Small and Medium Enterprises (SMEs) are considered to be one of the principal driving forces in the economic development of any country. Anecdotal evidence suggests that despite the decline in the large sector growth rate worldwide, SME sector has managed to grow; since they are relatively flexible and can adapt quickly to the changing market demand and supply situations. Their ability to generate employment and to diversify economic activity can make a significant contribution to exports and trade, create employment as well as alleviate poverty. SMEs bring more diversity to economy and facilitate technological innovation and provide significant opportunities for the development of new ideas and skills.
Which areas of SMEs need to be more focused in policy in Pakistan?
Despite their economic importance, the SMEs in Pakistan suffer from a variety of weaknesses, which have constrained their ability to adjust to the economic liberalization measures introduced by the Government of Pakistan and to take full advantage of rapidly expanding markets of the world. These weaknesses include a relatively narrow base of the formal SME sector and its focus on low value-added products; the absence of an effective business information infrastructure; the inadequacy of the existing support services for entrepreneurship development and promotion; and a relatively low level of integration in global value chains.
The large-scale industry in Pakistan has its focus on large markets and is supported by complex regulatory support systems. Small and Medium Enterprises, on the contrary, suffer from low productivity, high closure rate and small net worth. Therefore, their industrial base must be strengthened to improve the differences which exist between them and large enterprises through sustained growth, so that these SMEs can later graduate into the formal sector.
Do you think that ICT can help SMEs to play a better role in socio-economic development of any developing country? If so, in which areas ICTs have the potential?
Yes, as explained earlier SME sector is directly linked to the socio-economic development of any country and ICT can help SMEs a lot to play more effective role in this regard especially in the developing ones. However, the need of the hour is how to bridge the digital divide.
In the developing countries, SMEs can play a vital role for the augmentation of GDP if resources available to them are utilised at their best. For the utilisation of such resources and developing futuristic plans, ICT can bring the real time value addition to the SMEs in terms of bringing ease to their resource planning and providing certain authentic information and statistics for making crucial business decisions. ICT can enable and empower this sector with the right technology tools to contribute more, increase their own productivity and be more competitive.
ICT can bring socio-economic alleviation for the SMEs in developing countries by providing certain ways of market-research and making their existence available on the Internet. This will not only help to boost their business proposition but also bring benefits to the growth of cyber economy of the SMEs of developing countries.
How much support has been provided so far in Pakistan by ICT in improving and encouraging SMEs? Please provide some specific examples.
ICT has been identified as one of the key drivers of the economy by Government of Pakistan. In last six years, the government has undertaken several initiatives to increase computer literacy to attract international investments and equip Pakistan with an
IT savvy workforce pool. Several forward looking private companies have also taken the lead and are working in conjunction with the Government