Enterprise development SMEs and export-led growth

Transcript:Enterprise development SMEs and export-led growth:
Enterprise development SMEs and export-led growth as the main engine of economic development Dr. Joy Kiiru Enterprise development is about growing existing companies – rather than developing start-ups – It is enterprise development that drives productivity growth. It Involves: -Enabling environment for small enterprise growth -Support services: both financial and non financial What is it Critical economic role. They account for about half of global gross domestic product ( GDP ) and create 60 %–70 % of employment. In the OECD area, SMEs employ more than half of the labour force in the private sector. In the European Union, they account for over 99 % of all enterprises. Furthermore, 91 % of these enterprises are micro-firms with less than 10 workers Role of SMEs In Africa they represent more than 90 % of businesses and employ about 60 % of workers, many of whom are women The informal sector generates about 55 % of sub-Saharan Africa’s GDP and employs around 80 % of the labour force. Role 83% (2017) of total labour force (13.3 million) is employed in the informal sector through SMEs. Accounts for 30% of GDP Popularly known as the Jua Kali Sector, small-scale activities that are semi-organised, unregulated SMES in Kenya There are both internal and external factors that constrain SMES. Internal: innovation, rapid changes in technology, managerial skills and human capital External factors: Access to finance, information, infrastructural development (connectivity), limited market access Challenges facing the SME sector Access to finance is rated higher financial capability of a firm plays a big role in addressing even the more paramount internal challenges For example, to innovate or to acquire human capital or technology a firm requires financial resources. Challenges Government (Kenya) attempts to address these challenges include: -Local content Policy for public projects, ‘Buy Kenya, Build Kenya’ policies in public procurement, -Research and development support -Increased contributions to funds such as the Uwezo fund that aims to expand access to finances and promote women, youth and persons living with a disability. Youth Fund Addressing Challenges A study to build capacity within Kenya’s financial services sector to SMEs (2016), showed banks were not serving SMEs effectively. There is demand for both financial and non financial services by SMES in Kenya Support to SMEs Non financial support is often referred to as business development services or BDS (advisory services, training and information as well as business clubs and other