SME Definition: What do SMEs Need?

Involvement: Redefining SME’s

Involvement: Redefining SME’s

Defining a Small & Medium Enterprise is itself a challenging task, as every
country have there own definition for a SME. For instance in a country like
India as per the Micro, Small and Medium Enterprises Development Act
2006, enterprises are broadly classified into micro units, small units,
medium units & large units depending on the investment in plant and
machinery. However, comparing that to the EU where it is based on the
parameters of employment, turnover and asset size, and OECD on
employment and sales turnover has totally different criteria for
establishment.

How important SME’s are:

With various definitions by various countries, sometimes it becomes a
difficult task for an individual to understand importance of a SME. One
may not know the important role that SME plays in developing any
particular sector, economy of any country, alleviating poverty, increasing
employment, and, above all providing various items of daily use at an
affordable cost. With in the last few years many developed and developing
countries have realized the importance of the sector. Fast decision making
due to less staff and more control of an entrepreneur, availability of raw
material at your door step, as many SME’s have been started in the area
where availability of raw material is not a hindrance, innovative products
which cater to the needs of a particular region and its vicinity, are certain
key factors making SME’s significant. Furthermore, economic factors which
constitutes to the development of the sectors are as follows:

· Addition of output of goods and services to economy
· Low capital cost for establishment
· Reduction in income disparities
· Admirable propagation ground for entrepreneurial talent
What SME’s require:
Year 2009 is a year to be remembered during the 21st century. The world
has seen worst financial crisis in times gone by, making many developed
and developing economies to recreate a new policy in terms of managing
crisis. In addition to that, increasing mercury of mother Earth has led to
change in climatic conditions across the globe, inducing, whole Diasporas
to re think about what worst perhaps come, and how by adapting some
arduous measures, if applied, can give a better environment to our future
generations to live in. SME’s at there end, with innovative ideas helped to
mitigate the situation. However, they lack in certain aspects, as follows:

· Technical Manpower
· Financial Aspect
· Technology Transfer
· Research and Development
· Lack of Education in terms of Policy, Labor Laws, Government
Schemes

Role of MOU’s

Globally MOU’s are by and large defined as a Document that expresses
mutual accord on an issue between two or more parties. Financial
institutions, trade promoting organizations and various other agencies to
foster trade, exchange of knowledge, technology transfer and promoting
SME’s of there respective countries facilitate MOU’s among various
countries. Entering a MOU is not only about binding two organizations, it
also accord people-to-people contact which may foresee comprising of two
cultures, countries and there respective values. To strengthen relations,
every country apart from opening there missions in other countries fund
various organizations to promote various aspects including trade,
technology, rural development initiatives for mushrooming entrepreneurs
etc.

Conclusion:

Notwithstanding the fact that governments of developed and developing
countries have taken various initiatives, and, on regular intervals have
provided support, however, still a lot needs to be done. For SME’s surely
development plays a huge role, conceivably, involvement should not be led
behind. By involving SME’s opinion at various fronts, make them more
eager to learn vis-à-vis various other aspects, which by and large, create
interest among SME’s to venture new projects leading to growth of a
sector, state, a country and its respective economy.