SME'S - is government spending good for them
SME'S - is government spending good for them
One of two things occurs. Firstly they attempt to set a financial limit, without any thought in to how the amount is derived. Secondly they take the tried and trusted, gardening, security and cleaning services and give these out. None of these are likely to make a meaningful contribution to GDP growth, albeit a great starting point. The problem is that it is seldom taken beyond this point.
A thorough analysis is required of what is purchased. The value is initially irrelevant. What is more important is whether the SME's have the necessary skills. Too often they do not have the skills, and this leads to delivery failure and the enhancement of the "SME's are bad suppliers" theory.
Careful analysis of the governments purchasing needs to be made and then suitable SME's sought to provide these goods and services. Thereafter, it is necessary to match this skills base to large private enterprise purchasers as well, and to expand the market for the SME's beyond just government. These SME's need to create sound sustainable businesses, and this requires ongoing business from multiple sources.
Government need to understand this and look at this task which is currently treated in a poor manner, in a more serious manner.
Rob Smorfitt
SMES is government spending good for them - To learn more about this author, visit Dr. Rob Smorfitt's Website.
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I see it happening all the time. Governments issue edicts, laws and regulations, attempting to force their internal purchasing departments to support SMME's.
One of two things occurs. Firstly they attempt to set a financial limit, without any thought in to how the amount is derived. Secondly they take the tried and trusted, gardening, security and cleaning services and give these out. None of these are likely to make a meaningful contribution to GDP growth, albeit a great starting point. The problem is that it is seldom taken beyond this point.
A thorough analysis is required of what is purchased. The value is initially irrelevant. What is more important is whether the SME's have the necessary skills. Too often they do not have the skills, and this leads to delivery failure and the enhancement of the "SME's are bad suppliers" theory.
Careful analysis of the governments purchasing needs to be made and then suitable SME's sought to provide these goods and services. Thereafter, it is necessary to match this skills base to large private enterprise purchasers as well, and to expand the market for the SME's beyond just government. These SME's need to create sound sustainable businesses, and this requires ongoing business from multiple sources.
Government need to understand this and look at this task which is currently treated in a poor manner, in a more serious manner.
Rob Smorfitt
SMES is government spending good for them - To learn more about this author, visit Dr. Rob Smorfitt's Website.
Like this article? Share it with your friends
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