The Importance of SME Enterprises in Switzerland - Assignment Example

SMALL AND MEDIUM ENTERPRISES Explain The Importance Of SME Enterprises In Switzerland. An enterprise is generally considered as any particular entity which is engaged in any kind of an economic activity rather than its irrespective goals or aims. This basically includes in particular any self-employed persons and family businesses who are engaged in crafting or in any kind of other activities, and also the partnerships or the associations which are regularly engaged in any kind of an economic activity. SME either Small or the Medium-Sized Enterprises generally serves as the whole Switzerland, by providing the full range of various services and products from the fixed-line and also from the mobile communications to data service, internet, maintenance as well as the operation of the whole IT infrastructure. SME also receives integrated solutions which are tailored to their particular requirements, to the right connections, to the secure accesses, also to the professional services and to the intelligent networks. SMEs are the enterprises which are working in order to make the Swiss economy the world's best economy. Small and medium-sized enterprises are also considered as the backbone of the Swiss economy. Along with this Credit Suisse also considers it as an important in order to support the Swiss SMEs by operating a consistent as well as reliable lending policy and also by offering them various advices on various topics such as the succession planning. In the previous year 2008, the Credit Suisse also increased its particular credit volume to SMEs by 5%, figure which is much higher than the annual growth rate of the country’s gross domestic product and services. The bank has also its business relationship with around 100,000 Swiss companies; it means that almost every third SME is a client of the Credit Suisse. Along with this the general banking services, which they provide SMEs with various alternative forms of financing that also allow their clients in order to obtain various products to meet their individual needs and demands. In addition to all this system, they also make available their international know how, that how their business actually works. All of this, combined with their other services which are offered throughout the bank, means that they are also able in order to give the competent advice to all the Swiss companies. They are also always on hand in order to support their clients planning so that they can easily invest or can also launch different kinds of the business activities in the growth markets like China. Clients can also count on their extensive, on also their global network and their many years of experience. Their aim is to be able to use their products and also their respective expertise in order to assist all the companies and also all the entrepreneurs, particularly in those time when there is an economic difficulty, and to be one of the reliable partner in the long term goal and planning. (Haathi, Hall and Donckels, 185) Small and medium sized enterprises (SMEs) are one of the principal and also the driving forces in the economic development. They basically stimulate the private ownership and also the entrepreneurial skills, they are also flexible and can therefore adapt quickly to all the changing market supply and demand situations, they also generate employment, try to help the diversify economic activity and tend to make a significant contribution to trade and also to exports. Different transition economies have also acknowledged that SMEs are very much crucial for the industrial restructuring and have also formulated the national SME policies, all the different kinds of programmes and the enterprise development policies. In order to improve their economic situation and also to achieve their goals related to their development, different macroeconomic policies must also translate into a certain on the ground in order to help the business turn opportunities which are the outcomes from the globalization of the overall world economy into an actual export and import deals.. Strategic importance of SMEs The importance of small and medium sized enterprises (SMEs) in the market is as follows: In Switzerland and in Europe economic area, there are more than 16 million enterprises; around less than 1% are the large enterprises and the rest are SMEs. SMEs generally constitute the backbone of all the the Asia Pacific region, accounting for around 90% of the enterprises. The strong and one of the main performances of the United States economy in the recent years has been mainly driven largely by the creation and by the development of SMEs, which nearly accounted for 43% of the net job creation between 1990 and 1994. The main reasons for the strategic importance of the SMEs are as under: SMEs also contribute towards the employment growth at a higher rate as compare to the larger firms and on the other hand side they may also provide a very significant share of the overall employment. (Haathi, Hall and Donckels, 185) SMEs can also help in the restructuring and in the streamlining of the large state-owned enterprises by enabling them in order to abandon and/or to sell off the non-core production activities and also by absorbing the redundant employees. In Which Sector And Geographical Region Are They Operating? SMEs are basically operating worldwide in order to gain maximum amount of profit, and also to make their business the successful one. It is operating in the business sector where with the help of various regions it is gaining profits day by day. On the other hand SMEs always represented the main and also an important model of the socio-economic policies of various Governments of all the Emerging Markets which merely emphasized on the judicious use of the foreign exchange for all the import of the capital goods and inputs; also for the labour intensive mode of production; the employment generation; the non concentration of the diffusion of economic power in the hands of few representatives. It is also mixed with the policy of the de-concentration of industrial activities in some of the geographical centers. It can also be observed that by and large, SMEs in the Emerging Markets also met the various expectations of the Government in this major respect. SMEs are also developed in such a manner, which therefore made it easier for it to achieve many important objectives. (Haathi, Hall and Donckels, 185) The globalization level of the business now has increasingly drawn the SMEs into the global value chains by various types of the cross border activities. There are many entrepreneurs, who are now recognizing the various opportunities that, this process usually offers and the gaining access to the global markets which has now become a main and also an important strategic instrument for their further and also for their future development. Access to all the global markets for the small businesses can also offer a host of the business opportunities, like the larger and the new niche markets; also the possibilities in order to damage and also to exploit the scale and all the technological advantages; also the upgrading of the technological capability; various ways of the spreading risk; lowering and also sharing the costs, including the R&D costs; and in many other cases improving and advancing the access in order to finance. Gaining more and advanced access to the global markets can also help the prospective high growth firms in order to realize their potential and also to recognize and identify their strengths which are considered as an essential and an important strategic move for the SMEs along with the large investments in all the intellectual property. To prosper, the SMEs needs and demands, a conductive business environment along with proper regulations with adequate basic and important infrastructure services is needed in order to make SMEs the proper one. As the SMEs are growing day by day, they also increasingly need a better connectivity in order to export all the markets and also the world economy (Haathi, Hall and Donckels, 185). Small and medium sized enterprises in all the developed regions are more exposed to the greater and also to the higher risks in regards to the allocation decisions. This basically includes the expenditures on the fixed assets, and the environmental management, as well as the choice of all the suitable markets for the service or for the product at hand.  This part of the paper basically examines the different means for SMEs in order to expand internationally given the current as well as the future fiscal climate, and the rapid advances in certain to enable various technologies. The main and one of the important goals is to identify the set of criteria which usually the smaller firms can use in order to globalize which can also reduce risk and can increase access to capital. In various geographical area SME are operating according to its needs and demands. (Gupta and Sharma, 431) Who Is A Typical Swiss Entrepreneur? To own a business is a great and a tough challenge. On the other hand, it is not that much difficult to start a new business and also to succeed in it. While starting a new business, an entrepreneur has to decide a number of things e.g. that which main product he would like to keep in focus. Also, he will have to see that whether there was any market for that producing product or not? Before starting a business, a swiss entrepreneur has to carry out a particular survey as to know that which product was actually required by the market. Then he should further on choose his product by keeping all the market needs and demands in view. An important issue in the ethnic entrepreneurship is whether ethnic entrepreneurs produce for their own set of ethnic niches or whether they usually try in order to cover a wider market of the customers. An external orientation is one of the important skills for every entrepreneur, which also requires more skills, the diversified communication channels and an access in order to various government policies to support various measures. A break-out strategy for especially Swiss entrepreneurs is much ethnic which can be defined as an important strategy to get away from the entire situation in which one’s own ethnic groups dominate such factors are capital, the clients and the employees. In other words, a break out strategy is an important strategy for Swiss entrepreneurs in order to escape from all the internal orientation or from being an ethnic enclave in some of the stages in order to orient to the external markets. An orientation towards a non-traditional market can also help especially the younger and the innovative generation of the entrepreneurs. There is another way too, which can be found in the new and also in efficient marketing strategies. It is clear and also obvious that the entire break out strategies basically require some crucial and also some important changes in the marketing strategies. In order to develop an advanced break-out strategy, changes in place, product, people, promotion and prices should be there. (Gupta and Sharma, 431) Contribution Of Swiss SME To The Swiss Economy: Is Export Important In This Country? As the global recession has greatly affected the economy of Switzerland and there is now a slowdown in the trade, and also in the trade potential. As mentioned earlier that the Small and Medium Enterprises (SME) sector is the backbone of the Swiss economy and now the Swiss government has already taken several measures in order to provide funds to the SMEs for the boosting up of their various business activities. It is also highlighted that many small and medium enterprises are now contributing to the Swiss economy for several reasons. The service based and the industrial based SMEs, both noted stagnating total sales and also the declining exports in the fourth quarter. Exports have also suffered appreciably under the global economic downturn, and therefore the strength of the Swiss versus the Euro had a negative impact on the demand from all the neighboring countries. In addition to this, the decline in the demand has also made it very much difficult to hike the prices. In the final and one of an important quarter of the year, all the profits remained stable and the employee numbers actually rose slightly. Swiss SMEs in the processing industry had much fewer unfilled orders than the expected one, despite the cutting back of the production. Export is termed as an important tool, but it can be only possible when the rates are at equal prices and the country is not facing any kind of the financial problems. Swiss SME has contributed a lot towards the economy, and still contributing but the major problem is the financial risk. The Growth has followed a continous decreasing trend in the year 2005. The Swiss GDP growth rate was around 1.7% in the year 2004 and was around 0.8% in the year 2005. The IMF also forecasts a 1.8% of the growth in the year 2006. Switzerland is generally open to an international trade and has also achieved its best result regarding its external trade; on the other hand exports have also risen by 4.5% in the year 2005. The Swiss SME has contributed a lot towards the economy in many ways. Small as well as the medium business has done a variety of tasks in order to make the economy the better and the advanced one. (Gupta and Sharma, 431) Since Switzerland is a small country and also has limited market capabilities, export is therefore a very important factor for its economy. On the other hand, Switzerland doesn't have as much resources itself, which helps it to make import to an important and also an essential constant of the Swiss economy as well. Overall, the Switzerland's export economy is in a good as well as in a stable shape. 50% of the country's export products basically originate from the sectors that have a clear and a prominent comparative advantage over the most important trading partners. As a result of this increasing globalization, since 1990 the share of the domestic gross value has also been added in the exports actually decreased, but still it appears as the stable compared with Germany. In other words we can say that a relatively large amount of the Swiss materials and labor still goes into the goods which are exported from Switzerland. Despite all the gloomy prospects for the immediate future, on balancing the situation also looks like a positive for all the Switzerland's exporting companies. Switzerland is now relatively very well diversified in a relation to all its trading partners, and it should be even more so in the future based on the total growing trade with all the emerging market countries. Furthermore, Switzerland is also strategically well positioned along with its focus on all the high-quality products. The country has also comparatively more competitive advantages particularly in the watch making, also in the pharmaceuticals business and in chemicals, medical technology, and also in the measurement and control technology sectors. Switzerland is the technology leader in different knowledge-based and in different research-intensive products and is now extending its lead thanks to its talent for creativity and also for innovation. (Gupta and Sharma, 431) Which Associations and Political Parties Support Entrepreneurs There are different associations and the political parties which actually control and support the entrepreurs. In order to support all the entrepreneurs there is actually a need to create an environment which is friendly for every kind of the business, especially for the foreign trade which is oriented by the SMEs. The Governments’ role in the process should be much limited in order to provide the enabling and an efficient environment for the private sector development, and also to correct the potential market failures and to create a better level-playing field that will easily allow the SMEs to compete with all their larger counterparts on an equal and well defined basis. Governments also do not have the finances and they also do not have the ability in order to get involved directly in any kind of the economic activities like the SME financing and all the service provision. The Emerging international experience is also demonstrating that government is not the appropriate and the proper vehicle in order to implement and also to coordinate such efforts. Following is the list which basically includes the only well-established regional, national, and also the global organizations which are focused specifically on entrepreneurs. They all are supported by face to face events or by online community by various organizations and also by different political parties. (Gupta and Sharma, 431) National Association for the Self-Employed (NASE) NASE was basically founded in 1981 by the small business owners who generally realized that they could enjoy the same economies of the scale in order to purchase services and goods by banding together. NASE also keeps their all the members informed about all the legislative activities and also provides access to resources and to experts as well. National Federation Of Independent Business (NFIB) With over 600,000 members, the NFIB is the one nation's largest advocacy organization which generally represents the small and also the independent businesses. NFIB was also created in order to give small and also the independent business a main voice in the entire governmental based decision making. Entrepreneurs' Organization (EO) A global non-profit educational organization for the business owners under the age of 50, this one is generally for all the enterprising. Forum for Women Entrepreneurs (FWE) FWE is the service organization for the women building and also for leading high-growth technology and the life science companies. International Virtual Women's Chamber of Commerce (IVWCC) The IVWCC also supports women-owned micro-businesses in the start-up or also in an emergent phase of their business. They basically provide a forum for communication and also for development of the joint partnerships around the globe. National Association of Women Business Owners (NAWBO) NAWBO basically represents the interests of the women entrepreneurs in all the types of businesses and also promotes the activism by the women entrepreneurs in the social as well as in the political arenas. (Terziovski, 224) What Is Done To Create A New Generation Of Entrepreneurs In Switzerland? Various activities have been done in order to create a new generation of entrepreneurs in Switzerland; one of the most important things is to become innovative and also to become creative. All the Swiss entrepreneurs also showed dynamism as they are growing and also expanding their roles. They also try to foster deeper connections with a growing and an efficient number of key philanthropies in all over the world. The atmosphere of openness, full cooperation and the trust-building very easily enables the development of all the closer working relationships in order to generate better results. Various activities and programs have been launched in order to create a new and a talented generation for the Swiss entrepreneurs. Various programs have been actively putting together the discussions, ideas and also different visits in innovation and to have creative and a new entrepreneurship. Many researchers help the Swiss researchers who were interested in discussing various innovative as well as creative ideas along with their counterparts in the Boston area and therefore they work closely along with entrepreneurs in launching the ventures around the technologies which were developed at the various Swiss institutions. The researchers were also advising the Swiss organizations and also to the decision-makers on various programs and policies in order to make the country more and more innovative and entrepreneurial. (Terziovski, 224) Following are some examples of all the recent activities: Organization of the panels showcasing the Swiss technologies basically include the 3rd edition of a Swiss Nanotech Road show, also a discussion on the bioinformatics industry and also a deep look at new and innovative technologies. Training of all the young entrepreneurs: NETS – it was sponsored by Gebert Ruf Stiftung and also organized by Venturelab in 2006 – it was a 2-week training and networking program in the Boston area for promising all the entrepreneurs, so that they can be more innovative and also more creative. Supporting the Swiss entrepreneurs who were interested in the US market: various assistance program in the partnership with CTI startups took place in order to help all the label companies to find partners and also to contacts in the US. Advising the Swiss decision makers on their different initiatives in innovation: report for EPFL’s innovation group about all the entrepreneurial activities at various universities in order to brief them and also to discuss about all the activities and also about various decisions. Videoconferences were held in order to discuss the latest technological developments and also the favor transatlantic know-how exchange. These all above mentioned steps are the few one, which were generally taken in order to create new and innovative as well as creative Swiss entrepreneurs. Working together with full cooperation is the main theme, with the help of which you can create the new and an innovative generation of the Swiss entrepreneurs who can help the Swiss economy is different ways. Working together, sharing ideas, listening to each other and then making the decision with full collaboration is the main step which should be taken in order to create innovative Swiss entrepreneurs. (Terziovski, 224) REFERENCES Antii juhani Haathi, Graham Hall, Rik Donckels. The internationalization of SMEs: The interstratos project. Page 100-185. (1998) No name. Switzerland: seizing the opportunities for growth. Page 100-183. (2006). Jatinder N. D. Gupta, Sushil K. Sharma. Handbook of Research on enterprise systems. Page 400-431. (2009) Mile terziovski. Emerging markets through innovation and entrepreneurship: European Research and practice. Page 200-224. (2008) Read More