Wednesday, November 15, 2006 Small, medium firms as instruments v. poverty
A NATIONWIDE movement that mobilizes the top 2,000 corporations in helping small and medium enterprises (SMEs) become world class is the country's best strategy in its fight against hunger and poverty.
This was the key message delivered by Philippine Exporters Confederation (Philexport) president Sergio R. Ortiz-Luis Jr. during the recognition rites for the first 22 SME participants and their big-brother partners in Cebu City under the Employers Confederation of the Philippines (Ecop) Big Enterprise-Small Enterprise (Ebese) productivity improvement program held last November 8.
Called by Ecop chairman Miguel Varela as the ABC of building tiny enterprises into world-class businesses, the Ebese has been identified as one of the few successful programs in the country that have succeeded in helping SMEs upgrade their production, management, financial and management systems to international standards.
He explained that the program has gone beyond the basics of going world-class but has helped small enterprises adopt through hands-on, on site application of best practices in human resource management, production, just in time deliveries, financial management and marketing
Ortiz-Luiz called the Ebese program the beginnings of a silent revolution in SME management and must be adopted by the big companies in empowering the small enterprises that failed to adjust to the demands of a fierce market.
The Ecop program, he conceded, has so far, helped a limited number of enterprises. But if adopted by all industry associations and business chambers across the islands, backed by an army of specialists, it can create a critical mass of empowered SMEs that can make a big dent in solving joblessness, poverty and hunger.
He observed that after 12 years of trade and investment liberalization, the Philippines has barely reached the passing mark with a modest growth rate of a few points above five percent a year while most of its neighbors jumped at more rapid rates, with a few that grew at double digit-paces over many years.
The export leader traced the slow growth of the Philippine economy to the low productivity of the MSME (micro, small and medium enterprises) segment of the economy.
On the whole, big companies, with their financial muscle, rapidly adjusted to the challenges posed by the new order that brought in new players. Sadly for the country, only 0.4 percent of all registered domestic enterprises belong to the league of Philippine Long Distance Telephone (PLDT), the Ayala Group, and San Miguel Corporation or just 2,958 out of 811,592 business establishments on record, the export leader observed.
The rest, representing 99.6 percent are MSMEs left behind and end up the laggards in the scramble for new opportunities for growth. The biggest cumulative employers have workers of about 3.5 million but their share in the total value of goods and services produced each year is only 35 percent. ( Philexport News and Features/Sunnex)
