Every successful economy has one trait in common: the ideal mix of large corporations and small and medium-sized companies. Also known as SME’s (small medium enterprises), the inclusion of these smaller companies to a corporate landscape helps to promote a healthy balance of entrepreneurial activity. Economy growth and technological innovation can suffer if too much priority is placed in the hands of only one type of business size. Because of their importance to any local economy, governments recognize the need to provide support to these SME’s. There are numerous benefits to society when SME’s are healthy and vibrant including:
LOCAL JOB GROWTH: Although the larger corporations have more capital, and thus more potential influence, local economic growth is most often fueled by the successful creation of a solid community of small and medium businesses. Especially in low-income countries, it is this type of business that is most responsible for keeping a local economy afloat. In these developing nations, the amount of SME startups focused on emerging technologies such as mobile innovation is especially important in not just job creation, but also to creating an innovative society ready to do business with the rest of the world. The benefits that these SME’s provide to developing countries cannot be overstated.
CULTIVATING ENTREPRENEURS: The role of SME’s in any society, regardless of its place on the economic ladder of the world, also contributes to the cultivation of the entrepreneurial spirit. Smaller companies are often where young and less experienced workers take the first steps in their careers. Encouraging the growth of SME’s serves to inspire entrepreneurs in all of their pursuits because it gives them that outlet to cultivate their skills and succeed in achieving their goals.
LOWER RISK AND PRODUCTION COSTS: Although the ceiling is not as high as it is with larger corporations, SME’s are blessed with a host of other benefits not afforded to their big business counterparts. Because production costs are leaner, SME’s must continually strive to find innovative cost-cutting measures. SME’s also benefit the overall economic landscape of their communities in large part because their smaller size necessitates that they use their resources more wisely. The lower risk of operating an SME also contributes to a more stable local business economy.
At the end of the day, a strong economy is essential to all country and people’s success. If we better identify ways to contribute to that kind of economic development, we can better outline the roadmap to success for an economy’s people.
Originally published at aishababangida.net on September 11, 2018.