What do we want from small and medium enterprises?

Haider Al Lawati -
haiderdawood@hotmail.com -

The Sultanate and other countries in the region are showing great interest in small and medium enterprises (SMEs) because of the growing trend of self-employment among the GCC nationals.
In the GCC region, most businesses are still managed through hidden trade by expatriates who compete with emerging SMEs and business ventures.
Therefore, the latest SMEs forum held here has recommended the need to strengthen SME competitiveness and empower national competencies in preparation for the next phase, which will require setting foot onto the global market.
This will be possible by refining services or final products, establishing sustainable development and obtaining international quality certificates.
The number of SMEs in the region is increasing every year due to their importance in the economy, reaching 34,894 establishments in the Sultanate at the end of June this year as against 31,835 at the end of 2017.
Most of these SMEs are registered in the Muscat Governorate, followed by the other governorates, according to the data published by the Public Authority for SME Development (Riyada).
SMEs play a key role in stimulating economies, developing communities and providing secure employment opportunities for young job-seekers in fields other than the government sector.
This has led governments to pay more attention to SMEs by increasing their numbers and enhancing their activities as well as developing them with foundations that ensure the growth of annual production and activating their role in diversifying projects needed by communities.
SMEs have been contributing significantly to GDP of the world’s largest economies such as China with 60 per cent, Germany 54 per cent, Japan 52 per cent and the United States 50 per cent.
Due to the importance of SMEs, their legal and legislative system must be constantly updated. In addition, a business environment should be prepared to encourage SME continuity and enable them to engage in high value-added partnerships of national economies.
To achieve greater efficiency of SMEs, it is necessary to enable their national competencies along with training young entrepreneurs to ensure sustainable growth and development of SMEs.
Dr Ahmed bin Mohsen al Ghassani, Chief Executive Officer of Riyada, believes SMEs do not need support as much as they do continuity and sustainability, since they contribute 60 per cent to the GDP in many countries around the world. This percentage in the Sultanate — and perhaps across the GCC — is no more than 20 per cent.
“This is a gap that must be reduced in order to reach the global ratio,” he said.
“Moreover, SMEs account for 50-60 per cent of the world’s job market, but only 15 per cent in the Sultanate. The labour market in Oman is certainly capable of absorbing many job-seekers, whether through the establishment of or employment in projects,” he said.
Dr Ahmed noted SMEs must continuously increase the level of services they provide and meet the GCC and global requirements that enable them to enter the labour market and secure contracts from major companies such as oil and gas.
“SMEs are now empowered in the market and they operate in accordance with international requirements,” he said.
It is no secret some SMEs face a dilemma that needs to be identified in order to provide required assistance for them to face the challenges and difficulties ahead.
SMEs are called that for a reason: their owners are small investors and entrepreneurs who seek opportunities to set up a small business that can one day grow to become a large enterprise.
This can be achieved if large enterprises stop competing with emerging SMEs and not monopolise their businesses. SMEs in the region need urgent solutions in the event of bankruptcy to overcome challenges, which will help revive and enhance their activities and operations.