To build stronger, resilient MSMEs, we must uphold highest standards
SME Support Centre Director Daniel Ouma, Kepsa Director for Gender and SMEs Eva Muraya, KNCCI COO Patrick Nyangweso, the centre CEO, Linda Onyango, and international resource mobilisation consultant Juliette Page at the SME Blue Pages launch in Nairobi recently.
Micro, small and medium enterprises (MSMEs) form a paramount feature of the economic landscape in any developing country.
Their uncountable contributions, from creation of jobs to the alleviation of poverty, just to mention a few, have been granted prominence in development master plans and strategic plans of various economies.
The indispensable role of MSMEs has always taken the centre stage in the development of the nation’s backward and rural areas, reducing development imbalances and assuring more equitable distribution of national income and wealth. They are complementary in their importance to large industries as additional units, contributing enormously to the nation’s socioeconomic development.
More than 95 per cent of all enterprises are small- to medium-sized and many countries look up to MSMEs for subsistence. In Kenya, they represent 98 per cent of all businesses, support 88 per cent of the population, contribute 40 per cent of gross domestic product (GDP) and create 80 per cent of the new jobs yearly. Some 18 per cent of the working age population is employed in MSMEs, and with 80 per cent in terms of the number of people engaged in MSMEs activities per 1,000 persons, or the employment density.
Strong foundation
Understanding the unique features and dynamics of change in the MSME domain is critical in helping them to identify and comprehend the current needs so that they can gain the envisaged strong foundation and thrust to deliver the anticipated outcome in the ever-dynamic times of the Fourth Industrial Revolution and beyond. Key features include understanding the growth processes; requirements and processes for sustainability, available technologies; transition challenges; and opportunities to large self-sustaining, profitable, registered large-scale firms.
In Kenya, MSME survival and growth is usually up to two years after start-up and is driven by many determinants—such as location, age of the entrepreneur, regulatory requirements, quality of the human capital and the nature of the operations. They are particularly vulnerable during the fragile formative initial years, when learning how to operate.
Fundamental characteristic
Self-employment describes in operational terms the fundamental characteristic of MSMEs world. They are customarily small in size and often consist of one person working alone. That would describe a firm with 1-50 workers, and the larger end of the tail—those firms with 10 or more workers—constituting two per cent of the business across Africa.
Standards, in their classical and functional definition, provide requirements, conditions, designs and practices, all which ensure that the outcome of a product is fit for the intended purpose. Many MSME products have compliance challenges; so, a direct approach of developing and propagating sector-based standards to cover all the innovative products and services could promote market access and acceptance.
Standards provide a common language that is understandable everywhere, thus a common transactional identity and model other than monetary value for bases of product and service exchange.
International standards need to assist MSMEs just as much as they do global large-scale enterprises, governments and society. In particular, MSMEs should be able to share in the gains in efficiency and effectiveness offered by ISO 9001:2015—Quality Management System—requirements, among others.
The enterprises can then establish an auditable framework for continual improvement and customer satisfaction. It further helps in transferring good managerial practices and encouraging the improvement of services.
Applied in products and services, standards help to ensure total compliance to regulatory requirements at a lower and reduced costs in all aspects of the business.
They foster a culture of constant innovation and creativity in product and service development and products’ life cycle and help to build a stronger and more resilient and sustainable MSME business to safeguard national interests.
Dr Karau is the director of quality assurance and inspection at Kenya Bureau of Standards (Kebs). [email protected].
