Governments urged to support small businesses struggling for investment

By SMBWorld Asia Editors | Jan 13, 2012

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Governments and regulators around the world have been called on by a new global forum to champion and support small and medium sized enterprises (SMEs) which have been struggling for investment and could be vulnerable even after the economy recovers.

The Global Forum for SMEs of ACCA (the Association of Chartered Certified Accountants) has said that the role for Governments is clear - they need to understand, champion and support the SME sector, ensuring that policy and regulatory frameworks continue to take into consideration the needs of small firms. It also called on SMEs to apply forward thinking and keep close attention to market shifts in order to maintain their share of the market.

Due to the weakening bank lending environment and higher cost of lending, SMEs have reduced their levels of investment which may make them vulnerable in the future. They will therefore need to look beyond the current recession to ensure future competitiveness.

The new forum, which has representatives from 17 countries around the world, and which looks at SME issues from a global perspective, has outlined a number of key issues which it will be considering in 2012.

These include: how businesses will cope with globalisation, the challenges of succession planning; changes in technology; and that with many SME owners or managers lack managerial training or experience how accountants can offer services to help address these issues.

"This is a critical time for SMEs, while many have shown great resilience in tough economic times, they do need a great deal of support from governments and regulators, who may sometimes overlook their needs and focus on larger listed companies," says Forum chairman Mark Gold, who is immediate past President of ACCA.

Gold adds that given that in the overwhelming number of economies SMEs account for more than 95% of all enterprises and create more than half the employment, they are critical to economic regeneration and must be given priority.

"The forum, which we believe is unique in focusing on SMEs from a global perspective, will be discussing these issues in detail and calling for further action," says Gold.

Forum member Gabriel Low from Singapore, who is SEA CFO of German multinational company, GEA Westfalia Separator (SEA) Pte Ltd and fellow of the Association of Chartered Certified Accountants (FCCA) notes that SMEs play a vital role contributing to the economy in Singapore.

"They are entrepreneurs and innovators. The challenge is to explore how to create an environment where they can further innovate and grow, and eventually become successful large enterprises," adds Low.

The Forum will explore the factors that are critical to SMEs due to their size limitations - such as how to ensure low operating costs (especially rentals), availability of manpower and minimal regulations, rules and red tape.

Low notes that government bodies in Singapore like ACRA, MOM, IRAS, LTA, JTC and MTI can play critical roles in coordinating and adjusting their policies to facilitate a more open, collaborative, and business oriented approach when SMEs need help.