Dubai: Small enterprises were instrumental in stimulating growth and pushing the UK economy out of recession, underlining their importance to Foreign Direct Investments, an expert has said.
Oliver Rothschild, chairman of O. Rothschild Corp Advisers, said small enterprises helped by generating employment and having a multiplier impact on others stream of the economy.
“When they realised that they had no money in the pot, they realised that all the money had to be given to encourage innovation and entrepreneurs and within two years we have emerged as the strongest country in terms of GDP in Europe and the reason was young entrepreneurs and small SME start-up companies were able to take the strain out of unemployment and give multiplier effect,” Rothschild said.
Governments should put in place policies that create a conducive climate for SME operations otherwise companies could face obstacles in getting finance, said Ann M. Low, deputy director of investments affairs, US Department of State.
Authorities should maintain easy processes for registration and even paying of taxes for smooth functioning of businesses, Low said, adding specific policies for small and medium enterprises are also good for attracting foreign direct investment.
“If there is a start-up and he wants to register his business and if all of that is too complicated and he chooses not to register his business and that is one of the biggest challenges in the developing world that there is enormous problem of informality. And if these businesses don’t register they can’t get bank accounts, they won’t be able to get loans from banks or government would be deprived of tax revenues,” Low said.
That’s why governments should make all processes online and easy to follow along with proper enforcement of intellectual property, she said.
“If your competitive advantage is intellectual property, be it a patent or trade mark, and if it can be stolen with impunity, you are going to lose in your business so you are going to invest in locations where your rights will be protected,” Low said.
Refugees
“In this region we need to go beyond CSR and we need to focus on shared production values, because what is good for the community is excellent for companies,” said Fouad Mrad, executive director, UN-ESCWA regional technology centre, Jordan.
The region has the highest number of refugees from Syria, Libya, Iraq, and this could be a big potential for business, Mrad said. The region would require housing for refugees, but faces low availability of water for construction.
Therefore researchers should generate a model for constructions that use less water and this could provide solutions to local problems and create business opportunities at the same time, he Mrad said.
