The Hindu Business Line : Effect of globalisation on SMEs under study

THE Kochi-based Institute of Small Enterprises Development (ISED) has launched a `Programme on Globalisation and SMEs' aimed at identifying the latest issues relating to globalisation as they apply to SMEs, and to address these issues in terms of concrete action.

Several studies undertaken by the Institute "have convinced us the need for an integrated approach and based on discussions with the relevant stakeholders, and as such the Institute has launched this action-oriented programme," Dr P.M. Mathew, Director, ISED said.

The activities in this category, he said, would include seminars and discussions, industry-wise monitoring of developments, and capacity building exercises. According to him globalisation offers an environment within which small and medium enterprises have to increasingly compete and perform.

While some of their traditional markets have shrunk, the market opportunities in some other areas have increased. It is important that these rapid changes are quickly understood, and corrective measures taken without delay, he said.

Several promotional agencies, including development finance institutions (DFIs), governmental agencies and NGOs have initiated steps to inform and sensitise small entrepreneurs on various aspects of the emerging environment. While a few entrepreneurs make use of such opportunities, they do not equip the participants to take stock of their present level of performance, and to improve it.

It is, therefore, important that skills vital for self-analysis of performance are provided to the entrepreneurs. This will help them right questions, to look for the right type of business development services (BDSs), and to translate such understanding and support services into tools useful to improve their performance.

As part of the Programme-SME, a workshop on `Globalisation and Post Iraq Challenges of Small Industry' was organised recently by the ISED Small Enterprise Observatory (ISED-SEO) in association with the Malabar Chamber of Commerce in Kozhikode.

Dr Mathew said that the rapid changes in the global economic and political environment in the post-Iraq period, were likely to significantly affect the prospects of SMEs in the country and the State. There is an enhanced likelihood of multilateral trade and development organisations like the WTO, being decimated.

Bilateralism through the back door is the emerging trend in world trade. Non-tariff barriers are likely to be increasingly employed by powerful countries, against the interests of countries like India. The possibility of manpower exports is coming down, and out-migration and its associated negative consequences are becoming more pervasive.

This would imply falling incomes as well as demand for several goods of mass consumption, on which small industry hitherto banked upon significantly. It is important that these issues are scientifically analysed and articulated to the specific context of Kerala, in order to arrive at concrete courses of action.

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Effect of globalisation on SMEs under study