The Power of SMEs
Small and Medium Enterprises. The phrase itself does not convey a sense of power, however, taken as a group, SMEs are the backbone of economies the world over. For example, in the world’s powerhouse economy, the USA, SMEs account for 99.9% of businesses. Their contributions in emerging and frontier markets is especially significant. So, let us look at why SMEs are important.
In developing economies, SMEs contribute nearly 50% of employment opportunities and about 33% of GDP. In more developed economies, this is much higher. For example, in the OECD area, 99% of businesses are SMEs and provide around 70% of job opportunities. All of this means that they are pivotal in driving economic growth.
Creating Jobs & Transforming Lives
Even the smallest SME will create a few jobs, often in an area where such opportunities are much needed. This helps to uplift standards of living and provide people with engaging and meaningful work.
Not Difficult to Start
An SME is not particularly difficult to start. Many are happy to lend out to businesses with inspiring ideas and or robust operational models. In fact, many SMEs will start with the savings of the founder(s) and investments from close associates. If you think about it, some of today’s global giants were once SMEs, particularly in the technology space.
More Efficient, Agile & Competitive
As a result of their small size and consequently reduced red tape and less rigid processes, SMEs can often be more efficient and competitive than larger organizations. They are able to take immediate action when necessary and quickly adapt to changes in the marketplace.
Hives of Innovation
The freer environments of SMEs can help to spur innovation within industries. When people have the freedom to experiment, great things happen.
Again, their size allows them to maintain closer, more personal relationships with their clients. Many will prefer this over the clinical and distant relationships they may have with larger organizations.
Tech Savvy & Fun to Work At
SMEs are able to quickly implement new technology to transform their businesses. Their smaller workforces and less rigid structures also make them more attractive to many workers.