Tuesday, February 19, 2008

Realizing the power of Small ( and medium enterprises)

In most economies, smaller enterprises greater in number then the large corporations . some of the facts related to SMEs in the world are:
1) In the EU, SMEs comprise approximately 99% of all firms and employ between them about 65 million people.
2)China’s more than 8 million SMEs, account for 99 percent of China's total enterprise and 60 percent of the nation's industrial output and exports.
3) In India 4.5 million SMEs contribute 40% of industrial production but create 70% of industrial pollution.
4) As per the latest Microsoft-AMI Partners report, "the India SMEs are on a firm growth trajectory, with 60 per cent of PC-using businesses expecting 20 per cent growth and 16 per cent planning to add branch offices to expand operations" .

Not only are SME's seen to be the engine of employment growth but they are also responsible for driving innovation and competition. These are the businesses which later on become some of the largest empires in the world , recall the days when Infosys started with 5 man and a two BHK aprtament in Pune and went on to be the second largest software services provider in Asia. SMEs also play a major role in developing entrepreneurship and ways of diversifications.
Given the rosy picture , SMEs are the one hit hard even by minutest change in the macroeconomic conditions. They have great difficulty in obtaining captal for scaling thier operations , crossing boundaries of nation , going with technical upgradation and attracting the best talent. This all keeps these indegeneous industries shackled with thier potential locked.

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