Carol Rehtmeyer of TX is a business professional with vast experience in non-profit leadership, fundraising, and organizational growth and development. In the following article, Carol Rehtmeyer discusses strategies to propel growth in both small and medium sized business ventures.
Economies are suffering from sluggish productivity growth, implicating citizens’ well-being, income, inequality, and loan repayment challenges. And unfortunately, Carol Rehtmeyer of TX explains that small-to-medium-sized enterprises (SMEs) are part of the problem. A huge productivity gap between large corporations and SMEs exists; closing said gap is essential for the continued growth of the economy.
Despite public perception, small- and medium-sized businesses can spur countrywide growth for two crucial reasons — utilizing proven technologies is safer and faster than testing new ones and start-ups are a significant source of innovation.
Carol Rehtmeyer of TX says that by halving the worldwide productivity gap between large companies and SMEs would add roughly $15 trillion in value (approximately 7% of GDP). And there are ways for governments and other entities to help small- and medium-sized businesses manage growth and ensure an exponentially expanding economy.
Prioritizing the Right SME Segments
According to McKinsey, SMEs tend to fall into one of six categories. While aiding all would be ideal, SME-development bodies have limited resources, so targeting high-priority subsegments is crucial.
Rehtmeyer says that the six SME categories and their greatest needs include:
- Early-stage innovative start-ups — Service accessibility and educational ecosystems focused on entrepreneurship
- Established successful start-ups — Established processes (e.g., delivery, supply chains, marketing strategies), access to managerial staff, and financing
- Growing medium-sized businesses — Tactical business support
- Stagnant/struggling medium-sized companies — Support to turn things around, avoiding bankruptcy, and dispute-resolution aid or emergency loans
- Locally focused small businesses— Increase demand and credit accessibility
- Informal microbusinesses — Formal lending and support for workers
Supporting Small- and Medium-Sized Businesses as They Grow
Carol Rehtmeyer of TX explains that NGOs and government agencies that understand SME categories should tailor their offerings to fulfill currently unmet needs. From entrepreneurial education to start-up hubs to GVCFs to scale-up programs, small- and medium-sized companies have increased resources to help them manage organizational growth.
Entrepreneurial Education Proves Vital
The survival rates of start-ups require entrepreneurs with the skills and capabilities necessary to make it work. But fear of failure, risk aversion, and lack of abilities appear to be considerable barriers largely overlooked by institutional support according to Carol Rehtmeyer of TX.
However, some governments around the world have begun making the mind of an entrepreneur a priority, enticing capability growth through formal education. In fact, reports show that entrepreneurship elements are taught in elementary schools around Europe.
Such education is thought to increase equity, with many organizations focused on developing entrepreneurial outlooks in residents of low-income neighborhoods.
Start-Up Hubs for Bolstering from The Get-Go
Carol Rehtmeyer says that start-up hubs, famed for their innovative cultures and access to financing, are becoming a top choice environment for many entrepreneurs across the globe, so much so that governments are prioritizing turning certain cities into start-up hubs through branding or supporting related campuses.
A close-knit support community like this enables SMEs to garner the help they need to navigate administrative requirements, find competencies necessary for a flourishing business, and ensure they can afford daily operations.
Government-Led Scale-Up Programs Become Commonplace for Managing SME Growth
Dedicated to helping medium-sized businesses expand, scale-up programs help companies unlock their full potential and fuel rapid growth.
Depending on the specific program, Carol Rehtmeyer of TX says that medium-sized businesses can acquire support, financing, consulting, mentorship, and even networking opportunities. Some provide predefined services for a less generalized approach, targeting companies from specific subsegments.
Government Venture-Capital Funds Spark Renewed Support for Boosted Economies
Government venture-capital funds or GVCFs appeared after World War II in Europe. So, they aren’t new to the playing field. However, McKinsey analysts note the importance of these money pots for helping SMEs cope with organizational growth.
These days, governments in high-income countries are beginning to recognize the importance of the start-up sector, aiming to boost locales’ innovations and reinvigorate economic impact through VCs.
Experts report that the most successful GVCFs attract investors from the private sector, who were previously disinterested due to the government’s typical leverage and fund access.
Helping SMEs Adopt AI to Fuel Growth
Carol Rehtmeyer reports that some countries will experience productivity growth from digital adoption of around 1.2% per year. As such, artificial intelligence and digital usage are the main contributors to productivity scalability overall.
But SMEs have a challenging time implementing the technology due to limited awareness, talent, and capital.
Thankfully, governments are set to change this issue by expanding productivity schemes toward digital adoption and increased artificial intelligence usage.