SMEs play vital role in job creation
Geneva: The founding of new businesses, especially small and
medium-sized enterprises (SMEs), makes economies more stable, spurs
economic growth, and plays a major role in innovation and job creation,
several experts said.
A high-level segment of the Investment, Enterprise and Development
Commission on April 29 focused on entrepreneurship, noting that if poor
countries wish to emulate advanced economies, they must strive to foster
entrepreneurial skills and the development of SMEs, which in advanced
economies provide the majority of jobs and account for significant
portions of total production.
Director of UNCTAD's Division on Investment and Enterprise, James
Zhan said that SMEs contributed substantially to national economies and
global prosperity, accounting for more than two-thirds of employment and
half of gross domestic product (GDP) in developed countries and about 40
percent of jobs and 25 percent of GDP in developing countries.
"Strengthening local enterprise also boosts competitiveness and
increases local absorptive capacities, both of which are necessary for
attracting foreign investment and for it to have positive multiple
effects," Zhan said.
UNCTAD supports small business creation through its Empretec program,
which operates in numerous developing countries through national
Empretec centres that offer introductory and continuing courses on
At the conclusion of the afternoon meeting, Vietnam and UNCTAD signed
a Memorandum of Understanding to set up an Empretec centre in Vietnam,
the thirty-fourth such centre worldwide, and the first in Asia.
During a panel discussion on the role that entrepreneurship plays in
economic growth, Minister of Economy, Industry and Commerce of Costa
Rica, Mayi Antillón Guerrero, told the meeting that public policies that
were expressly designed to promote business creation in developing
countries, were needed. This approach had been taken in Costa Rica,
based on a belief in social and economic inclusion, in capitalising on
human resources, and in the initiative of individuals.
The country's recent growth and expanding trade had been a result of
the many new and thriving small firms, she said.
SMEs now accounted for 77 percent of the businesses in the country
and 30 percent of the GDP. One of the intentions of the Government's
policy, she said, was to help micro enterprises expand to become small,
medium-sized, and eventually large exporting firms.
Ghanaian Minister of Trade and Industry, Haruna Iddrisu, said that
Ghana was dedicated to the creation of an environment that encouraged
the private sector and entrepreneurship. There was a special focus on
fostering SMEs, he said, as they offered promise for the employment of
young people, for the equal advancement of women, and for sustained and
well-balanced economic growth.
Iddrisu said that another focus was science and technology, and that
the country had carried out, with UNCTAD, a review of science and
technology policies. The Government was carefully analysing the skills
that investors were looking for in the country's workforce, and was
devising plans for Ghana's educational institutions to meet those
requirements. Steps were also being taken to make financing more easily
available to those with viable business ideas, particularly youth.
Cameroon's Minister of Small and Medium-Sized Enterprises, Social
Economy and Handicrafts, Laurent Serge Etoundi Ngoa said that building
entrepreneurship was a national objective of the country. A development
policy that had first been adopted in 2004 was based on encouraging the
private sector and supporting business creation.
The country had abundant natural resources and great potential, he
said, and a vibrant SME sector was vital for speeding the development
Expansion of the private sector was being encouraged via a specific
bank designed solely to finance SMEs, and the Government had recently
founded an SME development agency, the Minister said.
The Prime Minister was now Chairman of the Cameroon Business Forum,
which considered the challenges faced by small businesses and strived to
Among other challenges, the Minister said that a survey of potential
investors had indicated that Cameroon was considered a difficult place
to do business. In response, a law had recently been passed to encourage
investment, and an investment charter had been adopted to make the
investment process more streamlined and secure.
Vice-Minister of Small and Medium-Sized Enterprises of the Dominican
Republic's Ministry of Industry and Commerce, Ignacio A. Méndez, said
that 97 percent of Dominican companies were SMEs, and that such firms
had a major impact on national economic growth.