Ahmed Hassan Omar
2019 / 11 / 13
The empowerment of SME’s & Entrepreneurs for Competitiveness
Dr. Ahmed Hassan Omar
During the last decade, interest in Small and Medium Enterprises (SMEs) has risen
dramatically, with the majority of developed and developing countries establishing a number of policies and programs to enhance their competitiveness and ensure the active participation of these enterprises in the economy. It also leads to the development of entrepreneurship, industry and the rural economy. This interest arises from the fact that SMEs form a growing segment of the economy, and as such significantly contribute to job creation and return investment into the national economy, as well as contributing to poverty alleviation strategies and export growth. As a result, SME development has been on the forefront of the Government of Egypt s agenda.
Despite the economic challenges that Egypt went through during 2016, entrepreneurship remained a positive area in the economy. Some progress was made towards growing entrepreneurship in Egypt, particularly in creating broader awareness and expanding the pipeline of entrepreneurs launching their new business. There is a growing interest in entrepreneurship as an engine for equitable and sustainable economic growth among policy makers, government agencies, donor organizations, financial institutions, entrepreneurship support organizations, universities and other stakeholders.
SMEs dominate Egypt’s private sector, accounting for approximately 98% of non-agricultural economic units and 81% of the labor force outside the public sector. Given their size, they are the only engine of growth that can contribute significantly to raising industry’s share of employment in GDP. And to serving as a source of employment generation, especially for young people, thus “promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”.
SMEs are the cornerstone of most economies. They account for about half of global GDP and % 60–%70 of employment. In developing countries, SMEs contribute to the SDGs through the employment opportunities they generate,
Entrepreneurship is a key driver for economic growth, social inclusion, youth engagement, job creation and competitiveness.
In terms of sectoral distribution, most early-stage entrepreneurs are concentrated in three sectors: wholesale and retail distribution (50.3%, ranking 27th), agriculture (13.0%, ranking 10th) and manufacturing (12.9%, ranking 10th)-;- collectively representing more than 76% of all early stage entrepreneurs in Egypt.
It is noticeable that the share of knowledge-intensive industries, such as ICT, finance´-or-professional services is very-limit-ed among new startups
Entrepreneurship became a more visible area of interest for policy and practice for government agencies, donor organizations, universities, civil society organizations and other ecosystem actors
Significant progress was made on the regulatory reform side, such as the new investment law and industrial licensing law, and several pilots were implemented to introduce entrepreneurship education at schools, universities and technical & vocational training (TVET) schools and launching of new initiatives and organizations to support entrepreneurs in areas beyond Cairo, e.g., Alexandria, Assuit, Mansoura and Suez
SMEs without internet connections cannot take advantage of services provided through the platform economy.
SMEs without access to adequate and affordable transport infrastructure is impossible´-or-unaffordable to trade.
More than 90 percent of enterprises in Egypt are micro´-or-very small, employing fewer than five employees. Micro and Small Enterprises (MSEs) provide almost 60 percent of jobs and three quarters of the national value added
The Micro, Small & Medium Enterprises (MSME), is expected to be the backbone for the existing and future high growth businesses with both domestic and foreign companies investing in the ‘Make in Egypt ’.
-;- World Economic Forum (2015). Leveraging Entrepreneurial Ambition and Innovation: A Global Perspective on Entrepreneurship, Competitiveness and Development (http://www.weforum.org/reports/leveraging-entrepreneurial-ambition-andinnovation-global-perspective-entrepreneurship-compe).
-;- Egypt National Report 2016-2017, GEM, AUC, Cairo, Egypt 2017
-;- SME comprehensive outlook, Executive Summary International Trade Centre Geneva 2019 ,
-;- PROMOTING SME COMPETITIVENESS
-;- IN AFRICA, International Trade Centre 2018
-;- Viral M. Pandya, Comparative analysis of development of SMEs in developed and developing Countries, India, 2014.
-;- SME Competitiveness Outlook 2018: Business Ecosystems for the Digital Age ITC, Geneva, 2018