MICRO AND SMALL ENTERPRISES IN LEBANON

III.12.6 Value-added and technologyTechnological advancement is positively related to value-added. That is, the more updated thetechnology in the MSE is, the higher is the value-added of the enterprise: it amounts to $3,193/monthin those MSEs that access the latest technology, compared to $992/month for those enterprises that donot. The pattern that emerged illustrates an increasing value-added rate correlated with technologyusage. The value-added per enterprise that uses latest technology is 3.2 times that of enterprises thatdo not use the latest technology and 2.1 greater than the average value-added for surveyed MSEs(Table 21).Table 21: Value-added per MSE and Worker, and Use of Latest TechnologyDo you use the latest technologyYes No TotalWeighted value added per worker at interview time in US$ 764 473 545Value added per enterprise at interview time in US$ 3,193 992 1,538Valid N 144 436 580Average number of persons engaged 3.1 2.1 2.4This is an expected impact as several studies have shown the effects of technological advancement onthe productivity of enterprises. There is, however, a point of caution, as the impact of technology hasnot been isolated in surveyed MSEs, hence it is difficult to assume that this increase in efficiency issolely due to the change in technology usage.The monthly added value per worker also increases with technological use, and is 1.6 times in thoseenterprises that use latest technology compared to those that do not. In fact, the value added perworker in enterprises using the latest technology amounts to $764/month compared to $473/month inenterprises that do not use it. In addition, the average value-added per worker in enterprises that uselatest technology is 1.4 times greater than the national average ($536/month for workers as a whole) .Similar to the pattern set above, the average value-added for enterprises with up-to-date technology ismore than triple that for enterprises that use traditional technology, and 28% higher than those usingmodern technology. (Refer to Table above)The analysis per worker reveals similar results, where increased return is manifested, however, withless drastic differences in value-added. Based on value-added per worker, the difference betweentraditional enterprises and up-to-date technology is almost two fold. However, the difference betweenmodern technology users and up-to-date technology users is more manifested with up-to-dateenterprises having 42% more value-added per worker than modern enterprises. Indeed, the valueaddedper worker in enterprises using modern technology is $591/month compared to $436/month intraditional ones and $841/month in those using up-to-date technology.III.12.7 Value added and internal organizationOrganization, and subdivision of enterprises into departments has an impact on the value-added of theMSE. The more organized the enterprise, the more likely it is to have a higher value-added, where thelatter for enterprises that have specific organizational structure is 7,206 per enterprise, and 1,288 perworker. This is also correlated with the size of the MSE, as smaller MSEs do not have any need forinternal organizational structures.These figures have to be treated with caution due to the low number of MSEs indicating that theyhave specific internal organization. However, the table below serves to give an illustration of possibleimpact of organization upon the value-added of enterprises, and not to provide a nationwide indicativefigure (Table 22).Table 22: Value-added and Existence of Specific Departments within EnterpriseNo Yes TotalValue added per enterprise at interview time ($) 1,288 7,206 1,492Value added per worker at interview time ($) 511 1,142 533Number of observations 589 22 61130