Chapter 1 CAMBODIAN SMALL AND MEDIUM SIZED ... - ERIA

6. CONCLUSIONEvidence from more economically developed Asian nations has demonstrated thatSMEs have considerable potential for driving sustainable and equitable economicgrowth. Under the right conditions, entrepreneurs, regardless of background, can startand grow SMEs, generating profits and creating employment opportunities. SMEs driveindustrial progress, improve an economy’s ability to deal with shocks and arerecognised as breeding grounds of innovation.With the expansion of globalisation manufacturing SMEs in Cambodia arefacing increasing international competition. These enterprises need to improve qualityand efficiency of output to international standards to survive. A range of barriers aremaking it difficult for the nation’s SMEs to compete with imports, and up until recentlythere has been little in the way of specific assistance for SME development.In 2004 the Cambodian government formed the SME Sub-Committee and theSME Development Framework was created. This framework is the first attempt by thegovernment of Cambodia to identify barriers and introduce measures specific topromoting development of the country’s SMEs.Three main barriers to SME development have been identified; weaknesses inthe regulatory and legal framework; limited SME access to finance; and a lack of SMEsupport activities. A number of policies have been implemented and recommended toovercome these obstacles to SME development. These include general policies toimprove the Cambodian business environment.As policies have been implemented and the Cambodian business environmenthas improved the country’s SMEs have shown signs of developing. The number ofSMEs in Cambodia as well as the size of many of these enterprises has increased sincethe mid 1990s.To continue this trend and to further improve the competitiveness of thenation’s SMEs the government needs to continue removing the barriers to doing32