Small Medium Enterprises (SMEs) in the GCC have the potential to contribute an additional GDP of $100 billion and up to 2 million jobs in the coming years, according to a leading global management consultancy.

Recent international research by A T Kearney highlights the crucial and almost mandatory role and importance SMEs play in the successful development of sustainable domestic economies and delivering on the ambitions of economic development plans and strategies.

“The GCC is ideally placed to leverage the key learnings from Europe to create a successful SME sector in the GCC. The total potential for GCC is an additional $100 billion to GDP and up to 2 million jobs in the coming years. This number is based on A T Kearney's analysis of benchmarks of SME job creation and contribution to GDP from across the world,” said Dr Dirk Buchta, vice president and managing director A T Kearney Middle East.

“One of the key government initiatives identified in our research is; government support in developing systematic business development opportunities and supporting product and service innovation via SMEs.”

Globally, SMEs represent a large share of registered businesses and contribute between 35-45 per cent to the global GDP. They also represent an estimated 40-60 per cent of global employment.

A T Kearney's research in emerging markets shows that successful SMEs create jobs at a rate which is four times faster than the rate of larger corporations and create revenues and GDP at a rate which is six times faster than large corporations. This is largely due to the fact that successful SMEs tend to grow more exponentially than large blue chip and established business.

“A T Kearney has worked with governments across the world to improve the SME sector. SMEs are the backbone of any successful and sustainable economy, they are the blood cells behind successfully diversified economies and large corporations. Successful long term economic growth plans for the GCC can only succeed with strong support to SMEs.”

“The approach for diversification in the Middle East has so far primarily been concentrated on the development of freezones, to grow the GDP and attract international investment: this has been done successfully and is fine as a first step. The next step is to create a long term growth locomotive. This is done by developing a strong SME sector.”

“Developing the competitive skills required for growing an entire new industry can take years to achieve and typically demands large capital injections. Tactically supporting the SME sector is less capital intensive, quicker to execute, and generates added value faster. SMEs are expected to directly contribute to the regional economies’ bottom-line,” added Matthieu de Clercq, senior manager, A T Kearney Middle East.-TradeArabia News Service