Ethiopian Future By Hakim Abebech

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Value chain analysis, spearheaded by institutionalised supports to SMEs, takes priority. The underlying significance of this is hinged on augmenting production efficiency and effectiveness by enhancing values created and minimising costs generated in the process of producing final outputs. That constitutes the very foundation of market competitiveness both domestically and externally.

Unrelenting drive for the formation of SME clusters is without choice to gain collective strength and financial capacity for input acquisition, cost-sharing, experiential exchanges and organised voice.

The issues of promoting import-substituting products by SMEs and effecting infant industry protection are commonly shared views and soundly gainful for aspiring SMEs. The clarion call here is to make such SMEs efficient, effective and competitive to penetrate markets and retain them. The choice cannot be protecting inefficiency or substituting import by-products of lower use-value or quality.

The issues discussed above regarding developed human capacity as a force for increased factor productivity, adaption and productive use of technology and regular conduct of value chain analysis for process efficiency and high-value outputs take precedence.

Last but not least is instituting industrial policies of two types to influence the desired direction of SMEs and their contributions to development to increase.

One line of policy should focus on enforcing the vital concept and practice of adding value to the raw resources of nations, supported by technological inputs and entrepreneurial talents. Another policy measure should target sectors and agencies, supporting the initiation or start-up of SMEs, to commit themselves to coordinated, complementary and collective drive for cost-effective promotion of the SMEs.

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