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GDB # 01                                                                                     Dated: Nov 06, 15
Graded Discussion Board
SME MANAGEMENT (MGT601)

Dear Students,
This is to inform that Graded Discussion Board (GDB) No. 01 will be opened on November 12, 2015 for discussion and last date for posting your discussion will be November 13, 2015.

Topic/Area for Discussion
“SME & Role of Government”

This Graded Discussion Board will cover first 08 lessons.
Best of Luck

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Replies to This Discussion

u can mention in any way but the answer should equipped with strong arguments . :)

ThanKs :)

u r welcome
best of luck :)

is this ans is correct ?

There are about 3.2 million enterprises in Pakistan, of which about 3 million (93 percent) are SMEs. SMEs spread across the economy with varying density: Most are in wholesale and retail trade and restaurants and hotels (53 percent), followed by other services (27 percent) and the manufacturing sector (20 percent).” It also reveals that in Pakistan SMEs contribute more than 30 percent to the GDP and 25 percent to the country’s total export earnings, and they employ close to 70 percent of the labor force in the manufacturing industry, services, and trade.
In spite of SMEs enduring effect on economy, employment generation and its contribution to GDP as many advance countries like (Japan, South Korea, Taiwan and Hong Kong) are enjoying, we are far behind that level. Being as a nation, we haven’t able to achieve that level or even far behind that.
However the importance that should be given to SMEs is lacking in Pakistan as government has more focus on large scale industries. Too many glitches hinder the growth of SMEs (At government level as well as at individual level), that refrain this sector from smooth growth. Many initiatives and plans are underway to lift this sector, but no real activity seen so far. The result is higher unemployment rate, lower economy sustainability, increasing idle labor force, thus lack in generating desired results. Many initiatives can be taken in this regard but these only exist on papers and no serious actions yet to be taken by government.

another solution 

The paper is concerned with the role of government in relation to SME development in economies at different stages of market reform. It demonstrates that, as in mature market economies, the state is a major factor influencing the nature and pace of SME development, although more through its influence on the external environment in which business activity can develop than through direct support measures or interventions. Survey evidence from the Ukraine, Belarus and Moldova suggests that many enterprises are set up, survive and sometimes even grow despite government, because of the creativity of individuals in mobilising resources and their flexibility in adapting to hostile external environments. The problem is that in these situations the number of firms remains small and their contribution to economic development rather limited. In such a context, government still has to create the framework conditions for private sector development to become embedded and sustaining. At the same time, in countries where market reforms are at a more advanced stage (such as Poland), current priorities for government with respect to the environment for SME development include bringing legislation and regulations in line with EU standards in preparation for EU accession, encouraging the banking system to adapt and recognise the SME sector as a potential market for a range of financial products, facilitating the development of venture capital funds for that minority of SMEs that seek external equity, and working in partnership with the private sector to establish an effective support infrastructure. Although there may be a case for selective interventions in both types of circumstances, direct support measures are not the main role for government in either case.

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