The Importance of Small Enterprises

Today, the small enterprises are playing a main role in innovation, entrepreneurship and the creation of job opportunities. Therefore, the discussion of finance and businesspersons regarding the small enterprises is not about the benefits, it is more about the strategies which reflect a full comprehension about the future of small and medium enterprises.

Indeed, the economies of super power countries do not depend on the large enterprises only, they also counting on the small and medium enterprises as a developmental base which attract capitals, enrich entrepreneurs’ experiences, encourage youths’ energy and create job opportunities for unemployed. All those support the economy which has become subject to periodic major shocks from time to time after a deceptive certainty of prosperity that last for a few decades in the last century. Accordingly, it is not surprising that the small enterprises have an important role in all countries as a producer for the added value and wealth, along with their contribution to the growth and prosperity of the large economic enterprises, in addition to their essential role in achieving the sustainable development that can push the developing countries into the ranks of the developed or industrial countries.

Small Enterprises to Fight Poverty and Backwardness

According to the statistics, the small enterprises sector has an effective and essential role economically since more than 90% of the registered companies around the world are small and medium enterprises that ensure the importance of the small enterprises in growing and creating job opportunities, especially that they are adapting rapidly to the benefits of innovation, development and the revolution of technology. They are less complicated structurally, more efficient and flexible in terms of performance compared to the larger companies as well.

Apparently, it is clear that how important and influent these small enterprises are in taking the developing countries out of poverty and the economic deterioration to achieve development since they contribute to solve the industrial and production backwardness and fill the technological gaps and all related mismanagement of human and natural resources. In addition, they have a great effect on the current living situation in order to improve the living conditions by being an effective component in developing the economies, increasing the income and development rates. Moreover, the increasing interest in small and medium enterprises shows a high absorptive capacity for the unemployed labor force, an effective role in improving the administrational, technical, production and marketing skills which meet the labor market needs, and open the doors for the self-employment demand.

Small Enterprises… Flexibility and Positive Feedback for National Economic

The figures and statistics confirm the importance of the small enterprises and their crucial role in driving the the production field forward and increasing the export rates directly or indirectly in which affects the national economy positively.

In the same context, the small enterprises have demonstrated great ability and efficiency in tackling the major problems that the economies faced. Hence, the interest of official and popular levels has increased widely regarding the small enterprises sector due to their flexible production and marketing plans, their renewable ability to restructure and adjust the production path according to the market demands.

The successful developmental economic experiences have proved that the great part of them were achieved by those small enterprises which are representing the main core for expanding the production base, increasing the exports and creating new job opportunities especially in the rural and remote areas since they aim at transforming the rural areas into industrial areas with the minimal infrastructure and basic equipment. In addition, the small enterprises can decrease the social class variances and achieve a fair distribution for the national income.

Consequently, the effect of the small enterprises is clear and proved in regard of the economic development and achieving the economic and social goals of the ambitious states and societies.

Small Enterprises… Certain Advantages and Incidental Obstructions

Flexibility, direct personal pursuance, and reducing poverty and unemployment rate are a broad title for the small enterprises, as well as there are many other features distinct their performance and results which make them have multi-dimensional effects personally, socially and internationally. Easy to establish, direct manage, cheap capital cost for establishment and implementation, simple strategy and production procedures are the most essential features of the small enterprises, in addition to the adaptability with the new developments, variables and continuous updates.

Note to mention the management and production costs reduction that is highly competitive, and the complimentary performance for the large industries such as the electronic spare parts or computer software… etc., besides the growing of the financial, procedural and banking governmental encouragement and support for being a source of technological and marketing creativity for production and development.

Moreover, small enterprises are essential in being a source of traditional and modern goods and services which are required for consumption by the community. Some items and professional services production are confined to families inherited the career that produces limited quantities. However, most of the large industries that recruit ten thousands of employees nowadays, have started with small enterprises relying on a few number of workers.

Such enterprises face many obstacles such as providing some basic materials and substances, attracting investments to this domain which lead to difficulties starting from the complexity of the legislative aspect of their formation and operation, ending at the weakness of the investment’s attractive formation and motivations.

Many economists think that overcoming obstacles that face the small enterprises’ successful become so essential and must be taken into consideration, in addition to provide help in different ways depending on the available possibilities throughout the decision-makers’ initiative toward decreasing the import rates and increasing the export and local production rates, reconsider their legalization and the supportive current situation of the small and medium enterprises as well.

Furthermore, this will be supported by putting new developmental strategies and policies that encourage starting up and managing small enterprises, expanding their works, involving the civil society organizations in generalizing the importance of such enterprises especially for the Arab and Islamic society and spreading the culture of entrepreneurship and small enterprises among our societies which stayed for long decades dedicating their effort and time for the bureaucratic governmental works under the title of stability and not taking the risk.

While many researchers, academics and economists have sought over the last few years the successful path of the small enterprises and entrepreneurship, most of them, nowadays, are thinking of how to enhance the performance of the small and medium enterprises as an effective economic solution for the current deteriorated economy. Hence, this solution can be appropriate for all different institutions’ type around the world, and can enhance the initiative spirit and help and the small companies to invade the market as equal to the major productive entities.

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