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Economic Impact of SMEs

Extracts from this document...

Introduction

The Economic Impact of Small and Medium Enterprises Table of Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Small and Medium Enterprises (SMEs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Economic Importance of SMEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Government Support to SMEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Economic Impact of SMEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Drivers for SMEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Economic System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Socio-Cultural Core Values . . . . ...read more.

Middle

By raising government efficiency and effectiveness in providing assistance to small and medium enterprises throughout the country, at the least cost; h. By promoting linkages between large and small enterprises, and by encouraging the establishment of common service facilities; i. By making the private sector a partner in the task of building up small and medium enterprises through the promotion and participation of private voluntary organizations, viable industry associations, and cooperatives; j. And by assuring a balanced and sustainable development through the establishment of a feedback and evaluation mechanism that will monitor the economic contributions as well as bottlenecks and environmental effects to the development of small and medium scale enterprises. Economic Impact of SMEs Over the years, SMEs have showed notable effect to the Philippine economy. According to the Department of Trade and Industry (DTI, 2004), the SMEs comprise 99.6% of all the registered business enterprises all over the country, they have contributed 32% to the total Gross Domestic Product; and generated 70% of the total employment in the country (Figure 2. DTI (2004): Size of SMEs). Though SMEs' value added is 32% to the overall production of the country, it is still 47% lower compared to the value added of the registered large enterprises that only comprise .04% of the total registered businesses in the entire country, the weightier side of the economic scale however, favors employment (Figure 3. DTI (2004): Employment and Value Added of SMEs). In comparison with the other Asian countries, except for value added production, the Philippines ranks third in terms of SME establishments and ranks fourth in terms of employment (Figure 4: (DTI 2004): Philippine SME Ranking With Other Countries). Drivers for SMEs Economic System Following the line of thinking of Gall (1977), "systems attract systems-people", which would mean that a smaller system will have the opportunity to survive and grow within a bigger system that is friendly or akin to it. ...read more.

Conclusion

With the number of students now enrolled in business schools like the Ateneo de Manila University, example, just in a class of twelve students taking Economics Management. Should every student is able to put up a business and employ ten workers, then at the end of the day there are one hundred and twenty persons had a job. Of course, there are other serious problems to consider like birth control and rapid population growth, but at least these students are doing something rather than nothing. Wise men say: "if you are not part of the solution, then you are probably part of the problem". Figures Figure 1. Categories of SMEs Category Total Asset (PhP) Micro Less than 3,000.000.00 Small 3,000,001.00 to 15,000,000.00 Medium 15,000,001.00 to 100,000,000.00 Figure 2. DTI (2004): Size of SMEs Figure 3. DTI (2004): Employment and Value Added of SMEs Figures Figure 4: (DTI 2004): Philippine SME Ranking With Other Countries Figure 5: Cash Flow Pattern of an Asset Figure 6: Cash Flow Pattern of Liabilities Figures Figure 7: Cash Flow Pattern of a Person Still at Home Figure 8: Cash Flow Pattern of a Person in the Middle Class Figures Figure 9: Cash Flow Pattern of a Wealthy Person Reference Section Printed Sources Hoecklin, L. (1995). Managing Cultural Differences: Strategies for Competitive Advantage. E.I.U. Addison-Wesley Publishing Company. Kiyosaki, T. R. & Lecher L. S. (2001). Rich Dad Poor Dad. New York, NY 10020. Time Warner Company. Medina, R. G. (2003). Entrepreneurship and Small Business Management. Quezon City. Philippines. Rex Printing Company, Inc. Naisbitt, J. (1996). Megatrends 2000. New York, NY 10020. Simon and Schuster Inc. Sanchez, B. (2007). 8 Secrets of the Truly Rich. Quezon City. Philippines. Shepherd's Voice Publication, Inc. Online Sources Department of Trade and Industry (2004). SME Agenda. From the Internet: http://www.business.gov.ph/SME_Agenda_SMEPlan.php Gall, J. (1977), Some Laws of Systemantics. From the Internet: http://en.wikipedia.org/wiki/Systemantics Magna Carta For Small Enterprises. Published by the: Small Business Guarantee And Finance Corporation. From the internet: http://www.dticebu.net.ph/Library/Magna%20Carta%20for%20Small%20Enterprises%20-%20RA%206977.pdf ?? ?? ?? ?? Economic Impact of Small and Medium Enterprises Page 2 of 20 ...read more.

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