SMEs are the backbone of a national economy, particularly in developing countries.
SMEs contribute to economic development in multiple ways.
Creating employment for expanding rural and urban workforce.
providing flexibility and innovation in the economy as a whole.
The benefits, of SMEs in Pakistan have not been fully apprehended
Small & Medium Enterprise Development Authority (SMEDA) was formed In 1998 to provide support to SMEs in Pakistan through:
The creation of a conducive and enabling regulatory environment.
Development of industrial clusters.
The provision of Business Development Services to SMEs in all areas of business management.
Employees not more than :
manufacturing 250 persons
trade / services 50 persons
fulfills one of the following criteria:
1.trade / services total assets up to Rs 50M.( excluding land and buildings )manufacturing total assets up to Rs 100 M .( excluding land and buildings )
Any concern net sales not exceeding Rs 300 M
Source: SMEDA 2007
State Bank of Pakistan - Less than 10 Federal Bureau of Statistics Total Assets of Rs. 20.0 M - SME Bank Productive Assets Rs. 2.0-20.0 M 10-35 SMEDA Assets No. of Employees SMALL ENTREPRENEURS INSTITUTION
Province wise Distribution of SMEs 2.09% Balochistan 14.21% NWFP 17.82% Sindh 65.26% Punjab 2.96 million Pakistan SMEs unit Name of area
Distribution of Small Firms According to the No. of Employees 1617(0.054%) 26,000(0.87%) 0.079 million (2.67%) 2.85 million (96.6%) 2.96 million (100%) SMEs employing over 50 Persons SMEs employing 11-50 Persons SMEs employing 6-10 Persons SMEs employing 1-5 Persons Total SMEs units
Small Firms Share in Sub-Sector 35% Others 8 10% Wood & Furniture 7 4% Jewelry 6 16% Grain Milling 5 5% Art Silk 4 4% Carpets 3 7% Metal Products 2 13% Cotton Weaving 1 Percentage Share of SMEs Sub-sectors S.#
Economic Importance of Small Firms
Contribution to GDP: 30%
Share in Manufacturing Export: 25%
Contribution in Employments: 99% non-agriculture employment sector jobs
Value addition in Manufacturing: 35%
Economic Establishments: 3.2 million
Source : 1. DAWN News, Economic & Business Review, “Support to Small Business” by A.B.Shahid, Dated: March 9-15, 2009
SMEs in context of NIS
Human Resource Development & Technology Transfer/Up-gradation Through R& D Organizations
As suggested in the policy in 2007 that a linkage between R&D organization/ Universities/ SMEs will not only help SMES but LEs also in solving the problems related to HRD and Technology up gradation. In this contest example of PCSIR may be quoted, which is a role model for Technology Development /up gradation and Human Resource Development for SMEs.
Space/building for the production
One or two scientists for the supervision of work at the plan
Help in selection of machinery and equipment
Help in procurement in raw material
Quality control of product
Commercialization of R & D in Pakistan
Technology commercialization is a process of converting research to successfully marketable products .
PCSIR has the main objective of technology development and successful transfer and commercialization of technology to SMEs
Development of any technology starts with the market survey of that product. The process involves any of the following routs for the selection of technology which has to be developed:
Scientist / technologist search the market about the need of that particular commodity which has to be developed
Client / SME contact the organization/ scientist for the development of technology
Recommencing the discussion above, the possible strategy for productivity improvement in Pakistan, through SMEs, has to follow a four step approach.
A conducive regulatory environment, balanced regulatory burden, provision of adequate infrastructure, supporting attitude from provincial and federal government levels.
Short to long-term funding and access to capital
Pakistani society is an employee society, to shift it to an entrepreneurship society we have to bring reforms by taking revolutionary steps in our education system and have to fascinate our educated youth towards entrepreneurship.
Quality training of workers and up gradation of technologies