Sunday, May 27, 2012

SMEs - the survivalist entrepreneur

SMEs - the survivalist entrepreneur. Do they really make a difference? If we assume we have 3 basic groupings of SME, the survivalist, lifestyle and high growth entrepreneur, we need to understand where the value is added to an economy. This blog will consider the survivalist. Many people perceive the survivalist to be the uneducated BOP person who is doomed to poverty. The kind of people who were targeted by Grameen bank and their subsequent followers. However, the person who has been fired or re-trenched and who is unemployed in contracting markets is every much a survivalist too. The difference is that they may be well educated and highly experienced. However, in both cases they want employment, albeit at different levels. Therefore government interventions for these two survivalist sub-groups need to be handled and processed in a different manner. Neither really wants to own a business. Neither of these are likely to directly and significantly contribute to employment and/or GDP growth, but will indirectly benefit from employment and GDP growth as and when they find employment. Therefore government needs growth from alternative sources in order to reduce the number of survivalists. The fewer survivalists, the better the economic health.

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