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GMS- SME Business Networking- Challenges and Prospects


GMS- SME Business Networking- Challenges and Prospects Madhurjya Kumar Dutta Program Manager, Trade & Investment Mekong Institute MK Dutta September 2010 * – PowerPoint PPT presentation

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Title: GMS- SME Business Networking- Challenges and Prospects

  • GMS- SME Business Networking- Challenges and
  • Madhurjya Kumar Dutta
  • Program Manager, Trade Investment
  • Mekong Institute

  • Structure and Issues of SMEs in GMS
  • Challenges
  • Prospects

Structure of SMEs and Issues-
  • Dominance of unregistered informal enterprises
  • SMEs are relatively disadvantaged in
    organization, management, financing, product,
    marketing and technological development.
  • Weak human capital- technical know how.
  • Lack/access to capital
  • Limited capacity to enforce standards, compliance
  • SMEs lack information
  • about laws, regulations (including export
    regulations), business opportunities, marketing,
    financial possibilities, sources of raw material
    and possibilities of collaboration,
  • Lack information about useful technology, product
    standards, marketing, they need skills
    development and enterprise management.
  • Information may be available but the transaction
    cost of acquiring it may be too high for smes.

  • Key factors impeding the performance of SMEs
  • Weak regulatory and legal framework,
  • SME access to finance
  • Lack of SME support facilities.

Challenges ahead
  • As Borderless economy deepens SMEs are
    struggling to compete with imported goods
    manufactured by SMEs in neighboring countries.
  • Up scaling from micro to small to medium and
  • Shift from service to manufacturing
  • Enhancing competitiveness of SMEs
  • Increasing the number of technology based
  • Improving quality of human resource

SMEs- in isolation
  • Studies have shown that SME suffer from
  • from each other
  • from connections to value chain
  • from domestic and foreign markets-
  • from lack of information.

Networking and Clustering as Solutions
  • Why networks and clustering
  • SMEs are unable to capture market opportunities
    which require large production quantities,
    homogenous standards and regular supply.
  • Small size also constitutes a significant
    hindrance to internalization of functions such as
    training, market intelligence, logistics and
    technology innovations- all of which are core to
    firm dynamism.

Kinds of networking to consider
  • Networking among SMEs- which facilitates
  • Networking of SMEs (assuming they are qualified)
    to other parts of value chain of production,
    marketing and sales.
  • It helps to
  • Fill some of the information and knowledge gaps
    that SME have.
  • Networking and clustering also create synergies
    that combine the flexibility of small firms with
    opportunities for economies of scale,
    facilitating cooperation and division of labor
    among SMEs as well as transfer of technology,
    knowledge and information.

Challenges in networking
  • Creating new networks is difficult.
  • Requires trust and building trust, if it does not
    come affiliation or from prior acquaintance or
    association- requires third party intervention.
  • Clustering- collaborative work and information
    exchange , not just physical proximity- also
    requires trust.

How to go about it
  • Cluster networking
  • Virtual Networking and Clustering

Cluster networking
  • Identifying regional clusters where regional
    networking would work.
  • Involving Networking agency/broker to investigate
    possibilities of creating a network or cluster,
    devise a plan to do so, and implement.
  • Such cluster creation should be demand driven-or
    customer driven network to be successful.
  • Such agency/broker means working with buyers or
    potential buyers to determine needs, then
    matching these with potential buyers or clusters.

Virtual Networking and clustering
  • Internetworking- ideal regional networking- use
    of internet to connect SMEs with one another,
    potential business partners, information, advice,
    database, funding sources and other information.
  • An inter active portal- with SME knowledgeable
    staff to maitain and update.
  • Infomediary function- to network with all
    relevant SME institutions, national and
  • Creation of market place e-commerce, network,
    information and skills an entrepreneurial
    business hub.

Portal Models
Stages of e-commerce development
What SME regional portals can do
  • Providing important information to SMEs
  • Serve as center for business to business and
    business to consumer
  • Business to consumer may not be useful to
    majority of
  • SMEs in GMS
  • Large suppliers that use internet based
    enterprise resource
  • planning software for transactions with other
    firms in
  • remote countries, offer their products,
    information on
  • product capabilities, benefits, prices etc

  • http//
  • Enterprise Europe network- provides information
    and practical advice on market opportunities,
    legislation and policies relevant to company or
  • Helps SME to find suitable business partners
    using its business and technology cooperation
    databases, providing information on tender
    opportunities and international networking
  • Develops research and innovation capacities of
    SMEs by helping to create synergies with other
    research actors, technological cooperation
  • Helps SMEs to share research resuklts,
    participate in research programs and apply for

  • http//
  • Provides online trading, buying and selling
    leads, import and export services
  • Offers a complete range of online services for
    trade and logistics community in Singapore. It
    enables cargo booking and tracking, exchange of
    commercial documents etc

  • Thank you