Small and medium enterprises and development strategies: a lesson from ASEAN

Abstract

Small and medium enterprises (SMEs) make up more than 80% of all businesses in Sri Lanka, and account for about 35% of employment and about 20% of total industrial value addition.This important sector has a crucial role to play in driving sustainable development and supporting the stability of the post conflict economy. SMEs are the backbone of the economies of the ASEAN member states and invariably account for more than 96% of all enterprises and 50% to 85% of domestic employment. The contribution of SMEs to GDP is between 30% and 53% and the contribution of SMEs to exports is between 19% and 31%. Their contribution to value added, employment and export are quite significant in ASEAN. In short, SMEs contribute to generating more employment, promoting more balanced growth of different regions in country, and exhibiting more innovation and dynamics. The study evaluates the contribution of regional institutional bodies such as SAARC and BIMSTEC to lift up this important sector as mean of economic growth strategy. Stimulating the growth of SMEs and mobilizing their unique strengths needs to be a key element of Sri Lanka?s development strategy. The study also seeks to identify crucial elements in Thailand?s SMEs Promotion Plan (2007-2011) and the ASEAN Policy Blueprint for the ASEAN SME Development Decade 2002-2012 and develop its own comprehensive, yet forward-looking agenda for SME development in Sri Lanka.