Home > Energy > Expert Contributor

The Importance of MSMEs for Economic Growth

By Vladimiro de la Mora - GE México


By Vladimiro de la Mora | President - Fri, 06/02/2023 - 10:00

share it

MiPyMes (micro, small and medium-sized companies (also referred to as MSMEs)) in Mexico are a fundamental piece of the economy since they represent an engine of growth and employment creation. In fact, there are several characteristics that make these businesses essential for national economic development: 

  • Contribution to GDP: MSMEs represent a significant part of Mexico's economic  growth. According to data from the National Institute of Geography and Statistics (INEGI in Spanish), these units contributed 42% of Gross Domestic Product (GDP) in 2021, which represents an increase of 1% compared to the previous year.

  • Employment generation: According to the Mexican Social Security Institute (IMSS), in 2021, MSMEs generated more than 12 million formal jobs, which represents 72% of total employment in the country. In addition, they are an important source of work for young people.

  • Promotion of innovation: MiPyMEs carry out research and development activities, such as the improvement of products, processes or services. This shows that they contribute to the creation and adoption of new technologies and practices in the national market.

  • Support for social inclusion: MSMEs in Mexico also play an important role in social inclusion. They are usually an option for people who face barriers to access formal employment, such as young people, women, people with disabilities or Indigenous communities. In fact, according to INEGI, 3 out of 10 of these units in Mexico are led by women, contributing to gender equality and their inclusion in productive activities.

  • Promotion of competitiveness: This is where different policies and support programs, such as financing, training, access to markets and administrative simplification come in, with the aim of improving their capacities and strengthening their contribution to the economic growth of the country. 

So, what can we do to encourage the development of more businesses like these in the country? How can we help to modernize and professionalize them? How can we prepare them for growth? In the private sector, we know the importance of these companies and we want to favor, with concrete measures and actions, their sustainable development.  

For Greater Entrepreneurship in Mexico

In March the country's economy  grew 3.8% compared to the same month last year, according to INEGI. Of course, this is good news for Mexico and I believe that this trend is due, among other things, to the recent investment announcements derived from the attractiveness of our territory for nearshoring, in addition to the progressive decrease in global inflation.

But all our attention should not be placed in that one basket. We must also look at what we are doing in favor of MiPyMes in Mexico. Specifically, these are some measures that —I believe — we can enable from the private sector to promote entrepreneurship in the country:

  • Generation of strategic alliances: Large companies can establish local supply programs, where we buy goods and services from MSMEs, allowing them to have a constant flow of income and to strengthen their productive capacity.

In addition, it is viable to collaborate in the improvement of their business management, providing them with technical advice and training in areas like finance, marketing and human resources.

  • Access to financing: This is one of its main challenges. From the private sector, it is urgent that we collaborate with these companies in obtaining resources, either through direct investments, loans or lines of credit. In addition, it is possible to facilitate their access to alternative financing schemes, such as crowdfunding, which allow them to obtain resources in a more agile and flexible way.

  • Promotion of local commerce: Also, it is feasible that we support them with the sale of their products and services. For example, by including MiPyMes products in our distribution channels, such as in physical stores or online sales platforms.

Also, we can promote campaigns to promote local consumption, educating consumers about the importance of supporting MiPyMes, in addition to highlighting the quality and diversity of their products and services.

  • Development of corporate social responsibility (CSR) programs: It is feasible to implement these programs to support MiPyMes in their growth and development. They can even include actions like training, support in improving infrastructure or the implementation of sustainable development programs.

  • Promotion of innovation: Support for access to digital tools, such as management software, electronic commerce platforms or digital marketing tools, would allow MiPyMes to improve their productivity and competitiveness in the market.

These actions are just a sample of the enormous opportunity that we have in the private sector to promote the development and modernization of MiPyMes in Mexico, which would result in the uniform growth of the Mexican economy, without mirages. It  would also give these businesses, in the medium term, the technological and competitive conditions to export and further expand their market.

It is time then to continue being, with deep pride and commitment, promoters of the transformation of these companies, thus contributing to the integral development of our country.

Photo by:   Vladimiro de la Mora

You May Like

Most popular