Promoting SMEs for Sustainable Development

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Promoting SMEs for Sustainable Development
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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

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Why are SMEs so important to a countrys economy?
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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

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Anglo American Anglo Zimele investing in SMEs
Bambanani Health Safety
Go-Awaste Management Services
Specialised Rubber
Specialized Rubber
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Other examples of SME engagement

• DaimlerChrysler local and sustainable sourcing
  of raw materials for automobile production
  (Brazil and South Africa)
• Unilever employing women entrepreneurs to
  distribute health and hygiene products locally
  (India)
• BP enterprise center to build capacity and
  create employment among local 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

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Formal vs. informal economy
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Regulatory framework for SMEs the role of
governments
high
low
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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

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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

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WBCSD Issue Brief on SMEs published in July 2007

• http//www.wbcsd.org/web/development.htm