Doing Business with the World - Mapeo de Promotores de RSE

Enterprisedevelopment“Business is the most importantengine of economic change. Itbrings employment, goods,revenues, knowledge and skillsdevelopment. We must alsorecognize that the most importantrole is probably not that played bythe multinationals, but by the smalland medium enterprise sector, theSMEs. We as global companies canprovide the catalyst to partner withSMEs to mutual benefit. We canaccess their local expertise andmarkets; they can access ourtechnologies and business skills forlocal momentum.”Michael Pragnell, CEO, SyngentaThe global viewLocal entrepreneurs, microenterprisesand small and mediumenterprises (SMEs) form thebackbone of global economicactivity. These are small firms,defined either by their headcount –between 10 and 500 employees – orby their turnover. In OECDeconomies, they account for 95% offirms, 60%-70% of employment,55% of GDP and generate the lion’sshare of new jobs (see Figure 16).In developing countries, more than90% of firms outside the agriculturalsector are SMEs and microenterprises.They generate asignificant portion of GDP. 25SMEs contribute to wealth creationand generate tax revenues. A healthySME sector equates to a reduced levelof informal activities which, in manydeveloping countries, account for a significant but hidden portion of GDP –anywhere between 30% and 70%. These are economic activities conductedoutside the regulatory framework and include everything from casual labor tothriving SMEs and occasionally illegal activities (see Figure 17).SMEs bring social benefits, particularly in developing countries. They often havea vested interest in community development. As local entities, they draw uponthe community for their work force and rely on it to do business. Theyunderstand the communities within which they operate and are able to providegoods and services tailored to local needs and at costs affordable to local people.They are also a good source of employment for women, young people or lowskilledworkers who usually make up the greatest portion of the unemployed inemerging economies.SMEs can be valuable partners for large corporations. They are an importantsource of local supply and service provision. Their extensive local knowledgeof resources, supply patterns and purchasing trends makes them a goodsource of market information. Similarly, they represent an important sourceof innovation. They often occupy specialized market niches and followcompetitive strategies that set them apart from other companies. Theiractivities can include re-engineering products or services to meet marketdemands, exploring innovative distribution or sales techniques, ordeveloping new and untapped markets.Source: World Bank.2070%60%50%40%30%20%10%0%Low incomecountriesEmploymentGDPMiddle incomecountriesHigh incomecountriesFigure 16: SME contribution to employment and GDP – median values50454035302520151050Percentage ofofficial GDPAfricaCentral andSouth America1999/20002000/20012001/2002AsiaTransitioncountriesFigure 17: Average size of the informal economy as a % of GDPHighly developedOECD countriesSource: Schneider, Friedrich. “Size and Measurementof the Informal Economy in 100 Countries around theWorld”. Working Paper. 2005-13. Center for Researchin Economics, Management and the Arts, JohannesKepler University of Linz. 2005.