MGT601 SME Management GDB 3 Solution Fall 2012

The premise
To date, governments around the globe are paying special attention towards the development of cultures with the prime objective of upgrading technology, capacity and competitiveness of Small and Medium Enterprises (SMEs). Cluster development can be called as “Networking” of related industries. It is a geographical concentration SMEs of related industries. The small and medium enterprises can enjoy the benefits of collective economies of scale which is not possible while operating without close networking. While operating in a cluster, SMEs can learn from each other’s ideas and experiences, can hire technical assistance and defend their common interest through collective collaborations. In Pakistan, Gujranwala (for electronics), Sialkot (for sports, surgical instruments), Gujarat and Daska (for surgical instruments), Bahawalpur and Multan (for handy craft) are the naturally developed clusters where related industries are geographically concentrated. It is a known fact that SMEs, especially in developing countries, are operating with traditional methods of production with least exposure to latest technology, thus fail to bring innovation, either in cost or process, so far.

Point of Discussion (POD)
How the Government of Pakistan with the joint collaboration of SMEs association operating in these clusters can bring the culture of innovation to upgrade technology, capacity and competitiveness of Small and Medium Enterprises (SMEs). Produce sufficient number of arguments in the favor of your answer.


SME Development agency in Pakistan under the Federal Government, SMEDA also aggressively works to develop international linkages with other countries & international donor agencies. SMEDA strives to develop SME Development ties on bilateral and multilateral basis with countries around the globe. The organization has working relations with over 50 countries on different levels of collaboration which includes, but not limited to, share of information and experiences, business matchmaking for investment and joint venture opportunities, support & encouragement of trade fairs and business events, and facilitation of inward and outward trade delegations. Out of these over 50 countries, SMEDA has signed Memorandum of Understanding with 9 countries with its counterpart agencies, these include China, Poland, Turkey, Morocco, Tunisia, Algeria, Mauritius, Kuwait, and Uzbekistan.
SMEDA has also developed strong working ties with a number of international donor agencies who are involved in the economic development of Pakistan. This collaboration generally includes financial and technical assistance to the SME sector of Pakistan. These agencies include JICA, UNIDO, UNDP, World Bank, Asian Development Bank, USAID, SES, GTZ etc.

SMEDA in collaboration with JICA (Japan International Cooperation Agency) has initiated an Industry Support Program in Pakistan. The two organizations are working together to provide technical assistance to various industrial sectors through Japanese Senior Experts. Textiles being the most vital sector of our economy was selected to start with for providing support to this industry with the modern techniques, methodology and effective management systems, and to cope up with the challenge of post WTO regime. In this regard, five textile experts of JICA have worked for two years as Senior Volunteers (SVs) at SMEDA and revamped around 166 Textile units. Currently SMEDA’s own team is following-up the project; however efforts are underway to acquire more experts in furniture, fisheries and various other projects.
In order to meet the goal of reducing poverty and expand non-farm economic opportunities in addition to agriculture in rural areas, Aik Hunar Aik Nagar (AHAN) initiative of the Government of Pakistan has been launched. AHAN is local adoption of Japan’s One Village One Product (OVOP) concept, which is already imitated by Thailand and India. The initiative envisages enabling the rural businesses to access a range of business development services, including appropriate technologies and financial capital. The direct benefits are expected to flow from increased employment and income earning opportunities in the rural areas, particularly for wage earners, women and poor producer groups with potential to engage in a higher level of commercial activity.
SMEDA has also recently established Investment Promotion Unit (IPU) in collaboration with UNIDO under the financial grant and credit facilitation available after an agreement between the Government of Italy and the Government of Pakistan for the development of Pakistani SMEs.
SMEDA is also a model organization of Government of Pakistan’s E-Governance initiatives. Benefited with virtually paper less and dynamic environment as well as highly professional staff, SMEDA envisions furthering synergies to its SME focused efforts and contribute to the economic uplift of economy.