Small and Medium Enterprises (SMEs): Instruments of Economic
SC3 – Small Medium Enterprises (SMEs)
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Transcript of SC3 – Small Medium Enterprises (SMEs)
SC3 – Small Medium Enterprises (SMEs)
Lim Sei Kee @ cK
@ Definition
@ Examples
@ Importance
SME stands for Small to Medium Enterprise.
Different countries define SMEs differently.
SMALL-and medium-sized enterprises (SMEs) play an increasingly important role in the global economy, with a growing proportion now doing business internationally.
SMEs
Distribution of Enterprise by Size, 2010. Small 65% Medium 33% Big 2%
Number of Enterprise by District, 2010. Brunei Muara 4,127 Belait 885 Tutong 390 Temburong 84
SMEs in Brunei[Source: Economic Census 2011]
Agriculture, Forestry, and FisheryMining and QuarryingManufacturingElectricity, Gas, Water Supply and Other Industrial
ActivitiesConstructionWhole and Retail TradeAccommodation and Food Service Activities
Distribution of Enterprise
Transportation and StorageInformation and CommunicationFinancial and Insurance ActivitiesReal Estate ActivitiesProfessional, Technical, Administrative and
Support ServicesEducationHuman Health and Social Work Activities
Distribution of Enterprise
Recognizing the significant role of SMEs, the primary role of the Brunei Government is to create a good business environment to strengthen the competitiveness of SMEs by providing:
Administrative Support Investment and Trading Opportunities Technical Assistance Financial Assistance Incentives
The Resource Centre (MIPR) coordinates the programmes and activities of the government agencies and private sectors that are responsible for SMEs.
The one-stop agency under the Brunei Industrial Development Authority (BINA) provides administrative support in the implementation of the industrial development programme and trade requirement.
www.bina.gov.bn
Administrative Support
An investment / trading arm of the Government has been created with the objective of accelerating strategic industrial development in Brunei Darussalam through foreign direct investment.
Brunei Economic Development Board
www.bedb.com.bn
Investment and Trading Opportunities
Assistance given are in the form of training services, incubation programmes, technical and business advisory services and infrastructure assistance.
Icentre
www.icentre.biz
Technical Assistance
Industrial Development Fund is given to SMEs to support their financial needs through the Enterprise Facilitation Scheme, Microcredit Facilitation Scheme, Export Re-Financing Scheme.
LEAP [Local Enterprise Applications and Products]
www.bedb.com.bn/leap
Financial Assistance
To promote the development and expansion of SME activities, tax and investment incentives, including tax exemption for imported raw materials and machinery
Corporate tax relief of up to 5 years for companies that invest B$500,000 to B$2.5 million in approved ventures
An 11-year tax break if the venture is located in a high-tech industrial park (SPARK)
Incentives
1. How many businesses are there in information and communication sector?
2. How many large businesses are there in real estate activities?
3. How many small businesses are there in manufacturing sector?
4. In which sector(s) is there many more medium enterprises compared with small enterprises?
5. How many businesses are there in Brunei as of 2010?
Based on Chart 2.4, answer the following questions.
1. How many workers are there in small enterprises?
2. How many workers in medium enterprise are working in financial and insurance activities?
3. In total, how many workers are there in accommodation and food service activities?
4. Which sector account for the most workers? 5. Which sector account for the least workers?
Based on Chart 2.5, answer the following questions.
SMEs have a very high potential in contributing to the diversification of the economy.
SMEs are crucial to the economic growth process and play an important role in the country's overall production network.
SMEs have the potential to contribute substantially to the economy and can provide a strong foundation for the growth of new industries as well as strengthening existing ones.
Importance of SMEs
Highly innovative entrepreneurs
Well versed with up-to-date technologies
Able to take the advantage in strengthening their competitiveness
Successful SMEs - characteristics
Business viability as well as a lack of medium/long-term commitment.
A lack of technical knowledge, market knowledge, financial means to conduct research and innovation, human resources and finances to fund their growth.
Lack of financial resources to meet with the opportunities of the wider market
SME - Problems
Often the hardest part of starting a business is raising the money to get going.
The entrepreneur might have a great idea and clear idea of how to turn it into a successful business.
However, if sufficient finance cannot be raised, it is unlikely that the business will get off the ground.
SME - Financing
Set-up costs (the costs that are incurred before the business starts to trade)
Starting investment in capacity (the fixed assets that the business needs before it can begin to trade)
Working capital (the stocks needed by the business –e.g. r raw materials + allowance for amounts that will be owed by customers once sales begin)
Growth and development (e.g. extra investment in capacity
The finance needs of a start-up should take account of these key areas:
Where can SMEs get their financing from?
Discussion Qs
1. Define SME. 2. Examples of SME in Brunei. 3. Importance of SME. 4. Problems of SME. 5. Where can SMEs get their financing from?
GROUP PRESENTATION@ MAY 21st, MAY 28th, JUNE 4th
Work in a group of MAXIMUM 4 students. Presentation title: “Small Medium Enterprises” Presentation date: MAY 21st, MAY 28th, JUNE 4th
** MAX 2 GROUPS PER SESSION **Submit your presentation slides and report (softcopy)
before/on 11th JUNE 2014
Points to remember: Show up early, Proper Introduction, Clear and Concise Points,
Enhance your graphics, Conclude the presentation.
Time: 15 – 20 minutes.
Group Assignment
Read up any one of them and present to the class:
SPARK (Sungai Liang Industrial Park) BEDB (Brunei Economic Development Board) iCentre YEAB (Young Entrepreneurs Association Brunei) LiveWire Brunei
For next week,