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Promoting SMEs for Sustainable Development

Promoting SMEs for Sustainable Development. Wealth creation: vital to poverty allevation. The key to poverty alleviation is economic growth that is inclusive and reaches the majority of people Local entrepreneurs and SMEs represent the backbone of global economic activity

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Promoting SMEs for Sustainable Development

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  1. Promoting SMEs for Sustainable Development

  2. Wealth creation: vital to poverty allevation • The key to poverty alleviation is economic growth that is inclusive and reaches the majority of people • Local entrepreneurs and SMEs represent the backbone of global economic activity • Improving the performance and sustainability of SMEs can help achieve this type of economic growth

  3. Why are SMEs so important to a country’s economy?

  4. Importance of SMEs to large corporations • Important source of local supply and service provision to larger corporations • Extensive local knowledge of resources, supply patterns and purchasing trends • By working closely with SMEs, large corporations can develop a new customer base that may not be accessible to the traditional distribution networks of these corporations. • Important source of innovation – SMEs tend to occupy specialized market “niches” and follow competitive strategies that set them apart from other companies

  5. Anglo American: Anglo Zimele investing in SMEs Bambanani Health & Safety Go-Awaste Management Services Specialised Rubber Specialized Rubber

  6. Other examples of SME engagement • DaimlerChrysler: local and sustainable sourcing of raw materials for automobileproduction (Brazil andSouth Africa) • Unilever: employing women entrepreneurs to distribute health and hygieneproducts locally (India) • BP: enterprise center to build capacity and create employment amonglocal companies (Azerbaijan) • Vodafone: co-investing with local entrepreneurs t o establish phone kiosk franchises in South Africa • ABN Amro and GE: providing microcredit and finance to SMEs

  7. Formal vs. informal economy

  8. Regulatory framework for SMEs – the role of governments high low

  9. SMEs: key messages to government • A thriving SME sector is key to economic growth and job creation • An enabling regulatory requirement is critical – particularly SME registration and monitoring • Governments can engage (incentives) to address the need for start-up funds • Governments play an essential role in capacity building, e.g. • Promoting the need for more entrepreneurs and SMEs • Setting up municipal level agencies for advice and training on starting SMEs

  10. SMEs: key messages to business • Localizing value creation through SME engagement is a key contribution to economic development wherever “big business” operates • Leadership from the top is key to success - both strategically and operationally • Facilitating access to finance is critical • Consider partnering across segments to facilitate SME development and access to finance • Business planning skills, incl. raining in financial management, are crucial • Capacity building help is essential

  11. WBCSD Issue Brief on SMEs – published in July 2007 http://www.wbcsd.org/web/development.htm

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