Transcript Industrial SME`s role in job creation and sustaining growth in Jordan

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Industrial SME’s Role in Job Creation and
Sustaining Growth
in Jordan
DR. IYAD ABU HALTAM
JORDAN CHAMBER OF INDUSTRY
International Experience
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 Real engine of growth and job creation.
 Major field to enhance productivity, innovation,…
More then
50% of labor
force in EU
95% of EU
firms
60% of
labor
force
90% of
firms in
the world
International Experience
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Why SME’s
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This role comes as a result of the following facts:
Labor intensive
Income Redistribution
Efficient use of resources
Building productive environment
Major component of local development
SMEs in Jordan
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Employment
No. Firms
Large
> 100
Medium
20 – 99
Small
5 – 19
Micro
1-4
Large
0.4 %
Large
1.4 %
Medium
2,244
Small
10,454
Micro
143,362
TOTAL
Medium
6.7 %
Small
91.5%
Micro
5
668
99.6 %
MSMEs
156,728
SMEs in Jordan
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Employment
30%
Value-Added
0.4%
70%
60%
40%
99.6%
SMEs in Jordan
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It is not acceptable to push the economy from the top
SMEs in Jordan
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The Role of Industrial Sector in the
Economy
Main Industrial Indicator
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Employees:
240,000
worker
Total
Firms:
18,000 firm
Total capital:
more than 5 billion
Exports:
More than 90%
from national
exports
Socio-economic role of industrial sector
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Industrial sector contributed
in national reserve by more
than 7 billion dollar each year,
result from export and
investment.
More than one billion
JDs as salaries and
pensions
Around 70% of FDI went to
the industrial sector
More than 25% as a
GDP contribution
Industrial sector pays more
than 1.1 billion dinar as tax on
production, on average 8 cent
per one production dinar.
SME’s in industrial sector
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1.9
5.4
14.4
78.4
Large
Medium
Small
Micro
Why SMEs considered as growth accelerator
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 Labour Intensive
 Low Initial Investment Requirements
 Local Markets Oriented
 Ability to play a major role in backward and forward
linkages.
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SME’s role in job creation
Unemployment in Jordan
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 Unemployment Considered as the major challenge in
Jordan.
 Unemployment rate retched about 11.7% in the first three
quarters of 2014.
 The percentage of population in the working age in Jordan
is about (60%) for the total population.
 Most of the unemployed people are youth.
Unemployment causes in Jordan
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
The normal increase of population growth. (80 thousands
jobs needed yearly to keep unemployment constant)

Inefficient economic development plans

Skilled and unskilled Foreign labour force

Regional situation (refugees)

Insufficient number of jobs created by the economy due
to lack of real Public-Private Partnership
Unemployment rate in Jordan
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18
16
14
13.7
14.7
15.3
14.3 14.7 14.8 14.0
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13.1 12.7 12.9
12.5 12.8 12.2 12.6
11.7
10
8
6
4
2
Q3 2014
Q1
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
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The Role of Jordanian Industrial Sector in Job
Creation
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 The industrial sector employs more than 18% of the total labour force
in Jordan
 Average workers in industrial firm is 13 worker, while the average in
other sectors are around 3 worker/firm.
This means that the industrial sector is able to create more
jobs than any other sector.
 Industrial sector created more than 11 thousands jobs in 2013.
 75% of its workers in Industrial sector are covered by social security.
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Due to the fact, more than 98% industrial firms are SMEs,
and the role of Jordan chamber of industry as the main
body of Jordan industrial sector, is implementing several
programs to create more jobs:
a) JCI Initiative was to Establish the
SMEs Technical Support Unit
 To Help the huge number of SMEs in the Industrial Sector
 To help Industrial SMEs to avoid the major challenges that
they may face.
To enhance and to build up the
capacity of these firms
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SMEs Technical Services
Advisory and
consultation Services
Access to Finance
Networking and Data
base
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Strategic Goals
of
SME
UNIT
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Increase the sufficient level of SMEs
Publishing the concept of self working and
entrepreneurship
Enhance the business environment for SMEs
Supporting the financial programs for SMEs
Building positive environment for workers in
SME
Sustainable financial services
Conduct the required research and analysis
Role of SME Technical Support Unit
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 Advisory services for establishing SMEs.
 Business plans and feasibility studies.
 Capacity building for entrepreneurs.
 Cooperate and co-ordinate with all institutions for
SMEs.
Role of SME Technical Support Unit
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 Supporting
financial, production
and innovation programs for SMEs.
 Participate in building the national
database for SMEs.
 Building
industrial
enhance
the
competitiveness.
 Cooperate
clusters
level
to
of
with the International
donors and institutions in the field
of SMEs.
b) Training and employability unit
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Project Goals:
 Activate the role of Jordan chamber of industry to enhance
training and job creation fore young job seekers in Jordan
 Increase the percentage of Jordanian workers in the industrial
sector
b) Training and employability unit
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Targeted sector:

Plastic and Rubber Industries

Packing, Packaging, Paper, Cartoon and Stationeries Industries

Food, Supplies, Agricultural and Livestock Industries

Leather and Garments Industries

Furniture and Wooden Industries
Geographic areas covered by the project:
 East Amman
 Zarqa
 Irbid
c) Partnership between academia and industrial sector
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 Implementing awareness training program for professors
and students in universities about industrial sector and its
products.
 Implementing joint projects according to industrial firms
needs.
 Lunching Internship programs.
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Thank you