Small and Medium Enterprises (SMEs) and Their Role in Developing the Economy of As-Suwayda

Prof. Dr. Bian Hani Harb

“Small and Medium Enterprises and Their Role in Developing the Economy of As-Suwayda”
(He who does not nurture the small will not attain the large)

Introduction

The Concept of Small and Medium Enterprises

In fact, there is no universally agreed-upon definition—particularly at the academic level—of what constitutes a small or medium enterprise. This is largely due to the variety of indicators used to define such enterprises, including:

• The nature of the economic system within a given country.
• The criteria adopted to classify enterprises as small, medium, or large, such as:
  • Number of employees.
  • Size of capital.
  • Level of technology used.

Overall, definitions vary from one country to another. In the United Kingdom, for example, classification differs by sector: a firm in the chemical industry may be considered small, whereas a firm of similar size in the engineering sector may not be, even when the same criteria are applied.

The U.S. Economic Development Committee has identified a set of characteristics for small enterprises, including:

• Independence of management, typically tied directly to the owner.
• Ownership by a single individual or a small group.
• Limited geographic scope of operations.
• A relatively small scale compared to the sector in which the enterprise operates.

In developing countries, definitions of small and medium enterprises vary considerably, often depending on the prevailing economic system and the level of economic development.

For example:

• In Indonesia, an enterprise is considered small if it employs between 5 and 9 workers.
• In Jordan, a small enterprise is defined as one employing no more than four individuals, while medium enterprises employ between 5 and 9 workers.
• In Syria, legislation defines small enterprises as those employing nine workers or fewer, and medium enterprises as those employing between 10 and 30 workers; anything beyond that is considered large.

Given the increasing reliance on technology and the corresponding decline in the number of workers required, the focus here will be on enterprises employing ten workers or fewer.

The Importance of SMEs in As-Suwayda’s Economy Today

In general, small and medium enterprises—across different sectors—share a number of characteristics that are particularly relevant to the current context of As-Suwayda. These characteristics can be leveraged to maximize their benefits:

1. They often rely on traditional methods of managing production processes.
2. They tend to employ relatively large numbers of workers while making limited use of advanced technology.
3. They are accessible to low-income individuals, as they do not require large capital investments.
4. They produce relatively quick—sometimes immediate—results, which is crucial given the urgent needs of the population under severe pressure resulting from war and the violent incursion carried out by forces affiliated with Hay’at Tahrir al-Sham and allied tribal groups, which devastated the region’s land, property, and population.
5. SMEs operate across most economic sectors, with varying levels of intensity, including:
   • The service sector.
   • The industrial sector.
   • The agricultural sector, which is currently the most important due to abundant rainfall and strengthened water resources—both groundwater and surface water—encouraging agricultural activity and the utilization of available land across the mountain region. This sector also forms the basis for subsequent economic activities, including:
     • Livestock production: raising various animals, poultry, bees, and birds.
     • Agro-processing: particularly the industrial processing of agricultural products such as juices, food preservation, and home-based production, supported by local traditions that encourage family-based economic activity.
6. A key advantage of these enterprises—especially small ones—is their wide geographic spread, particularly in rural areas. This reflects their minimal reliance on advanced infrastructure and their ability to utilize locally available resources.
7. These enterprises can employ rural labor at reasonable wages without requiring high levels of specialization.
8. They can support and stimulate larger enterprises in the future, particularly if conditions of self-governance and self-determination become available for As-Suwayda—an aspiration increasingly shared by many of its residents, especially in light of recent conflict and the breakdown of coexistence.

Key Outcomes and Potential Contributions

From the above, it can be concluded that SMEs may offer unique solutions to the current reality in As-Suwayda, providing advantages that are difficult for larger enterprises to match. Among the most important contributions:

1. Helping to address unemployment, particularly in rural areas.
2. Contributing to social stability, given the link between unemployment and rising crime rates.
3. Reducing rural-to-urban migration, a major issue across the region.
4. Aligning with local traditions that promote household self-sufficiency—an inherited social and economic pattern that, under current conditions, represents not only an economic strategy but also a social one, fostering cooperation, mutual support, and shared expertise within families.
5. Improving income distribution, encouraging individual initiative and productivity, and safeguarding human dignity by reducing dependence on external aid and reinforcing reliance on local capacities.

Challenges and Constraints Facing SMEs in As-Suwayda

Small and medium enterprises in As-Suwayda are currently confronted with a range of constraints that can be broadly summarized as follows:

Financial Constraints:
These are primarily related to access to financing, which can be considered the central issue underlying many of the other challenges faced by these enterprises. This reality necessitates careful and strategic consideration of funding mechanisms, particularly for small and family-based businesses. Globally, many countries have established specialized financial institutions aimed at supporting and developing SMEs, enabling them to fulfill both economic and social functions.

Managerial Constraints:
These include the relatively weak administrative performance of those managing such enterprises, as well as the organizational frameworks that define relationships among enterprises and between them and external actors, whether governmental or otherwise. In many respects, managerial constraints may be more difficult to address than other types of challenges. This is due to the gap between prevailing administrative practices and modern standards of management, marketing, and production. Contemporary markets require rapid adaptation, continuous learning, and the effective integration of evolving organizational and technological methods, alongside a degree of flexibility suited to an increasingly dynamic and competitive environment.

Marketing Constraints:
Markets today are shaped by a high degree of consumer sovereignty, where changing consumer preferences and behaviors directly influence the nature of goods and services offered. As a result, traditional marketing approaches have become insufficient for maintaining stable market shares. SMEs also face competition from larger enterprises, further complicating their position. Consequently, marketing has emerged as a critical area requiring targeted solutions by both enterprise managers and supporting institutions.
However, in the specific context of As-Suwayda, these constraints may currently be less pronounced, as demand often exceeds supply. Moreover, the immediate objective of promoting SMEs at present is primarily social rather than profit-driven—although financial sustainability remains essential in the long term.

Technical and Production Constraints:
These stem from inadequate training and qualification of the workforce in line with modern technological developments, as well as limited access to advanced technologies. Such limitations may be due to financial barriers, technical constraints, or insufficient human resource preparation to effectively utilize these technologies.

Legal and Legislative Constraints:
These relate to the regulatory framework governing SMEs, including tax legislation and laws related to import and export, among others. There is a clear need for flexibility in dealing with these enterprises—at least in the current phase—until a more comprehensive legal framework can be developed to regulate this vital economic sector in a manner consistent with present conditions.

Recommendations and Proposed Solutions

Drawing on practical experience and direct involvement in managing UN and international funds, I can offer a set of recommendations aimed at leveraging the vital and distinctive SME sector in As-Suwayda. The goal is to help remove existing constraints and improve the sector’s performance so it can play a stronger role in sustainable community development.

The fundamental principle guiding the development of this sector can be summarized in the following statement:
“If failure necessitates change, then success certainly requires change as well.”
Continuous and direct support is essential, particularly in the early stages of a project, where risks are high and often exceed the capacities of entrepreneurs in their initial phases.

Experiences from many countries underscore the importance of focusing on SMEs as a means of generating employment opportunities with relatively low-cost investments. This is especially relevant in As-Suwayda, where there is a strong base of available skills, including university graduates, technical institute alumni, vocational school graduates, and a wide range of skilled professionals and artisans. This human capital constitutes a key incentive for prioritizing proper management and support of these enterprises as a first step.

This raises a central question: how can we effectively initiate and support the success of these enterprises?

To address this, a preliminary action plan can be proposed, structured in phases:

Phase One:
Form a technocratic task force, composed according to the functional requirements of developing this sector, with the mandate to design a context-sensitive action plan tailored to the current realities of As-Suwayda.

Phase Two:
Conduct an initial assessment to map the operating conditions of SMEs across different geographic areas of As-Suwayda, identifying their current status and urgent needs in each locality.
In parallel, systematically identify and analyze the constraints limiting their activity, bringing these issues to the attention of the task force and relevant stakeholders in order to develop a grounded and actionable understanding of the situation and propose appropriate solutions.

Phase Three:
Develop and implement an immediate action plan aimed first at removing key constraints, followed by the establishment and support of new and existing enterprises. Within this framework, several core recommendations can guide the task force in designing an effective strategy:

1. Financial Dimension:
   Access to finance remains the primary obstacle to the development of this critical sector. A viable approach would be the establishment of a dedicated, non-profit funding mechanism responsible for financing SMEs after assessing their feasibility, while also monitoring their performance to support and enhance the capacities of entrepreneurs.
   This requires the availability of qualified personnel capable of managing such a fund according to objective performance standards and measurable indicators, particularly given the significant risks associated with loan guarantees, repayment schedules, and related financial obligations.
2. Organizational Dimension:
   There is a need for a unified institutional reference point—such as the former Union of Craftsmen, agricultural, industrial, or commercial chambers, or a newly established cooperative entity—to develop a comprehensive vision of the sector and ensure ongoing organization of its activities.
   This should be accompanied by a legal framework that incorporates simplified procedures to the greatest extent possible, in order to reduce bureaucratic inefficiencies.
3. Managerial Dimension:
   The capabilities of many individuals managing these enterprises reveal a clear gap in knowledge of modern administrative, production, and marketing practices. This necessitates the provision of basic training for human resources through specialized courses offered free of charge by experts in management, marketing, and production.
4. Marketing Dimension:
   Marketing operations and program design should be considered core responsibilities of the specialized task force overseeing this sector. This includes developing appropriate mechanisms to help entrepreneurs distribute their products in light of rapidly changing conditions.
   The task force should also establish organizational frameworks that enable these enterprises to market their products collectively, thereby reducing the risks associated with intense competition when operating individually.
   At the same time, it is important to anticipate the need for more advanced marketing strategies once current conditions stabilize, taking into account consumer behavior as a key determinant of product type and quality.