The role of small, medium enterprises (SMEs) cannot be over-emphaised in economic development, an indigenous technology firm, CWG Plc has said.
Its CEO, Adewale Adeyipo said the importance of SMEs in the process of social and economic development cannot be neglected, and its significance in the development of the country.
According to him, it was summarised in the country’s third National Development Plan, 1975-1980; as the generation of employment opportunities, stimulation of indigenous entrepreneurship, facilitation of effective mobilisation of local resources including capital and skill as well as a reduction in regional disparities. Despite the slow growth of SMEs development, the impact of SMEs has been a known fact dated back as 1975, he said in a note.
He said: “The Small Business and Entrepreneurship Council (SBE Council) statistics revealed that 99.7 per cent of U.S. (United States) businesses are SMEs. However, there are several barriers that the U.S. SME sector still faces, especially in commodities. The significant barriers to trading include insufficient access to finance, high transportation costs, tax laws, and rules, maintaining profitability, developing new products, language, and cultural differences.
“Gaps like these signify no SME ecosystem is perfect, and they are required to keep evolving with time as new challenges arise. Despite the challenges in the SMEs market in the US, the sectors still contribute 47per cent of total employment.
While in developing economies like India, the contribution of the SME sector to manufacturing output, employment, and exports of the country is quite significant. It is noted that regarding the value, the SME sector of India accounts for 45per cent of the manufacturing output and 40per cent of the total exports. India’s SME sector employs around 42 million people in over 13 million units throughout the country.”
He said SMEs contribution is considerably high in economic development whether it is a developed country or a developing country, stressing that not only financially subsidised promotion is essential, but the strategic implementation becomes vital for sustainable development of the SME sector.
“Strategic implementation takes care of financial aspects, human resource, marketing, research and development, technology, and corporate governance in the SME sector.
SMEs in developed nations are not only relying on credit availability but technological innovation and infrastructural policies. Hence, it is critical for policymakers to create an enabling and sustainable environment as a bedrock for SMEs to flourish,” Adeyipo said.