The Economics Sustainability in Medium and Small Companies in Colombia (SMEs)

The Economics Sustainability in Medium and Small Companies in Colombia (SMEs)

Fabio Fernando Moscoso Duran (EAN University, Colombia) and Tomás Mancha-Navarro (Universidad de Alcalá de Henares, Spain)
DOI: 10.4018/978-1-5225-3543-0.ch016

Abstract

The purpose of this chapter is to explain the importance of SMEs for Colombian economic growth and how business sustainability can generate value, innovation, and respect for the environment. The chapter analyzes how SMEs could create economic sustainability based on the study carried out by Avellaneda et al. for the Colombian case. It is structured with the main objective of explaining the most important barriers to sustainable practices of SMEs in developing countries. Some theoretical elements that allow SMEs to create sustainable value in companies and the main stylized fact of SMEs at world level are introduced. Finally, the chapter analyzes how to integrate sustainability into business practices based on the study carried out by the EAN University in a sample of SMEs between 2000 and 2009.
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Creating Economic Sustainability In Smes

“Although many people around the world have lived through decades of benefits unemployment, poverty and inequality remain the major obstacles to sustainable development and global stability”. (International Labour Organization ILO, 2015, pp. 2-3). In this sense, large multinational companies have created sophisticated production systems at the expense of the quality and remuneration of work. At present, a second social problem arises from production at scale and low salaries: income inequality. This phenomenon is more tangible in countries where products of the primary sector are exploited intensely.

According to the ILO report (2014), more and better jobs are needed in most countries to maintain social cohesion, achieve general welfare and reduce poverty. And these must be the jobs of the future: productive jobs of good quality, which also conserve the environment and generate innovation and development within the organizations. In fact, corporate sustainability depends on the future development of nations and peoples as ILO (2014) points out: “in most countries it is private enterprises that create the largest number of jobs, especially in developing countries, where more than 90% of jobs are in the private sector. People who have overcome poverty identify “finding paid employment” or “starting a business” as the two most important reasons.” (ILO, 2014, pp. 4-5).

Table 1.
Share of micro, small and medium sized firms in total number of MSMEs (%).
% of Micro Firms% of Small Firms% of Medium-Sized Firms
Developed87.110.72.2
Developing80.515.63.9
G20 developing82.113.24.7
Other developing80.514.94.5
LCD´s78.620.70.6
Total82.913.83.3

Source: WTO, 2016.

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