The Impact of Entrepreneurial Characteristics on SME Performance

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The Impact of Entrepreneurial Characteristics on SME Performance The Small and Medium Enterprises (SME) plays a very important role in the success & development of any economy. According to the SME policy 2007, “SME sector is the backbone of Pakistan’s Economy”. Globally, this sector is the major growing force behind the fastest growing economy of China, in term of contribution to the national GDP, scale of assets, diversification of products and the creation of employment. Similarly, the role of SME is well acknowledged in the other countries such as Japan, Korea, and all other industrialized economies in terms of economic development (Hand Book on Islamic SME Financing Islamic Banking Department, State Bank of Pakistan, 2009). There are some hidden and apparent obstacles in the path of growth of small and medium enterprises in Pakistan as pointed out in the SME Policy development-2007; the poor national performance on the Human Development Index of the UN has its consequences for SMEs in Pakistan. These include inadequate and generic education and insufficient, poorly focused and under-serving training infrastructure. SME's mostly draw their human resource (including the owners) from either the higher education institutions or the technical training infrastructure, both of which are not attuned to the SME needs nor are they equipped to address them. This situation limits the capacity and ability of SME's to innovate, The SME sector neither possesses the financial strength nor the collective wisdom to climb its way out of this low equilibrium enterprise activity. In addition to these factors, according to the Hand Book on Islamic SME Financing (2007), “political instability, law and order situation, financial constraints, en... ... middle of paper ... ...mall Business Success Factors: the role of education and training. Eduction + Training, 46(89), 481-495. S.M.E Ploicy 2007, Retrieved Nov 15, from Smith , J. R. & Mosley , Alisa L.(2006). Sociological factors, psychological traits and entrepreneurial orientation : A study of used car dealers. Retrieved Nov 20, 2009, from Salavou, H. & Lioukas. S.(2003). Radical product innovating in SMEs: The dominance of Entrepreneurial orientation. Creativity & Innovation Management. 12 (2). 94-108. Thompson, L. (2004). The facets of the entrepreneur: Identifying Entrepreneurial potentials. Management decision, 42(2), 243-258. Yusuf, A. (2002). Environmental uncertainty, the entrepreneurial orientation of business ventures and performance. IJMC, 12(3&4), 83-103.
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