LATIN AMERICA:
Big Debates Over Small
and Medium Enterprises
By Humberto Márquez
CARACAS (IPS) -
Microbusinesses and
small and medium
enterprises in Latin
America remain a valid
path for maintaining and
improving economic
growth and fighting
poverty, while the
spotlight in the region
shines on summits,
conflicts and major
political problems such
as integration or energy
security.
The summit of European
Union and Latin American
and Caribbean (EU-LAC)
heads of state and
government, which opens
in Lima, Peru on
Wednesday, will debate a
proposal for the formal
recognition of the
importance of micro,
small and medium
enterprises (MSMEs).
MSMEs "play a decisive
role in strategies to
combat poverty and
inequality and in favour
of social inclusion,
economic development and
technological advance,"
says a document drafted
by government officials
responsible for MSMEs at
a conference held in
March in preparation for
the Fifth EU-LAC Summit.
The millions of small
businesses in the
countries of this region
"invariably make up more
than 95 percent of the
total number of
businesses, and generate
at least 70 percent of
stable jobs," Gonzalo
Capriles, coordinator of
the Ibero-American
Programme for the
Development of Small and
Medium-sized Enterprises
(IBERPYME), told IPS.
"Public policies to
promote and strengthen
MSMEs should be given a
high degree of priority,
not only within each
country but also in
cooperation programmes
between the European
Union and Latin America
and the Caribbean,"
continues the text that
the regional MSMEs
officials want the EU-LAC
Summit to include in its
final declaration.
To accomplish this, "a
permanent Euro-Latin
American-Caribbean
platform should be
established to exchange
information and best
practices, which should
be institutionalised by
means of an annual
conference of government
officials responsible
for MSMEs," it says.
The public policies that
are sought "are those
that encourage
improvement in
productivity and the
establishment of
production chains and
clusters of similar
businesses located in
the same area, and that
reinforce the potential
for modernisation and
access to markets," said
Capriles.
Chile is a good example
of such policies,
Capriles said, "because
of the cooperation and
synergy between public
and private sectors, the
transparency and
strength of state
institutions, and the
promotion of productive
activities, which
improve
competitiveness."
MSMEs "are more flexible
than big companies; they
adjust more rapidly to
the changing tastes of
consumers, and generate
new jobs," Mariano
Mastrángelo, of the
Argentina-based export
consultancy firm RGX,
told IPS.
"What MSMEs need most is
access to markets,
skills training,
incorporation of
technology and
innovation, and
financing," according to
Capriles.
As for access to export
markets, after studying
270 MSMEs with
six-monthly shipments
worth between 45,000
dollars and one million
dollars in Argentina,
Chile, Costa Rica,
Mexico, Peru and
Uruguay, Mastrángelo
concluded that their
main needs are
consulting, skills
upgrading and
international promotion.
IBERPYME, based at the
Latin American Economic
System (SELA), to which
26 countries in the
region belong, foments
discussion of topics of
interest to MSMEs, the
sharing of experiences,
and the spread of best
practices. It also
maintains a database of
experts in specific
fields that MSMEs need
in order to modernise.
A new study by Juan
Llisterri and Jaime
García-Alba of the
Inter-American
Development Bank, "High
Growth SMEs in Emerging
Latin American
Economies", emphasised
the advantages and
achievements of small
and medium businesses
with good
entrepreneurial and
innovation practices in
Brazil, Chile and
Mexico.
The MSMEs studied were
Biocáncer and TV Esporte
Interactivo in Brazil,
Movix and Akikb in
Chile, and Alltournative
and Interfactura in
Mexico.
Biocáncer offers trials
and development of new
drugs for pharmaceutical
companies. Its services
can speed the market
launch of new products.
TV Esporte Interativo is
a channel broadcasting
top-quality sports
programmes, using the
Internet as a platform
which allows viewer
interaction. Movix
offers telephone ring
tones to mobile phone
users, and Akikb has
developed warehousing
and storage services in
Chile.
Alltournative offers
recreational adventures
in conjunction with
indigenous Maya
communities in the
southeastern Mexican
peninsula of Yucatán,
combining tourism with
sustainable development
and appreciation of
local culture.
Interfactura develops
and applies tax software
for businesses of all
sizes in Mexico.
These businesses were
set up with investments
of less than 100,000
dollars in their first
year, and had sales of
over 800,000 dollars by
the third year. They
exploited niches
alongside large
companies and took
advantage of the
opportunities provided
by technological
innovation.
Capriles said that Latin
American integration
"must not only help
expand markets, but also
production chains, so
that a product
manufactured to a
certain stage in one
country can be finished
in another, constantly
bolstering added value
and job creation. In
order to reduce poverty,
high-quality employment
is needed."
In Mastrángelo’s view,
MSMEs benefit more from
competitive economies
than from those in which
exports are heavily
regulated. Capriles, in
contrast, recommended
avoiding extremes.
"Within a general
project, some controls
can be helpful, but
excessive regulation can
make everything much
more difficult," he
said. (END/2008)
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