Even though globally small and medium sized enterprises (SMEs) are recognised to be instrumental to private sector growth, creation of employment and the driving of innovation, their role still often goes unrecognised. However, the challenging times we live in have refocused the attention of policy makers around the world: The European nations’ 2020 strategy is now fully aimed at competitiveness and growth that is to be achieved mainly through the sustainability of SMEs. Indeed, the small enterprises account for more than 67% of private sector jobs, and for more than 58% of total turnover of the EU. In emerging economies SMEs have no lesser impact in ensuring growth and innovation, however, their sustainability is considerably endangered by the restricted access to financial resources. In this article, Dr. Hischam El Agamy explores what the challenges are that all SMEs face around the world and what they can do to overcome them to take advantage of a global market place.
Who are the SMEs
The definition of what constitutes an SME varies greatly between countries and sometimes institutions. For instance the World Bank defines SMEs as “those enterprises with a maximum of 300 employees, $15 million in annual revenue, and $15 million in assets” while the Inter-American Development Bank describes them as “having a maximum of 100 employees and less than $3 million in revenue”. In Egypt SMEs are enterprises that have more than five and fewer than 50 employees; Vietnam considers SMEs to have between 10 and 300 employees.