An
enabling environment is an opportunity that should be utilized by the micro and
small enterprises in Kenya. With changing governments, which come with promises
of a better tomorrow and definition of new business policies, reconstruction of
economy, improvement of infrastructures and security, small businesses are
expected do well.
The legal and economic framework in which enterprises operate is crucial to
their performance. In the literature on enterprise development, it has been
argued very forcefully that the legal framework of many countries serves as a
barrier against enterprise. In many cases across Africa, the reduction of open
hostility has been more important for smaller enterprises than any positive
program of engagement from the state (King and McGrath 2002).
But what constitutes an enabling economic environment? In theory, structural
adjustment and trade liberalizations were supposed to bring benefits to micro
and small enterprises. However, there is evidence across Africa of both
negative and positive impacts of these policies on SME development. It can
perhaps be said as a generalization that those with better skills and
knowledge, and located in strong market niches, have benefited. On the other
hand, those faced with low barriers to entry have seen a saturation of markets
and growing poverty (King and McGrath 2002).
According to Ngahu (2000), SMEs are obviously incapable of sourcing,
evaluating, and adapting technologies effectively. The government policy
should, therefore, aim to develop these capabilities in SMEs through supportive
institutions. Policy can encourage the development of assistance programs to
facilitate SMEs' access to resources, information, training, and technology.
Further, policy should promote the development of technologies appropriate for
SMEs. Although it is possible to develop policies designed to improve the
circumstances of SMEs, it may be more feasible to support the development of
technologies compatible with the SMEs' circumstances.
Policies, says Ngahu (2000), should aim to encourage and promote the development
of local technologies. Emphasis should be on the promotion of the local tool
industry to reduce reliance on imports. SMEs are said to face a "liability
of smallness." Because of their size and resource limitations, they are
unable to develop new technologies or to make vital changes in existing ones.
Still, there is evidence that SMEs have the potential to initiate minor
technological innovations to suit their circumstances. However, for SMEs to
fully develop and use this potential, they need specific policy measures to
ensure that technology services and infrastructure are provided. Further,
research and development institutions that are publicly funded should be
encouraged to target the technology needs of SMEs.
In line with the statements the goverment plays a key role in creating an enabling environment that suits best the SME,s in the industry especially with the business outsourcing as the new entry in the markets.
The SME's rely on the basic pillars that help move the business and in coexistence with the others this may include the
economical impact
business pull factors
Cash flow
Managerial tactics in decision and product assimilation into the market
No comments:
Post a Comment