Under the patronage of Industry and Commerce Minister Dr. Hassan Fakhro opened yesterday morning a conference under title of ‘Empowerment of SMEs in Knowledge Based Economy’ which is organized by Price Event Management and supported by Tamkeen.
During the opening ceremony, Dr. Fakhro delivered a speech confirming the great importance of SMEs both in the domestic as well as the global context making up, as they do, by far the lion’s share of output and employment. The global importance of SMEs spans both developing and developed countries, North, South, East and West, they are, if you will, the embryo of economies. As the 14th Century proverb has it “Great trees from acorns grow”. However, unlike oak trees which take generations to progress from a small acorn to a medium sized and then to a large tree; SMEs have the benefit of the 21st century environment.
SMEs does not require generations of slow growth for a small start-up business to get to the position of becoming a large public company, there are so many examples of successes, in particular those that have been technology driven, I’ll just quote Microsoft as an obvious example.
Dr. Fakhro added that to-day technology, the internet and global markets, are levellers that enable businesses to leap-frog generations of slow growth; but it cannot happen in a vacuum, the domestic infrastructure in particular must be conducive to the organic development of small enterprises, there must be access to new technologies; the legal and administrative infrastructure needs to be supportive, information needs to be timely and available, and the hard-infrastructure such as the transport and communications networks as well as industrial assets needs to be competitive.
There still remains the ‘soft-underbelly’ of businesses which can often be their downfall. Companies must ensure that their accounting, administration, marketing and logistics operations are up to the task; otherwise what maybe a promising beginning, may quickly end up as yesterday’s news.
One of the most prevalent issues facing SMEs today is access to finance, particularly in developing markets where perhaps there is an absence of angel investors and where commercial banks have been somewhat soured from lending after the recent financial crisis. This is an issue which needs careful handling between the Government and private sector actors, so as to ensure that funding does not inhibit SME growth, yet at the same time also does not place any unwarranted risk on the financial system.
There are other areas in which the private sector can help in facilitating development of SMEs, either on a sector basis or generally. For example, sector specific associations can provide some weight in negotiating in international markets, and can foster cooperation between enterprises in areas such as marketing and logistics.
The minister noted that larger companies can play an important role in including SMEs in their supply chains, sourcing components and other production elements domestically from SMEs; and for its part the Government is already doing what it can to make Government procurement more accessible to SMEs.
Dr. Fakhro affirmed that the Ministry of Industry and Commerce continues to work together with its partners at the Bahrain Chamber of Commerce and Industry, the Economic Development Board, Tamkeen, Bahrain Small and Medium Enterprises Society and others on issues of particular relevance to SMEs, and I am certain that this conference will shed new light on areas of concern and open up new vistas for future work in this regard.