Transcript Role of Business Schools in Developing Enterprises and SMEs Dynamics and Prospects Mohammad Sajjad Moghal Team Leader Private Sector Development - USAID [email protected].

Role of Business
Schools in
Developing
Enterprises and SMEs
Dynamics and Prospects
Mohammad Sajjad Moghal
Team Leader Private Sector Development - USAID
[email protected]
A Brief Profile of SME Sector
 Number of Enterprises: 3.2 million (99% employ > 10)
 Value Addition in Manufacturing: 35%
 Contribution to GDP: 30%
 Share in manufactured exports: 25%
 Contribute 35% in Manufacturing Value addition
 Contribution in industrial employment – 78%
 84% of enterprises have sales below Rs. 0.5
million & 93% have sales below Rs. 1 million
Source: *Economic Census Pakistan 2005 & Labour Force Survey 2003-4
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Business Sector by Size, Sales & Emp
Median Sales
Emp 1-5
2
144,000
3,063.05
1,071
5.72
Emp 6-10
7
384,000
102.01
161
0.74
Emp 11-20
13
696,000
32.89
98
0.46
Emp 21-50
27
1,580,000
14.19
120
0.42
Emp 51-100
66
6,000,000
3.09
45
0.21
Emp 101-250
135
24,000,000
1.31
61
0.19
Emp 250+
501
356,700,000
0.70
407
0.58
Employment
Categories
Number
of Firms
'000
Total
Sales
Rs.
Billion
Median
Employm
ent Size
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Total
Employmen
t in Million
Top Ten Business Sectors
Median
Emp.
Size
Median
Sales
Rs. ‘000
Retail Trade
2
216
1,439
697.300
2.371 28.47%
Services
2
72
312
43.920
1.360 16.33%
Manf. of Textiles Apparel
Leather products
2
63
265
241.357
0.864 10.37%
Personal & Household
Services
2
72
464
51.576
0.820
9.85%
Government Excl Defense
6
108
21
5.074
0.456
5.48%
Manufacturing of Food
Beverages & Tobacco
2
98
131
122.056
0.436
5.24%
Restaurants & Hotels
2
180
146
43.152
0.345
4.14%
Manf. Fabricated Metal Prod.
3
180
61
93.687
0.213
2.56%
Wholesale Trade
2
480
90
274.604
0.212
2.55%
Manf. Wood/Wood Prod.
Incl. Furniture
2
122
66
20.224
0.169
2.02%
Economic Sectors
# of
Firms
‘000
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http://www.smeda.org.pk
Total
Sales Rs.
Billion
Total
Emp. in
Million
%
Cont.
Emp.
Enterprises by Emp. Size and share in Total
Employment
7%
Emp 250+
Emp 101-250
Emp 51-100
Emp 21-50
Emp 11-20
Emp 6-10
2%
3%
5%
6%
9%
69%
Emp 1-5
0%
10%
20%
30%
40%
Source: Economic Census of Pakistan 2005
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50%
60%
70%
Industrial Units by Employment Size
250 & above
101 to 250
2%
3%
11%
50 to 100
57%
10 to 49
28%
1 to 9
0%
10%
20%
30%
40%
50%
Source: Gallup Survey of 1000 Industries in 2002 covering 12 cities & 8 sectors
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60%
Labor Productivity Due to Skill Difference
0.06
0.06
Bangladesh = 0
0.05
0.04
0.04
0.03
0.02
0.01
0.003
0
Pakistan
Source: World Bank, Investment Climate Survey 2001-02
India
China
7
Low Export Orientation
Source: World Bank, Investment Climate Survey 2001-02
Growth Small vis-à-vis Large Scale
Large-Scale
Output
Growth
Rate %
Capital
Formation
Growth %
SME Sector
Output
Growth
Rate %
Capital
Formation
Growth %
1970s
4.84
-2.28
4.4
5.5
1980s
8.16
8.15
4.7
10.5
1990s
3.6
-5.02
2.6
7.2
Source: Dr. Ehsan ul Haq, Dr. Faisal Bari- LUMS; Barriers in SME Growth - 2002
9
It is Difficult to Grow for an SME
Growth in
Employment
Micro
Small
Medium
Large
Negative Growth
11%
12%
16%
18%
No Growth
46%
50%
48%
30%
Growth
39%
36%
35%
51%
Source: SMEDA World Bank Investment Climate Survey 2001
10
Dearth of Business Leadership
 Overly focused on corporate and
industrial sector
 Business schools have abdicated
their role in:
 supplying leadership for small
businesses
 Business Services sector
 Future opportunities are in the Retail,
Wholesale, services and Agriculture
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The Role of Business Schools
Business Service
Agencies
Need
analysis
Org. Spin
Offs/
Solutions
Policy Interventions
Reshaping the Business Environment
Business
Schools
SMEs
Need Assessment/
Feedback: CCIs, TAs
Business
Services
Project
Ownership
Research/ Analysis – Markets, Industry, Technology and
Regulations
Strategy Formulation – HR Dev. Packages/ Business
Managers
Industry-Academia Coordination and
Sustainable Commercial Linkages
Sector
Specialists
Thank you very much