Boosting SME productivity
Estimates indicate that halving the global productivity gap between SMEs and large companies would add about $15 trillion in value, or roughly 7 percent of global GDP.
Despite their prevalence in most national economies – between 50 and 90 percent of the global workforce is employed by one – small- to mid-sized enterprises continue to languish in productivity worldwide. This gap is all the more remarkable when compared with the productivity of larger companies.
What is causing the hold up? Experts point to two factors hampering SME growth – finance and poor management. Securing long-term financing for small businesses remain a challenge in many countries. Research also suggests that poor management practices could account for more than half of the productivity gap between small businesses in the UK and their counterparts in other nations such as the US.
Nonetheless, barriers to increasing productivity remain, as SMEs continue to have their hands tied by issues such as a lack of skills, necessary information to make decisions, and time and capacity for managers to make necessary changes.
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