SMALL AND MEDIUMSIZED

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• SMALL AND MEDIUM-SIZED
• ENTERPRISES AND EMPLOYMENT
• THE CASE OF TURKEY
• Naci GÜNDOGAN
• Anadolu University
• IABE Conference
• Stockholm, June 06-08, 2008

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• There is a broad concensus in the world about
  the central role played by SMEs in
• economic growth,
• competitiveness,
• innovation,
• job creation and employment,
• regional local development,
• social cohesion.

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• SMEs are dynamic tools for
• restructuring economies,
• combating poverty,
• accelarating the social economic development

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• SMEs are particularly important in supporting
  economic growth and livelihoods in developing
  countries, because they
• tend to use more labour-intensive production
  processes than large enterprises, boosting
  employment and leading to more equitable income
  distribution

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• provide livelihood opportunities through simple,
  value-adding processing activities in
  agriculturally-based economies
• nurture entrepreneurship and
• support the building up of systemic productive
  capacities and the creation of flexible economic
  systems, through linkages between small and large
  enterprises.

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Table1- Definition of SMEs
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Table 2- The New SME Definition, Which Entered
into Force on 18 May 2006



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OVERVIEW OF SMEs IN TURKEY

• SMEs constitute a major part of the Turkish
  economy, accounting for a large proportion of the
  countrys businesses and total employment. They
  constitute
• 99 per cent of all the enterprises,
• 76 per cent of employment,
• 8 per cent of export,
• 38 per cent of value added,
• 26 per cent of investments.

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Table 3- Size Distribution of Firms in Selected
Countries and Turkey (2003) ()
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Table 4- Characteristics of SMEs in Selected
Countries and Turkey (2003) ()
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Table 5- Sectoral Distribution of Enterprises in
Turkey
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EMPLOYMENT IN SMEs Table 6- Distribution of
Employment by Firm Size (2003) (per cent)
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• EU considers SMEs as a key source of jobs and
  main driver for innovation.
• Europes private sector jobs are in
• Micro-enterprise 29.8
• Small enterprise 20.8
• Medium-sized 16.5
• Large 32.9

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• In Turkey, SMEs currently employ 76 per cent of
  the labour force.
• Indeed, 75 per cent of all businesses employ five
  people or less.

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• The employment share of micro enterprises is
  substantially higher in Turkey than in the
  developed countries.
• While the average European enterprise employs 6
  people, Turkish enterprises only 2-3 people.

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Table 7- Size Distribution of Enterprises and
Employment in Manufacturing Sector
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Table 8- Average Size in Sectors in Terms of
Number of Employees in Turkey
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SOME OF THE NEGATIVE FEATURES OF SME EMPLOYMENT
IN TURKEY

• Informality and unregistred employment
• Underemployment
• Inadequate training
• Low Wages
• Lack of employment security
• Low unionisation
• Common use of child labour

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CONCLUSION AND FUTURE STUDIES

• In conclusion, it is apparent that SMEs play an
  important role in the Turkish economy due to
  their large share in the total number of
  enterprises and in total employment.
• The general importance of SMEs is widely
  recognised, because of their vital role in job
  creation. But directly linking with SME growth to
  job quality is an issue remaining to be addressed
  in future studies.
• In short, there are two concerns dealing with
  SMEs, these are namely job creation and job
  quality as a whole. These two concerns have to be
  brought more closely together.

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• THANKS FOR YOUR PARTICIPATION