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Government Policy and SMEs’ Capacity in Coping with Trade Liberalisation

Government Policy and SMEs’ Capacity in Coping with Trade Liberalisation. Professor David Deakins. APEC Symposium, Taipei , 16-17 August 2011. Background. Trade liberalisation brings increased competition, increased threats, but increased opportunities.

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Government Policy and SMEs’ Capacity in Coping with Trade Liberalisation

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  1. Government Policy and SMEs’ Capacity in Coping with Trade Liberalisation Professor David Deakins APEC Symposium, Taipei, 16-17 August 2011

  2. Background • Trade liberalisation brings increased competition, increased threats, but increased opportunities • Schumpeterian dynamic framework of ‘creative’ destruction from forces of globalisation and trade liberalisation • Implications for SME capacity include that: • SMEs have the capability to learn • SMEs have capacity to engage in management development activities • SMEs have innovative capabilities • SMEs have capability to manage change.

  3. Government Policy and SMEs • Guiding principles: • Policy and programmes must be relevant and timely for SMEs • SMES capacity will be driven by both owner-manager abilities and the firm’s resource capacity • Resource capacity affected by access to: technological, financial, human and social resources

  4. Factors that Influence SMEs’ Capability • Evidence: • Draw on selective evidence from two research programmes undertaken by the New Zealand SME Research Centre • Project 1: SMEs’ Management Development and Management Learning • Project 2: SMEs’ Capability to Manage Regulation

  5. SME Sources of Learning Selective evidence from project 1 on three sources of learning: Practice-based: learning from day-to-day activities and may include informal learning Proximal: untapped and latent potential from existing management development activities to solve management problems (using previous experience and trusted advisers) Distal: learning from sources external to the firm; both informal and formal

  6. 2009 BusinesSMEasure Survey: Participation in Building Managerial Capability Extent of management development in the last 12 months (2008-09 Percent)

  7. Implications and Analysis Recognition of the importance of sources of learning for management development, but relatively low rates of participation in activity Analysis revealed that the key drivers of participation in management development were SME owner-managers: - belief in self-improvement - learning orientation

  8. SME Owner-Manager and Determinants of Participation in Management Development

  9. Factors Influencing SME Capability - 1 Selective evidence from project 2 on capability to manage regulation: • Resource capacity: not just size of the business, varies along different dimensions, different sectors • Systems and processes: well established allow for adaptation to changes in regulation, related to general management practices • Use of technology: including accounting software; on-line systems, affected by perceptions of costs v benefits • Owner-manager ability and experience; previous business experience; learning orientation; access to mentors

  10. Factors Influencing Capability - 2 • Sources of learning about regulation: access to information and advice • :- important role of trade associations and/or other member associations • :- role of professional advisers, accountants & lawyers • :- Government departments, websites and hotlines • :- trusted business owners (peer groups) • :- media • Level of engagement with sources of learning, information and advice

  11. Factors Influencing Capability – 3 • Capability to translate information into practice (influenced by) • :- access to a range of different sources • :- well embedded in network of trusted advisers • :- positive learning orientation • :- proactivity in industry • :- internal systems & communication • Attitudes to regulation

  12. SME Capacity and Trade Liberalisation: Regulatory systems framework Dynamic interaction

  13. Government Policy to Enhance SME Capacity- Implications -1 We need to understand regulatory system and effect of trade liberalisation on business environment Map areas where interventions can be made in dynamic regulatory systems Capacity, influenced by both attitudes and, hence, approaches to learning and resource capacity

  14. Government Policy to Enhance SME Capacity- Implications -2 Management capacity influenced by availability and accessibility of sources of learning Dynamic interaction of experience, learning and capability Improvements in technology can be important for systems and processes—education role

  15. Government Policy, SME Capacity and Trade Liberalisation Thank you for listening E-mail: d.deakins@massey.ac.nz Web: http://sme-centre.massey.ac.nz

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