Promoting Small and Medium Enterprises for Sustainable Development
This week the World Business Council for Sustainable Development (WBCSD) published a brief titled “Promoting Small and Medium Enterprises for Sustainable Development.” I recommend reading it because it gives good ideas and advice to governments, large corporations, and the local community on how to support SMEs.
Because of the nature of NextBillion.net and our business-focused approach, it is important to mention the specific messages in the briefing, such as:
Building supply chain capacity
Rationalizing procurement procedures
Strengthening local distribution networks
Improving environmental performance
Providing access to financial services
Since SMEs are the backbone of most developing countries? economies, governments and corporations need to find ways of synergizing with these SMEs and therefore create local sustainable growth. SMEs offer jobs to most of the population in these countries:
In OECD economies SMEs and mircroenterprises account for over 95% of firms, 60-70% of employment, 55% of GDP and generate the lion’s share of new jobs. In developing countries, more than 90% of all firms outside the agricultural sector are SMEs and microenterprises, generating a significant portion of the GDP.
SMEs create opportunities at a local level, as the WBCSD publication says, governments and large corporations should collaborate with SMEs building a bridge between the local community and the larger economy. An enhanced cooperation between the government, big corporations, the local community, and SMEs will be beneficial to local entrepreneurs in the BOP and will also create sustainable forms of development at a local level.Many other SME reports talk about innovation, finance and stay very general and can be over the top. In contrast, this report is very detail oriented which helps companies make direct changes, such as in procurement procedures, supply chains, and local distribution networks. The WBCSD report is a worthwhile read because they are actually getting in to detail while other reports leave it pretty general.