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Innovation a key factor in VSE/SME growth in MENA region




Innovation a key factor in VSE/SME growth in MENA region

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The embracing of new technologies and new processes leads to the development of high added-value products (photo : F.Dubessy)
The embracing of new technologies and new processes leads to the development of high added-value products (photo : F.Dubessy)
In two complementary studies carried out in December, 2017(1) and March, 2018(2), researchers at the Euro-Mediterranean Network for Economic Studies (EMNES) put forward ideas for boosting employment in very small and small-to medium enterprises in four countries: Egypt, Morocco, Jordan and Tunisia.

The published reports show that innovating companies are best adapted to survive in the long term and prosper. As the authors point out, "The embracing of new technologies and new processes leads to the development of high added-value products, opening up new market opportunities."

Provided efficient and well-managed innovation structures are available, however. This requires, as a priority, the implementation of a proper strategy in the MENA region based on synergies between the different stakeholders (businesses, governments, research centres, agencies...). "Governments must play a more active part in facilitating innovation funding, especially for VSEs and SMEs," says EMNES.

Raising the issue of the cost of innovation, the studies note the need for additional incentives to allow "efforts to be oriented towards more applied research and development projects," but also to offer "specific training programmes for managers of VSEs to help them draw up strategic plans and encourage them to seek out new markets and expand their professional networks."

Increasing the number of stakeholders and policies

The EMNES highlights the importance of commitment on the part of professional bodies and governmental and non-governmental structures to helping these businesses.

But, given the lack of any comprehensive national strategy in the MENA region to provide support to VSEs and SMEs, it is concerned that the solution being offered consists of increasing the number of stakeholders and policies, with no coordination or systematic assessment.

The two reports also underscore the other obstacles to job creation within these companies, for example the lack of collaboration between SMEs and VSEs, though vital in ensuring their development. Likewise, political instability which, according to the business owners interviewed (cited by 50% in Tunisia and 48% in Egypt), constitutes a major barrier to the development of microenterprises. They also have to battle against corruption (top of the list in Morocco), the levels of taxation (top in Jordan), problems with access to credit facilities and the omnipresent informal sector (45%-65% of private-sector jobs depending on the country).

 
  1. « Growth of Micro, Small and Medium enterprises (MSMEs) in MENA countries : constraints and success factors»  by Rim Ben Ayed Mouelhi and Monia Ghazali.
 
2) « Micro, Small and Medium sized enterprises development in Egypt, Jordan, Morocco & Tunisia. Structure, obstacles and policies » coordinators Rym Ayadi and Emanuele Sessa. Contributors Hala Helmu El Said and Rana Hosni Ahmed (Egypt), Nooh Alshyab, Serena Sandri and Fuad Al Sheikh (Jordan), Mohamed Larbi Sidmou and Jad Allah Rami (Morocco), Rim Ben Ayed Mouelhi and Monia Ghazali Ferchichi (Tunisia).

Frédéric Dubessy


Tuesday, April 3rd 2018



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