Nurturing a small business in the current economy

A recent World Bank report notes that, “Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. Formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included.” The Annual Report on European Economies 2015/2016 cites that “SMEs form the backbone of the EU28 economy.

In 2015, just under 23 million SMEs generated €3.9 trillion in value added and employed 90 million people. They accounted in 2015 for two thirds of EU28 employment and slightly less than three fifths of EU28 value added in the non-financial business sector.” The Report goes on to say “However, most SMEs continue to encounter the same challenges: bureaucracy, disinterest and neglect by governments, intense financial scrutiny, and lack of meaningful participation in real opportunities. While the EU, through its Sixth Framework Programme (FP6) may have allocated €2,100 M for SME participation and to support research and innovation for the sector, SMEs remain a neglected group in other environments.” Based on a study by the World Bank Group it is estimated that in emerging markets there are 365-445 million Micro, Small and Medium Enterprises (MSMEs). Of these, 25-30 million are formal SMEs while 55-70 million are formal micro enterprises. Some 285-345 million are informal enterprises.

It notes that there are many advantages to moving informal SMEs into the formal sector such as better access to credit and government services for the SMEs and higher tax revenues and better regulation for the economy.

In Trinidad and Tobago, many SMEs have difficulty in moving forward because of a limited resource base. Critical areas that must be addressed include – but are not limited to – credit facilities, infrastructure, technology and quality improvement, as well as marketing assistance. An examination of each of these factors can determine why many of our SMEs never move beyond the micro and small classification, and in some cases, may eventually even become part of the shadow or informal economy. While at the policy-making level there has been much discussion over the past years, this has not led to a truly enabling environment with support mechanisms in place.

Continued prosperity in the region requires the provision of such critical support to strengthen the SME sector.

With an SME membership of close to 70% the TT Chamber can be said to have a vested interest in assisting with the survival and growth of this sector. Many informational and educational sessions are targeted to SME operators, and our Nova Committee is in fact charged with developing the Chamber’s SME base.

Through workshops, seminars and conferences, SMEs are able to gain valuable insight into the challenges and solutions to many aspects of operating and moving the business forward.

Workable tools and methods are shared by small business owners who have been through the rigours and hardships that are encountered at all stages of the growth path. Nova’s upcoming workshops on Marketing and Productivity are a must on this year’s calendar, as well as its new Lunch & Learn series where SMEs can meet a successful and highly regarded business leader in a closed forum for a personal, up-close discussion.

SMEs are encouraged to participate and we invite interested parties to call the Chamber at 637 6966 for further information