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SMEs - their future in the world economy
| Guest post by: Dr. Rob Smorfitt |
Article Overview: The next decade or two will become known as a period of economic decentralization. This refers to the breakdown of the large corporate organisation for a number of reasons, in such a way as to lead to economic decentralisation. Why should this occur?
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Free Download - SMEs – SMEs struggling in South Africa. Why? By Dr. Rob Smorfitt |
SMEs - their future in the world economy
The next decade or two will become known as a period of economic decentralization. This refers to the breakdown of the large corporate organisation for a number of reasons, in such a way as to lead to economic decentralisation. Why should this occur?
The growth of Personal Businesses will increase exponentially over the next few years. These are businesses which have no payroll, which in the USA is already at an incredible 70% of SME’s. What would cause this increase? There are a number of factors.
Baby boomers will be leaving on retirement and taking their skills with them. As they form such a large part of the population they will need to be used as consultants and outsourced operations for larger organisations.
In South Africa whites who believe they have no future in large organisations due to affrimative action legislation, will continue to leave to start new businesses, causing a further skills shortage in these businesses, leading to a similar situation as for the baby boomers.
In developing countries, skills shortages generally due to poor education systems, emigration, AIDS, TB will also result in a further move to personal businesses, as those people with skills find themselves in demand. They will quite likely see massive increases in their income streams as a result. Consequently these people will become time shared by a number of companies.
Women hitting their heads on the glass ceiling will similarly move into their own businesses where there are no limitations.
Youth want their own business rather than a boss, and also want the perceived benefits of owning their own business, which includes a more relaxed life style and improved quality of life from controlling their own destinies.
Emigration and immigration will lead to the further globalisation of SME’s as emigrants and immigrants restore links with the networks in their previous domiciles, and create new business opportunities for themselves, as they generally find it easier to do so than trying to get a job in their new country.
The Internet has made the road warrior SME owner a reality. Similarly it allows and creates further opportunities for economic decentralization within large organisations. Why do banks need branches? Why can we not withdraw and deposit at our local supermarket if we really need cash, especially with Internet and cellphone banking.
SME's will most definitely play a bigger role in the world economy in the future. The question is whether you will be one of them.
Rob Smorfitt
What can business and governments do to promote SMEs?
Leverage Subject Matter Experts
Improving business conditions - Increasing SME Access to Finance: A Four Pronged Approach
Restricted Access to Finance
5.2.1 The MIT-SME section: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Article Tags: entrepreneur, entrepreneurship, future, future of SMEs, SME, SMME, Smorfitt
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About the Author: Dr. Rob Smorfitt RSS for Dr. Rob's articles - Visit Dr. Rob's website Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
Click here to visit Dr. Rob's website  
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