Success Factors of Entrepreneurs of Small and Medium Sized Enterprises: Evidence from Bangladesh – Introduction

Success Factors of Entrepreneurs of Small and Medium Sized Enterprises: Evidence from Bangladesh - IntroductionThere is a broad consensus that a vibrant SMEs (herein referred to as Small and medium-sized enterprises) sector is one of the principal driving force in the development of a market economy and vital for a healthy economy. The men and women who run these enterprises are called entrepreneurs. Entrepreneurship is a company that undertakes new arrangement to produce new products and services. It is a process of innovation and creation with four dimensional elements -individual, organization, environmental factors and process, with support from the government, education, and constitution. Historically, it is proven that that with each economic downturn in both developed and developing countries, it is the entrepreneurial drive and persistence that brings us back. In this study, we focus on entrepreneurship as it takes place in SMEs since the two are closely related and cannot be isolated from each other.
Various types of SMEs such as village handicraft makers (weaving, embroidery etc), potteries, dying, small machine shops, restaurants, knitting, small dairy process etc, are, therefore, becoming increasingly important to economic development of developing nations. For example between 1990 and 1995, an average of 84 out of 100 new jobs in the region were generated by micro enterprises in Latin American countries. In Least Developed Countries (LDCs) in Asia small medium enterprises account for 80% of the firms generating 80% employment and 40-70% of value added and in Bangladesh small medium enterprises account for the majority of firms (87%) providing 80% of total employment and contributing 15 percent to Gross Domestic Product (GDP) of the country (Narain, 2003). It is generally recognized that six million SMEs (firms of less than 100 employees) of Bangladesh have a significant role in generating growth and jobs. The country’s SMEs sector contributed up to 25% of Bangladesh’s gross domestic product, about 40% of gross manufacturing output, 80% of industrial jobs, and around 25% of the total labour force in 2003 (ADB, 2004), making the country’s SMEs the largest business sector in the economy of Bangladesh. The garment sector of Bangladesh alone directly employs 2.7 million people, including 1.25 million women and is the source of direct and indirect employment for 10 million people.

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