Small and medium enterprises represent 90 percent of all firms in Latin America and generate 50 percent of all jobs. They could be great catalysts of promote growth and structural change in the region. But, at the same time, these companies have a short average life span and are six times less productive than larger firms.
SMEs also have to deal with more barriers to doing business than their larger counterparts. Access to credit is one: Latin American SMEs receive only 12 percent of total credit in the region, and capital costsare sometimes double that for large companies. Access to technology and to education and training for labor and management is also a problem, with SMEs often lacking the resources and knowledge advantage possessed by larger companies.
Poor infrastructure is another challenge for SMEs in the region. The quality of the region’s roads, rails, ports, airports, and electricity grids causes delays and blockages that hamper full productivity.
Under these circumstances, it becomes even harder for these companies to participate in foreign trade or access an international supply chain.
For these reasons, Latin Trade Group and the Inter-American Development Bank have partnered in an effort to promote SME development in the Americas. Latin Trade’s Trade Americas initiative has been a vehicle to help open Latin American markets for North American SMEs. The IDB’s Connect Americas program, launched in March in Brazil, is intended to promote the growth of Latin American SMEs through international trade. This includes education programs, networking opportunities, and other possibilities for SMEs to strengthen their business.
The partnership, Trade Americas & Connect Americas, will promote the interaction between SMEs in the hemisphere through events and publications.“Learn, connect, finance,” is the slogan of the events. The event will be held September 4 and 5 in Miami.
To learn more about Connect Americas, watch a video.
To learn more about Trade/Connect Americas, click here.