Small and Medium-Sized Enterprises are the Driving Force of the Global Economy

Small and medium sized enterprises are the economic engine of growth. So how are these entities optimizing their support services?

SMEs are Driving Business

According to the International Labor Organization and the U.S. Small Business Administration, Small and Medium-sized Enterprises account for more than 90% of businesses across the globe, for 99% of all businesses in the European Union, and for 99.7% of U.S. businesses. As such, they are critical for social and economic development in creating jobs, stimulating entrepreneurship, promoting growth, and driving innovation.??

What’s a "Small" and "Medium" Enterprise?

The terms "small" and "medium" in reference to a size of business vary within the manufacturing, agricultural and service sectors. Generally, number of employees and annual revenue are used to distinguish sizes, as established by U.S. government institutions. Manufacturing and non-exporting firms qualify as SMEs if they have fewer than 500 employees; most export service firms qualify with fewer than 500 employees and $7 million or less in revenue; farms qualify with fewer than 500 employees and less than $250,000 in revenue.??

SMEs Impact Economy

As larger organizations face more stringent budgets, this has a knock-on effect for the economy, through reduced orders to SMEs. Consequently, SMEs are challenged to stay afloat, buffered by dual forces of weaker demand and pressure on working capital.

Many governments are now recognizing that SMEs need assistance for the benefit of the economy, and are providing financial support through subsidized loans and other such programs.??

SMEs as Exporters

SMEs are responsible for 30% of U.S. merchandise exports. Wood products, clothing and accessories are popular SME exports, with electrical products, machinery and chemicals the main exports to neighboring Canada and Mexico. U.S. SMEs export merchandise in highest concentration to Israel, Hong Kong and Switzerland. Canada and the United Kingdom are large markets for U.S. SME exports of finance, insurance and other professional services.

SSON and SMEs

SSON has recognised SME's roles in bolstering economies at home and abroad, and as such, we are making sure that we promote the kind of content that is directly relevant to small and medium-sized enterprises. While people are people, a process is a process, and technology is technology, we do understand that relatively smaller sized organisations may be driven to make different choices. To help you make those decisions, and to support you in optimising non-core/back office business activities, we are tagging relevant content online as "SME", and are also recruiting columnists and advisors to help SMEs make smart strategic operational decisions. We'll also be inviting more vendors for this market to introduce their solutions via our website.

John Kirk has been writing a column that covers the kinds of challenges SMEs face, and this week summarizes how to prepare for 2014 – after a tough 2013. We are also actively building up a stable of columnists for SMEs.