent of the network’s students have studied at university and 25 percent have started at least one business.5 Report 2018 Annual issue: Preparing the next generation of young entrepreneurs and future careers, Network for Teaching Entrepreneurship , January 2019, nfte. com.
Entrepreneurs from all over the world have chosen great startups to build their business, find a new environment, access to finance and business support. Many governments have prioritized turning one or more of their cities into start-up centers, establishing the city as a start-up center or promoting start-up schools. As governments try to help or create startups, they can focus on some of the most difficult challenges that most entrepreneurs face – finding the right regulatory framework to start and run a business, access to resources.