4th Issue

Regional Conference for SMEs “Chambers & Business Associations: Drivers for Change”

Middle East Business act as Media Partner for Jordan Chamber of Industry’s Regional Conference for SMEs
“Chambers & Business Associations: Drivers for Change”
27 & 28 April 2014
Doing business in the Middle East: Jordan Chamber of Industry (JCI) recently organised the Regional Conference for SMEs, a dynamic event held in Amman under the patronage of His Excellency Prime Minister Dr. Abdullah Al-Nsour.
The Conference was held in cooperation with numerous local and international partners that included: Confederation of Danish Industries – DI, Arab Planning Institute, ESCWA, UNIDO, JEDCO, Jordan Trade Facilities Co., Primus and Jordan TV and Middle East Business News and Magazine.
The conference attracted 350 participants from more than 17 countries that included Egypt, Tunisia, Palestine, Algeria, Morocco, Libya, Kingdom of Bahrain, Iraq, Qatar, UAE, Sultanate of Oman, Yemen, Kuwait, UK, Denmark, Luxemburg and Italy. In organising this conference JCI aimed to start a dialogue about the important role chambers and business associations play to support the prosperity of SMEs as the engines for economic growth in the MENA region.
Chambers and Business Associations play a vital role in fostering an “enabling environment” for SMEs to facilitate their contribution in both economic and social aspects in all countries through their ability to create new jobs. They also contribute to sustainable development. The conference also emphasised on the role they should play based on the wide representation base of business communities.
The conference also served as an attempt by JCI to play a vital role in the business environment through a two-day, in-depth discussion that tackled various challenges and core issues facing the progress of SME growth and sustainability in Jordan and the region.
The conference pillars included:
First: SMEs in the MENA region and CBAs role in empowering them – Setting the scene
Discussion pillars:

  •  Comprehensive vision about SMEs’ current status – in terms of common challenges, opportunities and elements of the required enabling environment needed to help support SME’s facing challenges and seizing their full potential
  •  Required CBAs capabilities to contribute to creating a more favourable and stimulating business environment for SMEs, through advocating for positive policies and providing needed support to assist SMEs
  •  Showcase global best practices and success stories in this context where actual CBAs have impacted the well being of SMEs

Second: SME Financing – Addressing the main challenge and the role of CBAs in bridging the gap
Discussion focussed on the financial challenges facing SMEs, as financial issues are considered to be the main challenge for growth and expansion. Meanwhile, issues on the financial aspects differ depending on the angle looked at, whether that is from the financial institution (banking and non-banking) perspective or SME point-of-view.
Discussion pillars:

  •  Financial challenges from the SME point-of-view
  •  Major issues affecting the financial challenges facing SMEs including absence of entrepreneurial mindset, provision of BDS and suitability for SMEs, enabling environment, availability of financial services, and readiness of enterprises
  • CBAs’ possible role in addressing challenges of SME financing for both parties

Third: Government role in supporting SMEs – Efficient mechanisms
Several support programs are offered to SMEs by governments, and regional and international initiatives and programs in the MENA region, as SMEs are regarded as being the main contributor to development through their role in addressing poverty and unemployment. However, there are many challenges faced by all parties (SMEs, regional and international programs as well as governments) in terms of the mechanisms of enforcement of support programs.
Discussion pillars:

  • Challenges that governments face in proposing and executing financial support programs and initiatives for SMEs
  • Challenges facing SMEs in benefiting from the government financial support programs
  • The role that CBAs may take in this context, functioning as the link between Governments and SMEs to facilitate the process, showcasing the Malaysian experiences as a benchmark

Fourth: Non-Financial services – SME empowerment
SMEs encounter several non-financial challenges related to their technical, marketing and managerial capabilities. Accordingly, SMEs need to be empowered by a specialised set of non-financial services to unlock their potential in development and, in particular, to be better able to achieve growth and sustainability.
Discussion pillars:

  • Demonstrating SMEs’ perspective on the non-financial challenges ahead of SMEs and their ability to attain the required technical, training and consultation services from different resources
  •  Assessing the various non-financial support programs directed to SMEs by government and non-government organisations and exploring obstacles in executing mechanisms of such programs including the programs’ quality and efficiency as well as SMEs’ awareness of their importance and methods to benefit from them
  •  The role that CBAs may take in this context, functioning as the link between SMEs and the providers of non-financial services

Fifth: Innovation – the path for the future
Addressing SMEs’ challenges require innovative solutions by SMEs themselves as well as CBAs. Innovation and entrepreneurship should be utilised to enhance the position of SMEs in front of service providers (financial and non-financial) as well as government agencies and programs.
Discussion pillars:

  •  The importance of innovation for SMEs and how it can enhance their productivity and the quality of their products / services and – accordingly – positively impact SME development and growth. Moreover SMEs have a responsibility in understanding the impact of innovation on their work and the importance of investment in this arena
  •  CBAs need to consider how they may spark SMEs innovation and facilitate the required change of mentality as well as product / service development processes, through strongly supporting entrepreneurship, innovation, and research and development activities. Likewise, CBAs themselves must change their approach in addressing SMEs issues and work to come up with a set of innovative solutions and services for SMEs

It is worth mentioning that session moderators were carefully selected from a list of highly qualified practitioners at the regional level, highly experienced in SME development. By the end of the two-day event, the conference concluded with the following recommendations and outcomes:

  1. Stimulate and encourage an entrepreneurial business environment through the creation of laws and regulatory frameworks supporting the entrepreneurial process, in addition to encouraging and nurturing the entrepreneurial spirit and the trend towards self-employment
  2. Offer high value-added services that meet the needs of entrepreneurs, with a minimal contribution for the cost of the service to be paid by the beneficiary to ensure serious commitment
  3. Foster the recognition by financial institutions of the importance of SMEs as an emerging target segment to which they can offer financial services that respond to business owners’ needs, and apply clear and practical mechanisms to deliver those services. This will contribute to bridging the gap between SMEs and financial institutions
  4. Chambers and business associations should play a vital role in the process of offering a database of information about target segments in order to facilitate links between SMEs and financial and technical service providers
  5. Emphasise the importance of involvement of chambers and business associations in all efforts related to the creation and development of policies, to ensure that the perspective of the industrial sector, especially SMEs, is communicated to policy makers
  6. Provide a vision to establish and improve a comprehensive business environment and culture in the private sector, with extra focus on SMEs as the engines of growth, in compliance with all related factors such as the financial and economic needs, tax regulations and available infrastructure
  7. Establish constant communication channels with the government institutions to ensure recognition of the current situation and needs of SMEs. Motivate them to take the needed measures to improve the level of services offered to SMEs and the industrial sector as a whole. In addition, foster policies and programs of networking and links at main and sub-sectors levels
  8. Offer various financial resources at the national and regional level, and direct those programs to SMEs in particular with an integrated approach
  9. Develop a communication strategy for SMEs through chambers of industry and trade in a way that can increase the awareness for services and programs available for those businesses
  10. The importance of having chambers of industry and trade adapting a vital role in creating and maintaining communication between SMEs and government bodies running programs that target SMEs, and other relevant stakeholders at local and regional level by:

a. Coordinating the efforts being put from local and international support bodies targeting SMEs at the national level to ensure focused targeting of their programs to the various needs of SMEs to avoid overlapping or duplication
b. Working in full partnership with government bodies to create policies relating to SME development
c. Focusing on entrepreneurship, innovation and youth development through programs and activities that enhance the participation of women in the economic cycle, and the importance of tackling this through an integrated strategy
d. Compiling a database to raise awareness of, and capacity building for, SMEs
e. Creating links between SMEs and larger companies and sectors (exporters or non-exporters) in an attempt to achieve sustainable growth
f. Participating in financial programs with the public sector to offer various technical support programs

        11. Foster cooperation and collaboration with government institutions to develop a common understanding of SME                             needs and agree on support mechanisms
        12. Establish a unit for SME development in each chamber’s union.
        13. Reduce business registration procedures so that it can be completed in under one week
        14. Chambers of industry and trade to compile a list of local experts from various fields related to SME development                           offering affordable technical consultations and advisory services
        15. Offer training and capacity building services in all regions, especially remote areas
       16. Establish a one-stop-shop to facilitate the provision of services and information for SMEs
      17. Chambers of industry and trade shall serve as a source for launching innovation concepts, and offer everything              required to spread this concept through supporting entrepreneurship, research and development. Chambers must modify     how they offer services to SMEs, and come up with more innovative solutions
      18. Establish business incubators at the sectoral level for SMEs through the support of the private sector
JCI will strive to offer these recommendations in the form of a clear roadmap that enables chambers and unions in the Arab region must play a distinguished new role in offering unique and unconventional services to SMEs, as they represent the biggest segment of enterprises in the Arab region. This will help in achieving the socio-economic and development objectives to which all in this region aspire.

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