SMEs in Bahrain: Prospects for Future Development?
Bahrain's Small and Medium Enterprises Society has advocated for greater SME support and development in the tiny Gulf nation (Courtesy of Bahrain Small & Medium Enterprises Society)
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The small and medium enterprises (SMEs) are important in both the global and domestic contexts as they contribute a major share in terms of output and employment, a top minister said.
Industry and Commerce Minister Dr Hassan Fakhro was speaking after opening a conference titled "Empowerment of SMEs in Knowledge-Based Economy". It was organised by Price Event Management and supported by Tamkeen.
Dr Fakhro said the global importance of SMEs spans both developing and developed countries, reported the Gulf Daily News, our sister publication.
"As the 14th century proverb has it 'Great trees from acorns grow'. However, unlike oak trees which take generations to progress from a small acorn to a medium-sized and then to a large tree, SMEs have the benefit of the 21st century environment," he remarked.
"SMEs do not require generations of slow growth for a small start-up business to get to the position of becoming a large public company," he stated.
"There are so many examples of successes, in particular those that have been technology-driven, with Microsoft as an obvious example," he added.
"Today technology, the Internet and global markets, are levellers that enable businesses to leap-frog generations of slow growth," said Dr Fakhro. "But it cannot happen in a vacuum," he noted.
"The domestic infrastructure, in particular, must be conducive to the organic development of small enterprises, there must be access to new technologies, the legal and administrative infrastructure needs to be supportive, information needs to be timely and available and the hard-infrastructure such as transport and communications networks as well as industrial assets needs to be competitive," he observed.
"There still remains the 'soft-underbelly' of businesses which can often be their downfall, "said the minister.
"Companies must ensure that their accounting, administration, marketing and logistics operations are up to the task. Otherwise what maybe a promising beginning, may quickly end up as yesterday's news," he added.
Dr Fakhro said one of the most prevalent issues facing SMEs today was the access to finance, "particularly in developing markets where perhaps there is an absence of angel investors and where commercial banks have been somewhat soured from lending after the recent financial crisis."
"This is an issue which needs careful handling between the government and private sector actors, so as to ensure that funding does not inhibit SME growth, yet at the same time does not place any unwarranted risk on the financial system," he added.
"There are other areas in which the private sector can help in facilitating development of SMEs, either on a sector basis or generally, the minister told the gathering.
"For example, sector-specific associations can provide some weight in negotiating in international markets, and can foster co-operation between enterprises in areas such as marketing and logistics," he added.
The minister noted that larger companies can play an important role in including SMEs in their supply chains, sourcing components and other production elements domestically from them.
For its part, the government is already doing what it can to make its procurement more accessible to SMEs, he said.
Dr Fakhro affirmed that the Industry and Commerce Ministry continues to work together with its partners at the Bahrain Chamber of Commerce and Industry, the Economic Development Board, Tamkeen, Bahrain Small and Medium Enterprises Society and others on issues of particular relevance to SMEs.
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