In conclusion, the impacts of clustering in the Ecuadorian SMEs will benefit them since as in other Latin American countries, clusters provide SMEs with the capability to enhance their efficiency and efficacy allowing them to achieve a higher productivity. Because of that, companies become more profitable, that at the end of the day is what private companies are pursuing. In addition, when companies are productive, the overall national productivity and the income to the country increases improving people capability to improve their living standards.
Through clustering, SMEs are able to overcome the main problems they face. SMEs will be able to be part of a network whose one of its objectives will be achieving radical and incremental innovation, firms will benefit from the imagination, knowledge, expertise and resources from a whole network of actors and not only from theirs. The development of associations supports SMEs to overcome their difficulties, letting them to reach economies of scale, and market access. Furthermore, clusters foster the generation of new businesses, entrepreneurs are more confident to start new businesses related to clusters in order to benefit from the existing competitive advantages. Companies that born near clusters are most likely to survive that the others created outside them. These new companies will fill the blanks that other companies have.
Moreover, it is possible to reproduce the yields in other Latin American countries in Ecuador, the existing potential clusters are able to achieve all the benefits of the conglomeration and foster the country development. Nevertheless, it requires all the actors to work in a systemic way, approaching the Micro, Meso, Macro and Meta levels of competitiveness:
Mic...
... middle of paper ...
...r, to be able to share their information and not fearing to problems related to uncontrolled copy of their processes.
Meta level.- And certainly the most difficult level that should be changed in order to form and develop clusters is the mind of the people. Ecuadorians need to be proud of the products manufactured in the country, support local companies, demand better products and services in order to foster the companies to work in order to fulfill the demands of an exigent market. People and companies need to work in a long term conditions to able to formulate visions and strategies
At the end, the challenge of the country relies in the capability of all actors to communicate and trust each other, when the actors are able to communicate the conditions which are necessary for cluster to develop and consequently engage economic development will be possible to reach.
In conclusion, policy makers and practitioners often try to assist in the formation of new firms but do not always succeed. Many firms fail despite all the assistance however the important factor is that the government continues to promote their creation so that new jobs and industries can be created. (Storey 1994) Both policy makers and practitioners need to ensure a level playing field so that the economy can grow, develop and compete with other economies around the world.
Germany has the largest economy in Europe and the fifth largest in the world. Germany is known for its high quality machinery, vehicles, chemicals and household equipment that form the bulk of its exports. Its vast manufacturing industry has thrived as a result of the existence of a large pool of highly skilled labor force. The country boasts of the world’s most advanced networks in energy, roads, aviation, telecommunications, rail and roads. The German economy is dominated by small and medium-sized enterprises that provide employment to 70 percent of the country’s labor force. While SMEs in the rest of the world are too small to enjoy the economies of scale or even access the international market, Germa...
The Companies in Latin America that have expanded throughout the region and into the global scene have been analyzed and celebrated in regional press for long time by now. Think of Telmex, the Mexican giant of communications, Falabella the Chilean retailer, Cemex the massive cement producer of Mexico or even Embraer, the world known Brazilian aircraft manufacturer.
“ Ecuador Business > Economic Overview & History,” Ecuador Explorer, http://www.ecuadorexplorer.com/html/business_in_ecuador.html, vie we d on 18 November 2004.
After the fall of the ISI standard, many questions began to arise in regards to how Latin American countries should move forward in its development, improve growth, and create jobs. From around the 1930s until the 1980s after many Latin American countries became independent, they wanted to have economic success and become somewhat economically independent and self-sustaining. Initially these countries thought that the best way to move forward with was Import Substitution Industrialization (ISI). However, when the 1980s came around these counties realized that ISI was not the best policy for the economy or the future. ISI lead inefficient industries because they were not exposed to international competition, the focus was not on the rural sector and lead to impoverishing the local producers, and the extreme protectionist ideals did more harm than good. The issue that has to be resolved as Latin America moves forward pertains to unemployment and the job market; many countries are trying to fix the issues that surround the job market and define who are the people that actually have jobs so that those that do not can learn what they need to in order to become employed.
Chile is a country that is developing very quickly and therefore is in demand when exporting the goods that are produced here are taken into account. All of the factors presented have the same developing relationship. The increase in skills, knowledge, communication, and population are what make this economy grow.
...estinations. This has lead to heavily invested regions of Yucatan which has brought many name brand name stores and restaurant chains.
According to Michael E. Porter (2000), Clusters are geographical concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (e.g. universities, standard agencies, and trade associations) in a particular field that compete but also cooperate. Its geographical concentration goes from one state, a single city or nearby and neighboring countries. As expected, clusters with more sophisticated and higher levels of competitive development are found in industrialized countries. In each of these countries, it is possible to find clusters that reached world leadership in the industries to which they belong; such as, the insulin cluster of Denmark, the flowers in Netherlands, the cork of Portugal and footwear, clothing and high fashion...
Sternberg, R. and Kiese, M. and Stockinger, D. (2008) ‘Cluster policies in the US and Germany: varieties of capitalism perspective on two high-tech states’ Environment and Planning C: Government and Policy 2010, 28, pp.1063-1082
In efforts to encourage the cultivation of coffee, FNC has been giving the farmers subsidies in response to changes in the international coffee markets. More so, FNC provides the farmers social services and other infrastructure in areas where coffee is grown in large scale. These services are provided after the farmers are taxed proportionally upon the international prices reaching the ceiling. There are about 600,000 coffee farms across Colombia, and they play significant role rural development because Colombia is regarded as the second largest coffee producing country across the globe. Through coffee production, the road, rail, and ports, along with other infrastructure have been developed. These have contributed to economic development because of increased mobility of factors of production. Foreign exchanged earned from coffee exports is back rolled to fund the building of hospitals, rural clinics, referral hospitals, and dispensaries (Thurston, Morris & Steiman, 2013). More so, the revenue is used in the development of other industries. Unlike other Latin America economies where there is coffee, sugarcane, and banana plantation farming, small-scale farmers mainly practice coffee farming in Colombia (Skidmore, Smith & Green, 2014). Socio-cultural development is evident through the foundation of numerous cooperative societies where farmers form unions to enhance their bargaining
In conclusion, a precise and more appropriate definition that reflects the size, the nature and needs of SMEs is essential and advantageous not only for a particular SME itself, but also for policy makers and supporting agencies in planning and nurturing the proper growth and development of the SMEs sector in Malaysia as a whole.
It is becoming increasingly apparent to governments and policy makers that the role of small and medium enterprises “SMEs” is crucial to the development and growth of any economy. SMEs are now widely known as the force that can motivate the global economy. A number of countries that have adopted this philosophy have managed, through long- term planning and the implementation of SME-serious policies, to upgrade this vital sector. "China and India, for example, are two countries which, according to the World Bank's estimate, will be leading the world's economy for the next 30 years. Both have a very strong SME sector, which has extremely contributed to the growth of their economies. “Said Jan Sturrason, a Swedish expert at Price-Waterhouse Cooper”.
...tional support with universities, research laboratories, think tanks, trade associations and venture capital institutions allowing them to cultivate a mutually beneficial relationship. The success of the clustering will attract foreign direct investment due to the concentration of labour, skills and infrastructure and the favourable environment for innovative spin-offs.
I agree with the statement above on the basis that communication is the most important thing when it comes to working in unison.
Within every major economy, a great factor in providing the energy of the core of the nations economy is the small and medium enterprises. These cluster of firms are what provide new economic activity, new innovative products and services, along with growing employment and in general a crucial system in ensuring the economy is at a stable growth level. With a majority of this activity stemming from family controlled or managed businesses, the focus on developing a global and long term perspective for these firms are ever growing in importance because of the global perspective entrepreneurship has started to take.