1. Dynamics and Prospects Role of Business Schools in Developing Enterprises and SMEs Mohammad Sajjad Moghal Team Leader Private Sector Development - USAID Sajjad_moghal@hotmail.com

2. sajjad_moghal@hotmail.com Source: *Economic Census Pakistan 2005 & Labour Force Survey 2003-4 A Brief Profile of SME Sector  Number of Enterprises: 3.2 million (99% employ > 10)  Value Addition in Manufacturing: 35%  Contribution to GDP: 30%  Share in manufactured exports: 25%  Contribute 35% in Manufacturing Value addition  Contribution in industrial employment – 78%  84% of enterprises have sales below Rs. 0.5 million & 93% have sales below Rs. 1 million

3. sajjad_moghal@hotmail.com Business Sector by Size, Sales & Emp Employment Categories Median Employm ent Size Median Sales Number of Firms '000 Total Sales Rs. Billion Total Employmen t in Million Emp 1-52144,0003,063.051,071 5.72 Emp 6-107384,000102.01 161 0.74 Emp 11-20 13696,00032.89 98 0.46 Emp 21-50 271,580,00014.19 1200.42 Emp 51-100 666,000,000 3.09 45 0.21 Emp 101-250 13524,000,000 1.31 61 0.19 Emp 250+501356,700,0000.70 4070.58

4. sajjad_moghal@hotmail.com http://www.smeda.org.pk Top Ten Business Sectors Economic Sectors Median Emp. Size Median Sales Rs. ‘000 # of Firms ‘000 Total Sales Rs. Billion Total Emp. in Million % Cont. Emp. Retail Trade 2 2161,439 697.300 2.37128.47% Services 27231243.9201.36016.33% Manf. of Textiles Apparel Leather products 263265241.3570.86410.37% Personal & Household Services 27246451.5760.8209.85% Government Excl Defense 6108215.0740.4565.48% Manufacturing of Food Beverages & Tobacco 298131122.0560.4365.24% Restaurants & Hotels 218014643.1520.3454.14% Manf. Fabricated Metal Prod. 31806193.6870.2132.56% Wholesale Trade 248090274.6040.2122.55% Manf. Wood/Wood Prod. Incl. Furniture 21226620.2240.1692.02%

5. sajjad_moghal@hotmail.com Enterprises by Emp. Size and share in Total Employment Source: Economic Census of Pakistan 2005

6. sajjad_moghal@hotmail.com Industrial Units by Employment Size Source: Gallup Survey of 1000 Industries in 2002 covering 12 cities & 8 sectors

7. 7 Labor Productivity Due to Skill Difference Source: World Bank, Investment Climate Survey 2001-02

8. Low Export Orientation Source: World Bank, Investment Climate Survey 2001-02

9. 9 Growth Small vis-à-vis Large Scale Large-ScaleSME Sector Output Growth Rate % Capital Formation Growth % Output Growth Rate % Capital Formation Growth % 1970s4.84-2.284.45.5 1980s8.168.154.710.5 1990s3.6-5.022.67.2 Source: Dr. Ehsan ul Haq, Dr. Faisal Bari- LUMS; Barriers in SME Growth - 2002

10. 10 It is Difficult to Grow for an SME Growth in Employment MicroSmallMediumLarge Negative Growth11%12%16%18% No Growth46%50%48%30% Growth39%36%35%51% Source: SMEDA World Bank Investment Climate Survey 2001

11. sajjad_moghal@hotmail.com Dearth of Business Leadership  Overly focused on corporate and industrial sector  Business schools have abdicated their role in:  supplying leadership for small businesses  Business Services sector  Future opportunities are in the Retail, Wholesale, services and Agriculture

12. Business Service Agencies Business Schools Project Ownership SMEs Policy Interventions Reshaping the Business Environment Need analysis Org. Spin Offs/ Solutions Strategy Formulation – HR Dev. Packages/ Business Managers Research/ Analysis – Markets, Industry, Technology and Regulations Industry-Academia Coordination and Sustainable Commercial Linkages Need Assessment/ Feedback: CCIs, TAs The Role of Business Schools Business Services Sector Specialists

13. Thank you very much