Small And Medium Scale Industry The Best Option For Economy Development
How Developed Countries Achieved Their Success Using The Secret Of Economy Development In The Actualisation Of Industrial Development
The Necessity Of Small And Medium Scale Industry To The Global World
The fast growing economy in the world today make use of small and medium scale industry to achieve their economy growth. The small and medium scale industry as a vital role it plays in contributing to the enhancement of their social and economy growth of a nation. Therefore, it is a driving force of a nation. Before now, is a strategy put in place by developed countries to achieve industrial development. Developing countries need to adopt this system in other to increase their level of growth.
The growth of a nation becomes stunted, when some sectors of the economy is allowed to suffer. The impact of small and medium scale industry cannot be over- emphasized, as it is the life blood of a nation economy.
Small and medium scale business is an independently owned, managed, operate more locally, finance through internal source and it will grew over the years to become giant companies.
Government of both developed and developing countries have been putting difference measures in place to ensure the success of small and medium scale industry, but the government of developing countries is not doing enough. Therefore, they are faced with some challenges which have resulted to their poor performance. These problems are as follows;
Poor infrastructural facilities tend to be a big factors affecting small and medium scale industry today. When necessary facilities are not put in place, and even when it is in place, lack of maintenance of such facilities. This will definitely increase cost of operation of the industry. They include no access water, poor road and no constant supply of electricity.
No business can function perfectly without adequate capital. Lack of access to credit facilities from banks as a result of high interest rate, no collateral to stand in place for loan. Also, no grant was provided by government to assist the industry .This has affected their operation of performance.
Due to economic of scale, giant firms have competitive advantage over small and medium scale business.
Small and medium scale industry makes use of outdated technology. Poor financial status of this industry deprived them to upgrade to modern technology.
Unfair government policy can affect their existence and operation. Harsh policy like cumbersome laws and regulations need to be checked in other to provide enabling environment for the industry. Also, different agencies and institutes established by government must be adequately funded. Research agencies and management institutes must be functioning well, for small and medium scale industry to achieve success.
Small and medium scale industry must have access to raw material. Availability of such raw material is necessary in other to produce enough output. It will be difficult to remain in business, if there is shortage of input.
Other problems faced are wrong choice of business, lack of experience staff and lack of managerial know how. They affect the effectiveness and efficiency in running the business.
Small and medium scale industry helps developing countries in economic liberalization. It goes a long way in reducing unemployment rate.
Small and medium scale industry development process goes beyond their strength in number. It helps international communities and developing countries to integrate into global economy.