Management Essay

1225 WordsDec 5, 20125 Pages
Assignment 3: Persuasive Paper Part 1: A Problem Exists ENG 215 November 25, 2012 Problems Facing Small and Medium Scale Enterprises in Developing Countries Introduction Small and Medium Scale Enterprises abbreviated as SME’s face a vast number of problems in all the aspects of the economy such as social, technological, legal, political, environmental and ethical aspects. In a growing economy, this sub-sector contributes a lot to the Gross Domestic Product (GDP). This implies that, sufficient solutions proposed raise the countries’ GDP. In all dimensions of development, the Small and Medium-Sized enterprises play a major role in economic development generally and in particular the industrial development in both developed and developing countries. It falls under the private sector and research shows that it contributes to 90% of the enterprises in the world and creates 50-60% job opportunities (Hobohm, 2010). This paper covers a brief history, status and the significance of the SMEs in the developing countries by citing examples from different countries. The first section provides a general overview of the problems facing the sector before giving details of the three main problems. Small and Medium Scale Enterprises in Developing Countries In almost all the developed and developing countries, Small and Medium-Sized Enterprises rely on the local skills and technology and contribute to the establishment and maintenance of entrepreneurship. They also promote innovativeness, invention and the growth and development of industrial linkages. They are relatively higher labor intensive. The main economic importance of the SMEs is the fact that they act as a source of new business innovation and creation and platform for employment opportunities. Small and medium scale enterprises fall into three main

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