Sme Importance Essay

2246 WordsDec 9, 20109 Pages
Creating A Conducive Legal & Regulatory Framework for Small and Medium Enterprise Development in Russia A Policy Dialogue Workshop, St. Petersburg, Russia September 14-16, 2003 Importance of SMEs and the Role of Public Support in Promoting SME Development Qimiao Fan World Bank Presentation Outline I. II. Who are SMEs? Importance of SMEs III. Characteristics of SMEs and Rationale for Public Support IV. The Role of the Public Sector in Ø Creating a SME-friendly legal and regulatory environment Ø Access to finance Ø Business development services 1 I. Who are SMEs § § § Different countries use different definitions Lack of consistent cross-country data IFC definition Mi (Micro enterprise) (a) Employees < 10 (b) Total Assets < US$ 100 000 (c) Total Annual Sales < US$ 100 000 S (Small enterprise) (a) 10 < Employees < 50 (b) US$100 000 < Total Assets < US$ 3 million (c) US$ 100 000 < Total Annual Sales < US$ 3 million M (Medium enterprise) (a) 50 < Employees < 300 (b) US$ 3 million < Total Assets < US$ 15 million (c) US$ 3 million < Total Annual Sales < US$ 15 million 2 II. Importance of SMEs • SMEs are the Engine of Growth • SMEs are Essential for a Competitive and Efficient Market • SMEs are Critical for Poverty Reduction • SMEs Play a Particularly Important Role in Developing Countries 3 SMEs are the Engine of Growth • SME sector is the largest provider of employment in most countries, especially of new jobs • SMEs are a major source of technological innovation and new products 4 SMEs are the Engine of Growth Distribution of Firms in the Economy by Employment Size (1999 or nearest year) 99.8% 100.0% 75.0% 50.0% 25.0% 0.3% 0.0% Czech Republic France Italy United Kingdom United States 0.4% 0.1% 0.7% 1.5% 99.7% 99.9% 99.3% 98.5% 0-499 500+ 5 SMEs are the Engine of Growth Distribution of Employment in the Manufacturing

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