SMEs need better management practices

Editor, RE: “SMEs are best for any developing economy” (The New Times, August 27).

Editor,

RE: “SMEs are best for any developing economy” (The New Times, August 27).

It is a false “either or” binary choice; both large and small and medium-sized enterprises (and even micro, mostly family owned firms) are needed. And all vibrant economies, whether developing or highly advanced possess companies on the entire continuum of size.

The most advanced economies, such as Germany, Japan and Switzerland—to give just a few examples—have found a way to encourage very high integration of their SMEs with their larger enterprises as suppliers, subcontractors or as clients.

This helps the larger enterprises to stick to their core businesses, farm out non-core activities to suppliers and sub-contractors, which increases the larger companies' productivity and profitability, and, in turn, enables their SME suppliers and subcontractors to grow their own businesses and eventually graduate into the larger ranks themselves.

Resources and human capacity to manage large complex systems, including large, integrated commercial enterprises, come from doing, and learning from mistakes to improve your management practices. They are rarely acquired from a classroom.

Kagaju

 

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