The Challenges Faced By MSMEs

Improving productivity, innovating, and expanding markets are three of the challenges of this business segment in a scenario mmc996 with complications for the country,

Against this background, in a year that poses difficulties of all kinds, the challenges for these companies are diverse. Survive and grow in a market that is increasingly demanding in terms of productivity and competitiveness, bearing high tax burdens, high labor costs, and lack of labor flexibility.

The union directive considers that “the participation of MSMEs is very important” in the challenge that the country has set itself to achieve in 2018 exports of non-mining-energy goods and services for the US $ 30,000 million. Faced with this, SMEs must continue betting on the improvement of management processes and the development of innovation in their products and service.

To do this, it recommends advancing in the generation of added and innovative value and in a contribution from the authorities at all levels.

Hence the need for regional business development policies to promote the training of qualified human capital and innovation. In addition, the country must continue making progress in strengthening the institutional framework for product development and striving for the consolidation of business association processes, mainly those related to the cluster initiatives prioritized by the departments.

In a year in which the growth of the country’s economy is declining, MSMEs appear as a vital token to turn forecasts, but the game must be enabled.

Formalize, the key

To achieve this, according to what he explains, the country’s productive apparatus must diversify and refine our offer of products and services, depending less and less on mining-energy exports and variables such as the exchange rate.

According to the official, the goal of the 2014-2018 four-year period is for nearly 2,000 MSMEs in the national territory to improve their productivity by 15%. This plan will require a “significant” improvement in their capacity for innovation, their human capital, and their insertion in local, regional, and/or global value chains.

Among the actions taken by the Ministry to achieve this objective is the formalization of companies in a context in which “74.6% of micro-businesses do not have any registration before the chamber of commerce,” he explains.

Furthermore, to strengthen this culture and create competencies among suppliers that improve their productivity and make them more competitive, the “Formal Productive Chains” program is developed.

In 2016, this program enabled 40 companies in the textile and clothing sector in Antioquia and Bogotá to increase their productivity by an average of 48%, an increase in the number of customers, and in the number of manufactured products. Additionally, these companies managed to reduce, on average, 31% the delivery time of their orders, 83% started applying IFRS standards in their accounting processes, 65% structured or improved their business model, and 63% started implementing the Occupational Health & Safety. The 40 companies currently employ 1,034 people.

To continue with the modernization of MSMEs, the official explains that this year a plan will be executed that includes actions such as the anti-smuggling fight, increased formalization in production chains, and the reduction and simplification of procedures.