The Increasing Global Integration Of The World Economy Economics Essay

One of the most seeable indicants of the increasing planetary integrating of the universe economic system has been the growing of Small and Medium Enterprises. Before the industrial revolution, all concerns were little. However, with globalization in many developed economic systems, little has become medium and medium has now become large concerns. Yet, the importance of the SMEs can non be overlooked. SMEs are the lifeblood of many economic systems around the universe. They represent the icons of concern in industrialized states like United Kingdom and United States. In Europe, for illustration, Micro, little and moderate-sized endeavors contribute significantly to the societal and economic development of the economic system since they comprise 99 % of an estimated 19.3 million endeavors in the EU.

It is by and large noted in particularly in the Western mainstream economic imperativeness coverage that entrepreneurship and largely SMEs are cardinal determiners for growing, invention and development in all economic systems. Harmonizing to a survey made by Nystrom ( 2008 ) , there is a direct relationship between entrepreneurship and aggregative economic growing. This survey further emphasizes that in order for entrepreneurship to harvest more benefits appropriate policy model and authorities support is indispensable. Birch ( 1979 ) conducted a survey on the part of little houses for employment and it was found that little houses contribute a king of beasts portion of the new occupations in the US. ( http: //mowgli.org.uk/4789/what-is-entrepreneurship-and-why-is-it-important-to-our-economies.html )

The Mauritanian economic system has achieved singular growing boulder clay now. However, this recognition can non be given merely to big endeavors as the little endeavors besides have a major part in the success of the Mauritanian economic system. There is a long tradition of entrepreneurship in Mauritius including particularly SMEs. SMEs in Mauritius can follow its roots back since the 1960aa‚¬a„?s when Mauritius was at the brink of its industrialization procedure. The definition of SME in the SMEDA Act comprises all endeavors in all economic sectors where turnover is used as the chief footing of measuring. Since the demands and purposes of moderate-sized endeavors are different from that of small-sized endeavors, they are defined individually. Harmonizing to the Small & A ; Medium Enterprise Development Authority ( SMEDA ) Act, a little endeavor refers to an endeavor where the one-year turnover is less than Rs 10 million. On the other manus, a medium endeavor is defined as an endeavor where the one-year turnover exceeds Rs 10 million but is less than Rs 50 million.

SMEs have achieved singular growing since the past two decennaries, it is of cardinal importance in the Mauritanian economic system and it has a major part to the national economic system in footings of end product, employment and effectual use of regional resources. From the last nose count conducted by the Central Statistical office in 2007, it was found that there were about 92,000 SMEs supplying occupations to some 209,000 people and lending for 20.8 % of GDP. In the recent Budget ( 2012 ) , reference has been made that there were about 22000 SMEs in Mauritius in 2011. They generated occupations to some 250000 work forces and adult females and history for 37 % of GDP stand foring some Rs 120 billion worth of end product. The portion of SMEs in entire employment was 54 % in 2011. The SME sector contributes between 15 % and 50 % of exports and between 20 % and 80 % of SME are active exporters. Overall it is estimated that SME contribute between 25 % and 35 % of universe manufactured exports. From January to September 2011, the value of exports increased by 11.7 % with exports to the UK, France and the USA entering an addition of 6.3 % , 9.3 % and 9.1 % severally. Exports to the regional market, peculiarly South Africa and Madagascar, recorded additions of 58.6 % and 28.8 % severally.

The SMIDO is the chief administration responsible for the development of SMEs. The chief aim of the SMIDO is to better the fight of SMEs by supplying a scope of support services to do the sector contribute more to the export of the economic system.

Wignaraja and Oaa‚¬a„?neil ( 1999 ) argued that although Mauritius is a little state, its SME sector benefits a batch through the support services of authorities and other establishments.

CHALLENGES FACED BY SMEs

SMEs in Mauritius are confronted with tonss of challenges stemming from both local and international markets. Entrepreneurs find that authorities policies and ordinances represent the major hurdlings that hinder their development. They consider bureaucratism, societal security parts, company revenue enhancements, personal income revenue enhancements, financial policy and labour jurisprudence to hold negative impact on their growing. Furthermore, it is hard for little concerns to hold to the international markets. Fluctuations in the exchange rate, placing new and emerging markets, difference in proficient criterion and bureaucratism are among the chief barriers to that SMEs faced to be engaged in international trade. In add-on, troubles in the enlisting of qualified staff and skilled workers mayalso act as hindrance to the successful growing of this sector. On the international forepart, globalization and trade liberalization has put farther restraints on little houses. The dismantling of the Multi Fibre Agreement due to new regulations of beginning of the EU has placed farther force per unit area as SMEs now have to vie on a flat playing field with the low cost bring forthing states.

Government steps

SMEs play a polar function in the Mauritanian economic system as it contributes significantly to the GDP growing and socio-economic development of the state. Furthermore, the SME sector has been left unharmed of the economic crisis and it has now become an of import tool to work out the socio-economic disparity. Hence, the Mauritanian authorities is doing much attempt to supply a safe and favorable concern environment to SMEs in order to further their growing. New schemes are implemented to make a competitory and strong technological SME base. Furthermore, authorities besides aims to hike up the bing entrepreneurship and follow steps to increase growing of new endeavors and supply bing SMEs with the necessary installations so as to increase productiveness, efficiency and profitableness.

The governemnt is engaged in the development of a civilization of invention for SMEs in Mauritius. Generally, invention promotes a virtuous development circle that encourages people to bring forth goods and services that meets the awaited demands of the population and promotes industry fight while at the same clip harvesting sufficient income and grosss that can be invested in the societal and economic development of the state. The SMEDA is engaged in supplying SMEs with the up-to-date engineerings to heighten their development. For case, employees in SMEs are provided with digital civilization of preparation. Furthermore, the usage of up-to- day of the month preparation apparatuss affecting the usage of ICT are being implemented in SMEs.

Several steps have been implemented to assist SMEs in their development such as the proviso of a broad assortment of channels for funding, supplying support to heighten enterprisers, new industrial estates are being constructed, and support are provided to develop the market for SMEs.. Though, much inducements have been given to hike up this sector, success have non been attained yet.

To make an enabling concern environment, the MBGS supply support to endeavors to heighten their growing, in fold their fight. They do so by supplying aid in assorted Fieldss such as logistics, selling, research and developement, proficient aid and any othr aid that will profit the house from come oning.

The handiness of grants enable enterprisers to carry on research and development in different Fieldss and put new engineerings to add value to their merchandises there is besides the the Support to Get down up Scheme ( STS ) which helps enterprisers who are get downing a concern for the first clip by supplying them with a grant of Rs 50,000 to get down their concern and besides support. There is besides the Support to High Potential Entrepreneurs ( SHPE ) whereby bing enterprisers who want to put up a new concern in order to make more occupations, contribute to economic development and who want to prosecute in corporate societal duty are rewarded. In add-on, there are besides marketing programmes which are organised to help exporters. Recently, a engineering carnival was organised in Mauritius to promote SMEs to hold entree to the latest engineerings so as to set about new undertakings. In this context, sveral foreign companies worldwide were invited to take part in this just to expose their merchandises. All these are being done to advance a more contributing concern environment in the Mauritanian economic system.

Furthermore, the Industrial and Vocational Training Board give houses the possibility to supply preparation classs for their employees. Furthermore, industries which are under the auspices of establishments like SMIDO benefit from revenue enhancement inducements such as low corporate revenue enhancement and stuffs Additionally, a aa‚¬E?Go Green systemaa‚¬E? has been adopted chiefly toencourage enterprisers to travel green by doing usage of natural dyeing agent to lend to a healthy environment.

As we have seen, the growing of the little graduated table sector has facilitated the economic development procedure of Mauritius a batch. Government has adopted a figure of policy models and provided inducements to supply a favorable concern environment for the sustainable development of the sector and to react to the altering demands of endeavors consequently. However, though several steps have been implemented, full potency has non been unleashed. There are some enterprisers who do neglect in concerns. Recently, the Subana Enterprise ( biscuits maker ) has closed down seting at interest the occupations of many people.