- Governments must work to develop an enabling environment for new SMEs to continually create and sprout.
- Culture and society, mindset and education are three very important elements of the entrepreneurial ecosystem to accelerate the growth of SMEs.
- Our institutions must realign the curriculum to meet the needs of the 21st century, namely job creation for sustainable development.
Over the past three decades there has been a dramatic increase in government interest in entrepreneurship and small business development as potential solutions to slowing economic growth and rising unemployment.
Entrepreneurial activity is seen as an important source of jobs and economic development.
Worldwide research shows that small and medium-sized enterprises (SMEs) make up more than 90 percent of all companies outside the agricultural sector.
Most of the people who start and grow a business are opportunity-oriented. Others are motivated by the need to make a living as the leaders of downsizing companies replace them with technology and lay them off. Most of these companies are in the form and shape of SMEs.
The SMEs can be found in a wide range of business activities ranging from the individual artisan making agricultural equipment, to a coffee shop, a small town internet cafe, to a small, sophisticated engineering or software company selling in overseas markets to medium-sized manufacturers who sell equipment or products to local and international markets.
SME owners may or may not be poor and the companies embody different levels of skills, capital, competence and growth orientation, possibly in the formal or informal economy.
Small businesses are an important source of employment and can also generate significant domestic and export revenues. These positive economic indicators have made SME development a key tool in poverty reduction efforts.
A small and micro enterprise is therefore the result of successful entrepreneurial activity.
Studies have shown that the success of entrepreneurial activities depends to a large extent on a country’s infrastructure or ecosystems.
A 2004 paper by the Organization for Economic Co-operation and Development (OECD) stated that the development of SMEs requires a cross-cutting strategy that touches many areas.
Areas mentioned in the paper included the ability of governments to implement sound macroeconomic policies and the ability of stakeholders to develop conducive microeconomic business environments.
This analogy is still valid today. Put simply, the OECD paper points out that for SMEs to thrive, simplified legal and regulatory frameworks, good governance, abundant and accessible financial resources, appropriate infrastructure, supportive education, a sufficiently healthy and flexibly qualified workforce and efficient public authorities are required and private entities as well as the ability of SMEs to implement competitive operating practices and business strategies.
The OECD paper also noted that the SME development strategy needs to be integrated with broader national poverty reduction development plans in order to stimulate small business growth.
These discussions about SMEs as the engine for growth and poverty reduction are still going on around the world. However, as these conversations focus on how governments can help SMEs grow, they must work to develop an enabling environment for them to continually create and produce new SMEs.
Culture and society, mindset and education are therefore three very important corporate ecosystem elements to accelerate SME growth.
As an adult, at some point you have to keep saying that you should read and study a lot and later get a good job.
Others went a step further and told some of us that if we did very well, we would receive a scholarship to study and work abroad.
So we all went to books, read, and passed very well. True to word and form, some of us who were considered happy all went into formal employment, each taking one additional place. But what if orientation and way of thinking were different? What if we had an education system from the start that was designed to train students to become entrepreneurs from the start?
What if the system was to go to school to learn ideas and skills for starting a business and creating jobs? I believe, as many people are doing now, to change our attitudes and approach to entrepreneurship that creates SMEs, we need to revise our training curriculum to create awareness and purpose in students at an early age, from kindergarten to university.
Our institutions must realign the curriculum to meet the needs of the 21st century, namely job creation for sustainable development.
Entrepreneurship should not be viewed as a last resort for those who have been laid off, laid off, laid off, and the like. It should be the first option and the first way out. There should be a competition to found innovative companies that offer solutions to real societal challenges.
Students should be trained to start businesses, start businesses, and be ready to fail without ever giving up.
Training should focus on equipping future wealth creators with the necessary skills, rather than becoming effective loyal employees.
Students should be trained to be entrepreneurs early in their academic life – train them to identify opportunities, manage risk, and what to accept, reject, or avoid in making business decisions. Train students to be entrepreneurs and thinkers who can recognize a societal problem and find a solution. Train students in the culture of investing and saving, the starting point for becoming entrepreneurs.
Offering a solution to a problem is a real asset. Think deeply and avoid the shame of retreating into misery.
The government and business associations should provide mentoring, counseling and other support systems for aspiring young entrepreneurs.
Connect students with industry gurus and those who excel in business.
Most importantly, providing students with an industrial bond so that they can learn the art of business as early as school.
Our training models are still heavily dependent on producing skilled workers who work in state and private institutions and only in the moonlight to give advice here and there to supplement their income.
Our engineers look forward to working for the big tech companies and corporations. Accountants want to get into the blue chip companies or go abroad to sit behind a clean desk. But can you imagine how many jobs could be created if all professionals with more than 10 years of professional experience take the courage and start something full-time in their industry? I’m talking about engineers, doctors, accountants, architects, surveyors, lawyers, marketing specialists and PR professionals, among others.
In this case, there would be a boom in SMEs in this country. In order to make this possible and to anchor the entrepreneurial spirit, the professional societies must also play their due role.
Professional associations are charged with registering members for private practice. Your access rules may need to be tinkered with so that they don’t become barriers but rather entry requirements.
You should relax some rules to make it easier for newcomers to gain access. This is a meaningful way to create a sustainable formal SME.
Perhaps the biggest bottleneck in founding SMEs is our social architecture for success. Entrepreneurs are seen as failed and frustrated people. Colleagues in formal employment are considered more successful.
Perhaps society should also recognize the power of SMEs to create wealth and therefore encourage our unemployed sons and daughters to think about entrepreneurship.