The above illustrated listing of auxiliary industries are indicative of the type of industry that the small business sector contribute to the overall requirements of large enterprises, such as engaging in manufacturing of hardware utilities, textiles, haberdashery, garments. Likewise, the service of auxiliary industry relates the basic requirements of household, as well as the engineering and construction firms that deals with aggregate supplies.
It is noteworthy to include the classification of the type of industry from which the small business entrepreneurs may venture out the domestic investments. On the other hand, the raw materials in manufacturing the above listed products is another interesting area of study, correlating Shalaby’s (2004) assessment on the how the SMEs shall stabilize its domestic resourcing in order to support the overall need of the industry, pertaining to enable the capability that addresses the raw material production or judicious sourcing from the supply chain.
Acknowledging global convergence and experiences This section of the paper will indicate the convergence of support from various stakeholders inside and outside of Saudi Arabia. The points of examination will relate the revalidation of literature as previously reviewed in the subsequent discussions above. It would be interesting information how SMEs have successfully established worldwide, ranging from highly industrialized states to developing countries with fast growing population. Ayyagari et al.
(2005) have conducted their study-research on the development and situation of SMEs in 76 countries. As a synthesis of the finding, it showed that SMEs relationship to domestic economy remarkably absorb the scarcity of labor market and significantly contribute to the nation’s achievement of gross domestic product (GDP). Substantial to the finding is the revalidation of data that SMEs are not only potential to domestic economies but indicates the social relevance to governmental leadership and functions in terms of actualizing the “social governance”.
As cited, the social effect in the establishment of SMEs have vigorously manifesting the role of governments in emancipating its economic structure, indicative on the socio-economic life and socio-political interaction of the population (Ayyagari et al. , 2005). Based on the study-research, the social description of the SMEs is “informal labor force” within a “formal” or structured industry represented by large enterprises that are being referred to as multi-national companies. Read about Mountainside Industries
To cite, the types of SMEs [belonging from the informal sector] of 76 countries have been categorized according to economic performance, such as 17 from low income, 31 from middle income and 28 from high income countries (Ayyagari et al. , 2005). Indicative of Ayyagari’s findings is the perception that informal labor force composes the venture for varied industrial requirements, like services and materials for manufacturing of high-end industries or multi-national companies.
The supply side could be the factor of opportunity for the labor forces to indulge in servicing and producing the supply requirement, eventually creating the small business sector and therefore establishes the small-medium enterprises. It may be reflected that the current situation of Saudi Arabia in the prevalence of foreign investments on multi-national companies or large enterprises creates the opportunity of investments on auxiliary industries, engaging the small business entrepreneurs.
However, that opportunity may lose the national perspective of economic interdependence and nationalization of domestic production and consumption, in which the large enterprises may only be the ones to utilize. The above reflection may as well validate Ayyagari’s finding that “formal enterprises” reduces economic development, while the consequence of establishing “informal enterprises” through the SMEs amplifies the economy.