Authors :
Abrehet Mehari, Addis Ababa, Rovshan Guliev
Volume/Issue :
Volume 5 - 2020, Issue 2 - February
Google Scholar :
https://goo.gl/DF9R4u
Scribd :
https://bit.ly/32ORw50
Abstract :
Economic integration has increased
recognition by regional governments through its
potential for a substantial increase in the participation
of small and medium enterprise in the generation of
regional income, employment, exports, investment,
economic growth and competitiveness (OECD,2018).
The purpose of this paper is reviewing the economic
integration of SMEs in manufacturing sector in Tigray
Regional State Mekele City based on empirical evidence
and current research on SMEs worldwide with a major
focus on Ethiopian SMEs and how to improve their
operations. It was assessing the impact of enabling
environment on SMEs operation in order to become
integrated and competitive in the national market. The
process of economic integration has opened an
opportunities and increased pressure for SMEs to
expand their value and form partnership and strategic
alliance with local and foreign organizations to facilitate
production and distribution of their products in the
global market. It removes the economic barrier such as
finance and human capital among one or more
economies to share and mutually exchange the common
resources effectively through the back and forward
linkage in the manufacturing sector. However,
competitiveness of SMEs in the study area is determined
by access to finance, the capacity of human capital in
theory and practice, quality products demanded by
consumer, competition among SMEs, supporting
facilities provided by the stakeholders, and motivational
system provided by government (tax and subsidies).In
addition weak enabling business environment
(legislation, policies, regulations, and support
institutions) are the key factor on the development of
the SMEs in in Tigray regional state Mekelle City. The
researcher concluded that competitiveness and enabling
environment are the main challenges of SMEs
operation. Thus, the government should amend rule and
regulation to make clear and simple and enhance the
capacity of SMEs to penetrate in the local and global
market. The Regional governments also should be
developed policies and strategies favorable to SMEs
development and put them in their development
agenda.
Keywords :
Economic Integration, Competitiveness, Enabling Environments.
Economic integration has increased
recognition by regional governments through its
potential for a substantial increase in the participation
of small and medium enterprise in the generation of
regional income, employment, exports, investment,
economic growth and competitiveness (OECD,2018).
The purpose of this paper is reviewing the economic
integration of SMEs in manufacturing sector in Tigray
Regional State Mekele City based on empirical evidence
and current research on SMEs worldwide with a major
focus on Ethiopian SMEs and how to improve their
operations. It was assessing the impact of enabling
environment on SMEs operation in order to become
integrated and competitive in the national market. The
process of economic integration has opened an
opportunities and increased pressure for SMEs to
expand their value and form partnership and strategic
alliance with local and foreign organizations to facilitate
production and distribution of their products in the
global market. It removes the economic barrier such as
finance and human capital among one or more
economies to share and mutually exchange the common
resources effectively through the back and forward
linkage in the manufacturing sector. However,
competitiveness of SMEs in the study area is determined
by access to finance, the capacity of human capital in
theory and practice, quality products demanded by
consumer, competition among SMEs, supporting
facilities provided by the stakeholders, and motivational
system provided by government (tax and subsidies).In
addition weak enabling business environment
(legislation, policies, regulations, and support
institutions) are the key factor on the development of
the SMEs in in Tigray regional state Mekelle City. The
researcher concluded that competitiveness and enabling
environment are the main challenges of SMEs
operation. Thus, the government should amend rule and
regulation to make clear and simple and enhance the
capacity of SMEs to penetrate in the local and global
market. The Regional governments also should be
developed policies and strategies favorable to SMEs
development and put them in their development
agenda.
Keywords :
Economic Integration, Competitiveness, Enabling Environments.
