Small and medium enterprises (SMEs) account for a greater share of industries in Bangladesh. These have been playing the lead role in creating entrepreneurship as well as generating jobs.
As large businesses need huge amounts of capital and professional skills in management to sustain, operation of SMEs is much easier but that is not the only reason why small and medium enterprises are dominant in the country's industrial skyline. While export-oriented industries of Bangladesh are mostly in possession of large corporations, the SMEs are need-based industrial units aimed at meeting the local consumer demand. But this identical orientation about large corporations and SMEs of Bangladesh is changing in this globalised world as every business, regardless its size, wants to reach maximum consumers and fetch optimum revenue from the market. This makes large corporations to target the local market segment as well as drive SMEs to be involved in export-import trade.
From this mixed-up scenario where everyone is everywhere to do business in every segment, the question arises how the SMEs could sustain and compete along with the large corporations. The answer lies in competitiveness through innovation and globalisation.
Large corporations' competitiveness relies mostly on cost effectiveness, efficiency and promotion which are thought to be difficult for SMEs to achieve. The small and medium units can make abnormal profit in the start-up time.
The SMEs in Bangladesh are now highly encouraged by various financial supports from both the government and private financial sector. But when competitiveness is related to innovation, the necessity for technical education also figures prominent. Besides this, strong protection for Intellectual Property (IP) rights should be given priority. Need-based innovation is actually a cycle through which a technological advancement can benefit the people. But in least developed countries like Bangladesh, IP rights protection is weaker than that of the developed countries. Innovations here are copied frequently and thus the product life becomes very short because of unfair growth of competition which is very hard to become sustainable. IP and Geographical Identification rights protection are going to be very crucial for competitiveness of SMES against the large corporations in culture-oriented countries like Bangladesh, where SME start-ups are mostly related to traditional, cultural and geographically exclusive products and the services are also influenced by culture and tradition.
Ultimately, it is for the government to take right steps not only for promoting the SMEs in number, but also to support them to help develop the economy.
The writer is a Certified Supply Chain Analyst (CSCATM) from ISCEA, the USA and now pursuing MBA in the Department of International Business, University of Dhaka.
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