Small And Medium Enterprises Participation Research Articles

Collaborative relationships: a stimulus for innovation culture and participation of SMEs in public procurement

PurposeThe role of small and medium enterprises (SMEs) in stimulating economic growth and innovation underscores the crucial need to understand the factors that influence their participation in public sector markets. Drawing on network theory, this research delves into the interaction effect of innovation culture and collaborative relationships on SME participation in public procurement. It assesses how collaborative relationships can serve as a vital mediator, enhancing the impact of innovation culture on SME participation in public procurement.Design/methodology/approachThe research was carried out with 248 SME suppliers in Ilala district, located in the Dar es Salaam region of Tanzania, utilizing a questionnaire survey and a stratified random sampling technique. Structural equation modeling (SEM) and the Hayes PROCESS macro were employed to analyze the data.FindingsThe study findings highlight collaborative relationships as a pivotal mediator between innovation culture and SME participation in public procurement. Although no direct link between innovation culture and SME participation in public procurement was established, the results indicate a noteworthy positive influence of innovation culture on collaborative relationships, subsequently affecting SME participation in public procurement.Practical implicationsThe research underscores the significance of promoting an innovation-driven culture to support the participation of SMEs within public procurement activities. Additionally, the research offers valuable perspectives on the role of collaborative relationships in stimulating innovation and achieving success in public procurement, guiding SME managers, policymakers and industry stakeholders in cultivating productive relationships and partnerships.Originality/valueThe research enhances both theoretical and practical insights, adding to the literature that addresses the effects of innovation culture and collaborative relationships on SME participation in public procurement. These insights can be valuable to policymakers and SME managers in designing appropriate strategies that foster an innovative culture and explore the benefits of collaborative relationships for effective participation in public procurement.

Participation of women-owned SMEs in public procurement: the role of entrepreneurial orientation and knowledge management orientation

PurposeThis study aims to examine the influence of entrepreneurial orientation and knowledge management orientation on participation of women-owned small and medium enterprises (SMEs) in public procurement. The research also aimed at examining the influence of knowledge management orientation on entrepreneurial orientation, and the mediating role of entrepreneurial orientation on the relationship between Knowledge management orientation and participation of women-owned SMEs in public procurement.Design/methodology/approachThe study used a quantitative cross-sectional survey design. Data were collected using a drop-off pick-up method. The determined sample size for the women-owned SME firms was 123, while an effective sample size of 103 was obtained, and covariance-based structural equation modelling was used to test the research hypotheses.FindingsFindings indicated that entrepreneurial orientation and knowledge management positively and significantly influenced both the search for tender opportunities and the number of times the firm submitted bids. Knowledge management orientation had a significant positive influence on entrepreneurial orientation, while entrepreneurial orientation partially mediated the relationship between knowledge management orientation and participation of women-owned SMEs in public procurement, thus implying that both knowledge management orientation and entrepreneurial orientation contribute to search for tender opportunities and the number of times a woman-owned SME firm submits bids.Research limitations/implicationsThe study was cross-sectional and quantitative in nature, yet it involved behaviour aspects such as participation in public procurement. Further, a wholistic approach is taken when studying the SMEs disregarding the industrial characteristics to which the SME belongs.Social implicationsAlmost 30% to 38% of SMEs in developing countries are owned by women. Focusing on increasing the number of women owned SMEs participating in public procurement will improve the nations’ GDP and increase the number of the citizens in the labour force due to increased employability.Originality/valuePrevious research takes a wholistic approach when examining SMEs participation in public sector procurement disregarding the impact of gender. Further, knowledge management orientation and entrepreneurial orientation in women-owned SMEs are studied for the first time in a public procurement setting.

Impact of Global Value Chain on the Performance of SMEs

ABSTRACT Background The development of Small and Medium Enterprises (SME) and Global Value Chain (GVC) participation have created an avenue for many researches. There are plenty of researches which have been conducted to identify the impact of SMEs to the economy and society of a country, identify the impact of Global Value Chain to the economy and society of a country, identify the factors affect to the development of SMEs, identify the factors affect to SMEs to actively participate in Global Value Chain and identify the Impact of Global Value Chain on the Performance of SMEs. Therefore, it is worth to identify the common factors which affect to the SMEs to actively participate in Global Value Chain and main impact of Global Value Chain on the Performance of SMEs by critically evaluating the researches done under this emerging concepts. Methods This study is conducted using extracted data from the previously conducted researches under the area of SME and GVC and published in book published by the Asian Development Bank Institute under the title of “ENHANCING SME PARTICIPATION IN GLOBAL VALUE CHAINS”. The data and results were critically evaluated to achieve the objectives.

Small and medium enterprises in public procurement: Factors affecting the decisions of public bodies

The study assesses factors influencing public bodies’decisions to conduct purchases with small and medium enterprises (SMEs). Mechanisms supporting SMEs are enshrined in the laws governing the system of state and state-corporate procurement in Russia and are mandatory for Russian contracting authorities. The inclusion of these mechanisms in the public procurement legislation implies their direct (explicit) impact, which applies equally to all regulated organizations. However, despite some similarities in the mechanisms for supporting SMEs in the laws on public procurement (both laws dictate to conduct set-aside procedures for SMEs), the frequency of procurement with SMEs participation differs between 44 FL and 223 FL. The study revealed that the choice of contracting authorities is influenced by the type of law, the position in the public power hierarchy, and the form of ownership of the organisation. The decision to purchase from SMEs is also related to the subject of the procurement and the method of identifying a supplier. The results of the study demonstrate heterogeneity in the behaviour of contracting authorities when purchasing from SMEs and explain the reasons of heterogeneity by differences in the regulatory pressure.

Procurement policy and SME participation in public purchasing

This study investigates the relationship between regulatory policies governing public procurement and participation by small and medium enterprises (SMEs), using a large dataset on European procurement. We find that better quality procurement regulation is associated with greater SME participation and higher probability that SMEs win contracts. Dividing contracts into smaller lots, a key feature of 2014 EU procurement regulation reform, bolsters participation by SMEs but only increases the probability of SMEs winning contracts for small value lots (€25,000 or less). Our results suggest governments seeking to enhance participation by SMEs in public procurement without explicitly favoring SMEs can do so by improving the overall quality of procurement processes.

Do Industry Forces Affect Small and Medium Enterprise’s Investment in Downstream Oil and Gas Sector? Empirical Evidence from Ghana

ABSTRACT There is the need to reexamine the nexus between industry forces and investment behavior due to mixed and ambiguous results in most previous studies. The purpose of this study is to investigate how the antecedents of industry forces affect investment behavior of Small and medium enterprises (SMEs) in Ghana’s downstream oil and gas sector. The SMEs manager’s perceived benefits of oil and gas trade have also been examined. A cross sectional survey methodology has been used to collect data from 475 Ghanaian SMEs via structured questionnaire. Data have been analyzed using partial least square method. Using exploratory factor analysis and multiple regression analysis our results reveal that threat of entry, competitive rivalry, power of suppliers and power of buyers are related to SMEs investment behavior. We find insufficient empirical evidence to support the relationship between threat of substitutes and investment behavior. Our substantive evidence further show that SMEs managers/owners have high expectation from the oil and gas trade notably: High earnings, employment opportunities, improvement in infrastructure and service extension to Ghanaians. Our robust results are partially consistent with Porters’ five forces model. These results have important implication on oil and gas investment and industrial restructuring to facilitate SMEs participation in the sector.

SME Participation in Public Purchasing: Procurement Policy Matters

This paper investigates the relationship between regulatory policies governing public procurement and participation by small and medium enterprises (SMEs), using a large dataset on European procurement. We find that countries with better quality procurement regulation have greater SME participation and higher probability that SMEs win contracts. Dividing contracts into smaller lots bolsters participation by SMEs, but only increases the probability of SMEs winning contracts for small value lots (â?¬25,000 or less). Counterfactual simulations suggest if governments want to enhance participation by SMEs in public procurement the focus should be on improving the overall quality of procurement processes.

English

The global value chain approach has become a useful strategy to reduce poverty in the mining area by forming linkages among various players. This approach gives an opportunity to all stakeholders to participate in any suitable activity along the value chain. Once small and medium enterprises (SMEs) enter the value chain, they supply and earn sustainable income. Unfortunately, geographical location of the mines acts as a barrier for SMEs to supply their goods and services. The geographical location comes with a challenge for both urban and rural based SMEs to access the mines due to poor roads and expensive electricity infrastructure. The main objective was to examine the impact of geographical location on inclusion of SMEs in the mining global value chain. The global value chain literature focusing on challenges that SME face to supply to the mines was reviewed to give insight on how these barriers affect SMEs participation. A random sampling was conducted among the SMEs whose age ranges from below 20 to above 40 from the mining area to determine the extent to which geographical location affects their inclusion to supply to the mines. Findings show that SMEs below the age of 30 are greatly affected to supply to the mines. In addition, rural based SMEs who are the majority had greater challenges to supply to the mines due to poor road and expensive electricity infrastructure. The female genders were also affected with the geographical factors. The study recommends that the government through Road Development Agency as well as the Ministry of Energy constantly repair the roads and improve energy sources, respectively so that SMEs can afford to access the mines services. Key words: Electricity and road infrastructure barriers, small and medium enterprises, mining global value chain

Comparative Analysis of Supporting Small and Medium Enterprises for Enhancing Created Added Value in the EU and China

Considering that Small and Medium Enterprises (SMEs) play a significant role in the economy of country and taking into account the changes in the modern world economy, we investigated the problem of increasing the SMEs’ contribution into national economy by using new opportunities of business environment. The problem can be solved through the participation of SMEs in the links of the global value chain with high added value. However, it is necessary to find new instruments for SMEs’ support. The study is aimed at discovering relevant SMEs support tools focused on increasing the added value. The research is based on content and comparative analysis of the European Union and China experience using the material from the European Commission reports, national programs of European countries and China. The research terminology and analysis algorithm were refined. The set of new tools of SMEs support is presented in the context of groups and national characteristics. In European countries non-financial tools dominate among state support forms. They include creating special niches for small enterprises in the global value chain and giving SMEs access to the national supply base. In China non-state support forms dominate with a larger share of financial tools, including the provision of resources by participants of the value chains within regional integration associations, by financial units of large companies. The research results are addressed to the representatives of SMEs, large companies, public authorities.

The Potential Role of PPPs in Developing a Sustainable SME Sector in Developing Countries: A South African Experience

The introduction of Public-private Partnerships (PPPs) in infrastructure provision has changed the way in which governments around the world now view infrastructure provision. However, the introduction of PPPs to deliver infrastructure has not benefited the broader public. Although SMEs are important for employment creation, inequality and poverty reduction, the participation of SMEs (small and medium enterprises) in PPP projects is very low in developing countries. This is because PPP models in developing countries are developed based on those used in developed economies, and such models ignore the socioeconomic realities facing developing countries. The objective of this study is therefore to demonstrate that PPP projects in developing countries present an opportunity for growing the SME sector and create the needed jobs and contribute to poverty alleviation. The study has found that PPP projects have the potential to develop a sustainable SME sector, as it has found that SMEs do participate in PPP projects; however, their participation is curtailed by a number of challenges such as: lack of access to finance, limited human resources, low technological capabilities, and lack of access to markets. It also found that linking SMEs to PPP projects may address some of these challenges to a certain extent, especially if SMEs provide services to PPP projects during both the implementation and the operational phases of PPP projects. It also found that PPPs have not yet been identified by the South African government as one of the initiatives that can facilitate SME development. Most focus on PPP projects is only on ensuring that they include ownership by previously disadvantaged South Africans. The study recommends that a policy be developed that will incentivise PPP firms to use SMEs in their projects and penalise those PPP firms that fail to comply with the policy imperatives. It went on and found that the different South African government institutional initiatives or frameworks to support SMEs seem to be adequate; however, what is needed is a cohesive approach that links all these initiatives together and ensures that they support one another.

The Potential Role of PPPs in Developing a Sustainable SME Sector in Developing Countries: A South African Experience

The introduction of Public-private Partnerships (PPPs) in infrastructure provision has changed the way in which governments around the world now view infrastructure provision. However, the introduction of PPPs to deliver infrastructure has not benefited the broader public. Although SMEs are important for employment creation, inequality and poverty reduction, the participation of SMEs (small and medium enterprises) in PPP projects is very low in developing countries. This is because PPP models in developing countries are developed based on those used in developed economies, and such models ignore the socioeconomic realities facing developing countries. The objective of this study is therefore to demonstrate that PPP projects in developing countries present an opportunity for growing the SME sector and create the needed jobs and contribute to poverty alleviation. The study has found that PPP projects have the potential to develop a sustainable SME sector, as it has found that SMEs do participate in PPP projects; however, their participation is curtailed by a number of challenges such as: lack of access to finance, limited human resources, low technological capabilities, and lack of access to markets. It also found that linking SMEs to PPP projects may address some of these challenges to a certain extent, especially if SMEs provide services to PPP projects during both the implementation and the operational phases of PPP projects. It also found that PPPs have not yet been identified by the South African government as one of the initiatives that can facilitate SME development. Most focus on PPP projects is only on ensuring that they include ownership by previously disadvantaged South Africans. The study recommends that a policy be developed that will incentivise PPP firms to use SMEs in their projects and penalise those PPP firms that fail to comply with the policy imperatives. It went on and found that the different South African government institutional initiatives or frameworks to support SMEs seem to be adequate; however, what is needed is a cohesive approach that links all these initiatives together and ensures that they support one another.

Innovation Leaders, Modest Innovators and Non-innovative SMEs in Slovakia: Key Factors and Barriers of Innovation Activity

AbstractBackground and Purpose:The field of innovation represents for small and medium enterprises (SMEs) a fundamental challenge. If the number of innovative SMEs is to rise, it is necessary to identify key factors determining their innovation activity and eliminate the innovation barriers. The main purpose of the paper is to present the results of primary research focused on identification (evaluation) of key factors and barriers determining innovation activities in Slovak SMEs. The division of SMEs into three groups of enterprises: innovation leaders, modest innovators and non-innovators enables to identify the differences in managers’ perception of the main factors and barriers determining innovation activities in various types of SMEs and to formulate policy implications for Slovak SMEs.Design/Methodology/Approach:Results of the empirical research were processed using MS Excel and the statistical analysis of the data in R3.2.4. statistical system was done. For statistical tests we assumed significance level (α = 0.1).Results:Evaluating the importance of the key factors a majority of enterprises (64.71%) indicated financial resources as the most important factor for the innovations. There is no statistically significant difference in individual (analysed) factors between innovation leaders, non-innovators and innovation followers (modest innovators). The results gained from Fisher exact test (p-value = 0.11) indicated a small difference in evaluating the significance of individual barriers between innovation leaders, non-innovators and modest innovators. Majority of enterprises also see as the main barriers to develop innovation activities bureaucracy and corruption and inappropriate state support of innovation activities.Conclusion:The main implications (conclusion) coming from the research are basic recommendations for state policy makers as well as SME’s managers to foster innovation activities in enterprises. They refer to the areas of financial resources, high-quality human resources, cooperation and participation of SMEs in different networks and clusters, systematic institutional support to SMEs, well-created vision and clearly formulated aims, and willingness of enterprises to innovate. Recommendations are summarised following the results of factor’s and barrier’s evaluation.

Public procurement policy for small and medium enterprises in developing countries

PurposeIncreasing the share of small and medium enterprises (SMEs) in public procurement through targeted support policies is often fraught with organisational and institutional challenges as can be seen from the experiences of many developed countries. This has profound implications for emulating such policies in developing countries where administrative capacities may be low for efficient policy management. The purpose of this paper is to widen the canvass of SME procurement policy discourse by exploring a developing country context.Design/methodology/approachThe study provides qualitative assessment using insights from policy implementation-related theories. Due to limited reporting of target data on SME participation in India, the study conducts analysis based on key informant interviews with 20 public sector enterprises.FindingsThe evidence drawn from India mainly shows uneven performance among the procurers in achieving the SME procurement targets, and reveals serious policy implementation shortcomings. These findings correspond and complement the earlier studies on SME procurement in the developed world. The Indian case additionally reveals barriers which may be common to other developing countries such as the lack of policy-administrative capacity compounded by the prevalence of “efficiency syndrome” on the part of procurers.Originality/valueBy providing an in-depth developing country-specific assessment, the study helps informing assumptions underpinning SME-oriented procurement policies. The study, therefore, fills a gap in the literature on SME-oriented public procurement policy-making and its execution.

Sustainability, Public Procurement and SMEs Challenges and Opportunities

The global value of public procurement spending is enormous. Each year, approximately 19% of the EU GDP is spent by over 250,000 public authorities purchasing services, works and supplies. The sheer scale of public procurement spending and supplier selection decisions can literally create and shape the market, impacting the lives of citizens across countries and regions at large. Over the last decade public procurement experienced wide spread modernization across the globe, both including local and international levels. These days, public procurement is no longer just about buying the cheapest possible supplies or services but, rather, it is understood as a process whereby organizations meet their needs in a way that achieves value for money on a lifetime basis and delivers aspects beyond savings. This includes doing business responsibly, taking a leadership position in the community and ensuring promotion of Small and Medium Enterprises (SMEs) in public procurement. SMEs are considered the backbone of the European economy as they represent around 99,8 percent of all enterprises and produce more than a half of the European GDP. Thus, if more SMEs participate in public procurement, the competition will increase and, consequently, governments will be able to achieve better value for money in their contracts. Also, it has been argued that most innovations originated from small entrepreneurial firms which support the sustainability agenda. The main claim of this article is that sustainability and the promotion of SMEs participation in public procurement do not necessarily contradict each other. It is without doubt that SMEs participation in the procurement context encompasses a number of challenges. To the latter may be accounted the argument that SMEs are too small, have too little money, experience or technical capabilities to participate in public procurement. Yet, it is argued that revised procurement law has the potential to solve some of the challenges and there is still considerable scope for promoting opportunities for SMEs such as reliance on the capabilities of third parties, bidding in form of consortia or subcontracting, the possibility to influence contract specification, and reserved contracts.

Determinant of Small and Medium Enterprises (SMEs) Low Participation in Public Procurement in Lagos, Nigeria

It is an established fact that Small and Medium Enterprises (SMEs) are crucial to economic development of any nation. SMEs participation in every sphere of economic activities including public procurement is one of the ways the sector can promote economic development of the country. However, SMEs sometimes are usually reluctant to sell to government. This study identified and classified into eight themes factors responsible for the low participation of SMEs in public procurement in Lagos Nigeria. Data were collected with questionnaires from 193 SMEs Chief executives. Data generated were analyzed using ranking method. The study revealed that perceived lack of transparency in public procurement proceedings, disproportionate eligibilty criteria and burdensome nature of public procurement are the major reasons SMEs are reluctant to participate in public procurement in Lagos, Nigeria. It was concluded that transparency is vital in public procurement for SMEs to adequately participate in the process. The study recommended that in order to boost SMEs participation in public procurement transparent procurement management must be guaranteed.

SME access to public procurement: An analysis of the experiences of SMEs supplying the publicly funded UK heritage sector

Previous research examining the relationship between small suppliers and public sector procurers has tended to portray small and medium enterprises (SMEs) as being homogeneous. However, there have been calls for further study of the SME population, in relation to public procurement, in recognition of its diverse nature. This paper contributes to the debate by exploring the experiences of SMEs supplying traditional building skills to the publicly funded UK heritage sector. Our analysis demonstrates that the heritage sector has distinct characteristics which affect the public procurement of traditional building skills. Specifically, the uncertain nature of the work and the key role of the architect demand a specialist input from the public sector procurer. Other experiences compare with those reported across the broader SME population, including the preference to supply directly rather than subcontract, the reluctance to form consortia and the benefit of demonstrating a track record. We argue that this evidence of distinctiveness within the heritage sector suggests that policymakers and practitioners need a greater understanding of the requirements of SME suppliers in different sectors. Attempts to improve participation and success of SMEs in the public procurement process require that consideration is given to the need for a distinct, sector-driven, remedy.

Does Finance Really Matter for the Participation of SMEs in International Trade? Evidence from 8,080 East Asian Firms

This paper studies factors associated with firm participation in export markets, focusing primarily on firm size and access to credit, based on a survey sample comprising observations of 8,080 small and medium enterprises (SMEs) (with fewer than 100 employees) and non-SME firms in developing East Asian countries across sectors. The main findings suggest the interdependent relationships between export participation, firm size, and access to credit. SMEs participating in export markets tend to gain more access to credit, while potential scale economies (firm sizes) of SMEs are positively associated with participation in export markets. The estimation results also point to the supportive influences of foreign ownership, worker education, and production certification on export participation, and the positive effects of financial certification, managerial experience, and collateral/loan value on access to credit for SMEs.

Evaluation of Czech SME participation in the FP7 in the period October 2007 – October 2011

Small and medium enterprises (SMEs) in the CR have the opportunity to use grants of many national and European funds and programmes to support their research and other activities. One of the important resources for the implementation of SMEs research and development activities is FP7. The article based on statistical data of E-CORDA database (database of FP7 grants) for the period 2007 to 2011 briefl y summarizes the participation of Czech SMEs in the FP7, compares the SMEs participation share and SMEs received fi nancial support share in terms of regions of the CR and EU countries referring to participation and obtained fi nancial support of other FP7 participants. The contribution analyses Czech SMEs participation in FP7 thematic priorities, presents the regional scope of SMEs in FP7 in the CR and compares the participation and fi nancial success rate of SMEs from the CR with the success rate of SMEs from other EU countries. Essential attention is given to the use of specifi c tools for SMEs in “Research for the Benefi t of SMEs“ Priority in Capacities Specifi c Programme, further to the national project preparation support infrastructure and to the barriers of the Czech SMEs participation in FP7.

Engaging Small and Medium Enterprises in Production Networks: Firm-Level Analysis of Five ASEAN Economies

The Association of Southeast Asian Nations (ASEAN) small and medium enterprises (SMEs) are under scrutiny for their engagement in production networks following recent emphasis on increasing intra-regional trade, rebalancing, and inclusive growth in Asia. Using a data set covering 5,900 firms in five ASEAN economies at different stages of development, this paper analyses the participation of SMEs in production networks, determinants, and policy implications. It finds that although large firms dominate production network engagement in ASEAN economies, there are signs that SMEs have modestly increased their participation since the late-1990s. This is linked to firm-specific factors (e.g., firm size, foreign ownership, skills, technological capabilities, and access to credit) as well as a supportive business environment. Tackling residual supply-side and policy constraints can further the participation of ASEAN SMEs in production networks.

Can E‐Marketplaces Bridge the Digital Divide? An Analysis of Two Western Australian Cases

AbstractIn Australia, small and medium enterprises (SMEs), particularly rural SMEs, are perceived as being on the wrong side of the digital divide. Government at local and state levels has taken a leading role in the development of electronic marketplaces with an aim of improving SME participation. Many government departments now either own or sponsor electronic marketplaces. The aims of government agencies in creating e‐marketplaces are often motivated by regional economic development issues. Whilst government entities may think e‐marketplaces are an effective channel for implementing government policy, a number of complications can arise from this model. Despite the community development motivation, a major argument for e‐marketplace development being put forward is the economic one and this has contributed to a narrow view of the e‐marketplace concept and one, which for the time being at least, is likely to restrict its impact. Government sponsored e‐marketplaces should consider the value of on‐line business networks to share knowledge and potentially increase levels of innovation. The findings have implications for government sponsored e‐marketplace initiatives around the world.