In India there is a craze for big things – big cars, big buildings, big budget movies….we get carried away by these terms. Job seekers are more enthusiastic to join only big companies and they don’t mind taking up small roles in big companies, rather than having a prominent role in SMEs. Even people want to set up big businesses. And more over, our bureaucrats are also defining polices that are favourable for big businesses.
In such situation, where everything is revolving round the big businesses, there is less scope and growth left for SMEs. They are the neglected sector. Imagine, if SMEs in India are also encouraged and supported like that in US, then definitely it would increase job growth and GDP.
Let’s take a look at some facts about small businesses in the US:
In the United States – Small businesses are the key drivers of employment
In the US, small businesses play a critical role to the nation’s economy, with nearly 30 million businesses are employing nearly half of the workforce.
In 2008 recession, small businesses created nearly 70% of all new private sector jobs.- Nearly 50% of private sector payroll is created by small businesses.
- 43% of high-tech employment is created by small businesses.
- Small businesses create every two out of three new jobs.
- Over 6,00,000 franchised small businesses account for 40% of all retail sales.
By looking at these statistics, it is very clear that small businesses in the US play a key role in job creation and economic growth. Just imagine, when small businesses in the US are creating that huge impact, then it is not impossible for our SMEs doing the same.
India is the world’s second most populated country with 120 crore population, half of which are under the age group of 25. It is not possible for big businesses to provide jobs to such big chunk of working age group, it is only the small businesses that can do, just like how small businesses in the US are doing.
Small businesses in the US are key drivers of GDP
In US, small businesses account 45% of non-agricultural GDP and 54% of sales. About 98% of US SMB exporters account 13.8% of nation’s GDP. In 2008, manufactured exports created 6.8 million jobs.
Small businesses are the innovators in US
Small business owners are natural innovators, they have created over 13 times more patents per employee than a large patenting businesses in the US.
It’s hard for big businesses to survive without small businesses
Big businesses are dependent on many small and medium entities right from the supply of goods to outsourcing the business operations such as accounting, recruiting and staffing, billing, advertising, marketing and many more. Big business need the support from small business to run their business. If small businesses did not exist, then it would not only be difficult, but impossible for big businesses to manage multiple tasks on their own.
Small businesses are customer oriented
As big businesses target big markets with broad product range, it becomes difficult for them to satisfy their customers well. But when it comes to small businesses, it is not difficult for them because they offer one or a few products or services that makes it easy for them to offer better service to its customers.
Americans have a positive impression on small businesses. According to a poll conducted by Gallup organization, 95% of Americans have positive view on small businesses.
Finally, some important points on small businesses:
- They hire
- They take risks and inspire people. Example: We have seen their role at the time of recession in 2008.
- They are forerunners of the change.
- They are competent and have a passion to compete with the big businesses.
- They rejuvenate their local economies.
Facts to think and support SMEs:
If we want our country’s economy to grow, it is only possible if we, our government and bureaucrats support small and medium entities. If SMEs get the support that they need, then for sure they will contribute to our nation’s economy just like how the small businesses in US are contributing to their nation’s economy and job creation.
Reproduced with permission from Marvist.co.in.