Small and Medium-sized Enterprises, or SMEs play a significant role in the economic growth of any country; it is especially true for the OECD. SMEs have always played the role of job creators for the countries; therefore, many governments work toward providing them with a suitable environment for growth. The role of SMEs in the economic growth of a country is that it sometimes results in the employment of even 60% of the population.
The role of SMEs comes in when the big companies and firms outsource their work to the SMEs. Further, when the larger firms decide to downsize, it creates welcoming opportunities for the SMEs to grow. With the proper functioning of SMEs in a country, the government does not need to worry about financing its citizens by creating Dhankesari or Lottery Sambad. SMEs alone are powerful to create financially independent citizens.
Service Sectors Support Most SME Jobs
Even though SMEs are prevalent in all sectors, they have played a significant part in the service sector. In most OECD countries, the service sector plays an important role too. Most of them deal with whole and retail trade, hotel and restaurant businesses, and communication and business sectors.
In addition to the service sector, even the manufacturing sector hugely supports these small and medium-sized enterprises. Also, industries that are technology-intensive grow with the help of SMEs. Many SMEs win the market niche when major firms outsource their workload to them.
Innovation is the key for most SMEs. Even though they invest less in research and development in comparison to larger firms, it has its own way of innovating and moving along with global growth. The USP of most of these firms lies in their expertise in re-engineering the services and products to meet the ever-growing need of the market. The small size of the enterprises allows them to take greater risks by going for an absolutely new approach to improve productivity and meet customers’ needs. The innovative skills of SMEs also ensure that these firms enjoy high growth. The same is evident from the fact that they successfully create jobs at an exceeding level for the citizens. ‘
How Active Are The SMEs In The Global Market?
SMEs are known to focus on the domestic market. It is because they are small and the funds they have supports them to grow at the domestic level comfortably. We believe that the same trend will exist even in the upcoming years. However, a few sets of these firms are working to enter the global market too. Most manufacturing SMEs are the ones who have successfully entered the global market. WEight the right networking and greater flexibility, it is possible for SMEs to leave a further footprint in the global market.
The market conditions are changing every year and along with that, customer preferences are changing too. Compared to the bigger firms, SMEs are well-equipped to meet these changes. Further, thanks to technology, a wide range of communication tools is available, making it possible for SMEs to connect with foreign partners to grow themselves. It is not new for the bigger firms to partner with smaller firms to provide economical products and services. Long gone are the days when SMEs only limited themselves to the domestic arena. Even though the trend still exists, many SMEs are trying their best to set their foot in the global market.
The most common challenge that SMEs face when it wants to go global comes in the form of finance. Most governments recognise this challenge and are providing them with the right financial services. The financial services are not limited to but encompass insurance, advice and bank guarantees. With the right kind of support, only the sky’s the limit for these firms. Considering the contribution of SMEs to a country’s economy, the government needs to take them seriously and provide them with the right kind of environment.
The growth of SMEs can further be escalated by promoting entrepreneurship of all kinds. With the entrepreneurial spirit, many more people will come forward with their own businesses and start-ups to pave their way to entering the global market. Further, with the growth, it also becomes possible for them to take sustainable development seriously.
