Arab News, Monday, Nov 21, 2022 | Rabi Al Thani 26, 1444
Saudi SMEs need to transform into resilient, tech-savvy operations to go global: KPMG
Saudi Arabia :
Industrial small and medium enterprises in Saudi Arabia will have to transform
into resilient and technologically savvy operations in order to go global and be
able to compete internationally, according to a report by the multinational
professional services network KPMG.
Outlining a road map for the Saudi SME sector in a
report titled "Growing new industrial supply chains," KPMG said that local SMEs
need to conduct market research to decide what region or sector they should
focus on.
It suggested that SMEs will also need to use third
parties to accelerate digitization, enabling them access to the technical skills
and experience required to build new digital solutions, elevate capabilities,
monitor performance, and sustain contractor relationships.
In addition to this, local SMEs are also urged to
leverage technology in such a way that allows them to resolve business
challenges without having to depend on a skilled workforce.
Moreover, the report said, SMEs should also raise
their speed to market by boosting innovation and product development through
utilizing technology and specialized skillsets respectively.
To become globally competitive, the report said
quality management is also crucial for SMEs to ensure that their products abide
by the relevant international standards and enter global value chains
established by transitional corporations.
"Throughout their journey of establishing local
industrial supply chains, SMEs may face various challenges, which can be
exacerbated by global occurrences and shocks, such as the global COVID-19
pandemic," said Kenan Nouwailati, head of Procurement, Supply Chain and Local
Content Advisory at KPMG in Saudi Arabia.
Going global can help industrial SMEs curb several
challenges they face on a domestic level, the most prominent of which are
fluctuations in supply and demand, attracting a skilled workforce with the right
experience, attracting investments, regulatory challenges, and keeping up with
digitalization.
With proper financial support and advisory
services – such as the National Industry Strategy – SMEs will have the
opportunity to achieve long-term success and overcome the challenges faced, it
added.
“As Saudi Arabia looks to diversify its sources of
revenue, grow its non-oil-based economy and increase the contribution of SMEs
and the industrial sector to the GDP, supporting emerging industrial enterprises
in the country will be vital,” asserted Omar Alhalabi, director, Global Strategy
Group at KPMG in Saudi Arabia.
This comes as the Social Development Bank signed
an agreement with the National Technology Development Program to operate a
financing opportunity worth SR200 million ($53.2 million) to be allocated to
technology-centric SMEs to ensure enhancing their competitiveness and playing
their vital role in the national economy in line with the Saudi Vision 2030.
Saudi Arabia’s SME sector witnessed a growth
trajectory in the first half of 2022, as the Kingdom pushes ahead with fostering
entrepreneurship and stimulating investment in startups and small businesses as
part of Vision 2030.
The number of registered SMEs in Saudi Arabia hit
892,063 at the close of June, registering a 25.6 percent increase from the
fourth quarter of 2021, according to the General Authority for Small and Medium
Enterprises.
Riyadh and Makkah were the most attractive regions
for startups, accounting for 35.4 percent and 21 percent of the Kingdom’s SMEs
respectively, according to Monsha’at quarterly report titled SME Monitor.
The Eastern province was placed third with 12.7
percent of the total SMEs in Saudi Arabia.