Small and Medium Enterprises (SMEs) play a critical role in the economic growth of a country, such as providing work opportunities, income and wealth creation, and poverty reduction. SMEs constitute an integral part of developing nations like Pakistan by promoting inclusive and sustainable economic growth. Small and Medium Enterprises act as key players in the economy and the wider ecosystem of firms. Enabling them to adapt and thrive in a more open environment and participate more actively in digital transformation is essential for boosting economic growth and delivering more inclusive globalisation.
Uplifting SMEs can help countries to achieve Sustainable Development Goals (SDGs) by creating job opportunities, alleviating poverty, promoting innovation and fostering sustainable industrialisation, and reducing income inequalities. Promoting SMEs increases value creation by adopting innovation to different contexts through incremental changes, and by supplying new or niche products which respond to diverse customer needs. They also contribute by serving locations that do not have a large enough scale to attract larger firms.
Similarly in Pakistan, SMEs act as a major part of economic growth by advancing technological innovation, promoting economic renewal, and sourcing to large firms and social progress. In Pakistan, there are around 3.3 million Small and Medium Enterprises that mainly consist of service providers, manufacturing units and startups. These SMEs contribute 30% of Pakistan’s GDP and approximately 25% of generating exports.
However, these enterprises face several restraints due to the country’s fluctuating economy. In order to develop a sustainable SME sector, it is imperative to support the development of these enterprises in a well-coordinated manner. These enterprises can be developed in urban as well as rural areas for any form of business operation. The establishment and development of such kinds of enterprises are generating income, employment, and alleviation of poverty. Subsequently, employment generation by such SMEs promotes economic development in remote areas. The SME sector can be improved by embracing standard protocols and procedures as parameters of their operations which will encourage these enterprises to explore new and improved business structures that can better aid in productivity.
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