Utilization of The Buyer-led Approach to Suggest a Mechanism for Increasing The Competitiveness of Startups and Smes in The Mena Region

The term buyer LED approach is for Local Economy Development. Every geographical area establishes its economic identity through a combination of production systems, human and natural resources, infrastructure, labour markets, entrepreneurial potential and political and socio-cultural systems. These characteristics define and sustain the process of local economic development. Over the past decade, it has increasingly been recognized that state-driven, top-down development policies are failing to foster balanced growth in national economies. As the pace of socio-economic change quickens and local actors become more exposed to global events beyond their control, some local economies have proved more adept at repositioning themselves within global markets than others. Organisational Structure Model

The ways in which a LED based organisations is structured internally, their decision making process, their relations with other local institutions and authorities at the same level or with higher level organizations, the incentives or sanctions that tie members to the organization, the composition of membership could all be expected to have some influence on the performance of such organizational tasks, such as planning and goal setting, resource mobilization etc. Therefore, it is very difficult to present here a standard model on the organizational structure of any business. I suggest the SME’s of the MENA region to follow the below structure for better and quick goal setting results.

Competitiveness in the small or medium sized market will only take place when the number of business organisations will increase rapidly. Several policies have been taken in the past and might a lot more going to take place in near future. Looking at those policies and understanding the MENA region I have suggested below an policy including all the major players which actually plays a vital role in all the business models.

Policy Suggestion for SME competitiveness

I suggest that the government and the non-government organisations along with the International organisations like EU and others has their own role to play to develop competitiveness in the SME’s.

Government’s Approach:

• Simplification of trade policies and procedures.
• Combating of corruption that hinder the growth potential of SMEs.
• Creation or reform of administrative and legal institutions in order to guarantee SMEs a stable legal framework in which to operate, and to facilitate an anti-monopolistic and competitive business environment
• Delivery of an appropriate public infrastructure, especially in transportation, power, telecommunications and other infrastructure needed to enable domestic and external trade.
• The government banks must develop a policy framework for channelling adequate funds to exporting SMEs. This may include: providing credits directly from state owned banks to SMEs; provide loans to SMEs.

Non-Government organisation approach

• Private organisations should provide SMEs with various forms of marketing assistance and facilitate access to market and product information.
• SMEs can be helped with the trade documentation, insurance and credit handling needed to run their business successfully
• Companies may even consider investing in a promising SME for the sake of diversifying their own activities and/or producing locally depending upon the potential of the idea.
• Business associations must ensure that SMEs must be an active participant in business associations, chambers of commerce and employers’ unions forum.

International Community approach

• Promotion of local SMEs’ into global chains of production
• Protecting SME’s selectively from fierce global competition many various methodologies.
• Ensuring in facilitating SMEs’ access to finance and helping out with financial models to ensure stability of any SME mostly in its initial period.

As mentioned in the case, “This futuristic vision cannot be controlled by one sector, one country or one region because the economy is of national security importance to all nations. Together we can increase global trade by combining the expertise of the High Income Countries (15%) with the labor force youth of the Mid Income Countries (45%) and Low Income Countries (40%)”. Assuming that countries of different income and development levels should work together, design a ‘Governance Model’ that can achieve the intended Digitalization objectives while offsetting geopolitical and monopolistic concerns of those countries.