Belcanto Business Studio

Archive for the ‘Business Networking’ Category

Generating SMEs to want to build a business network is not an easy job. In the North-Central Italy, which is a movement epicentrum network, has been forging since the early 1980s. Since then beginning a successful growing business network in the Emilia Romagna and the surrounding area. The success has been paying attention for its scholars from Europe and America.

The successful development of business networks in Italy have affected several countries in the development of SMEs through cooperation between companies. The first practice is the United States, but the project’s most successful and probably the best is “the Danish National Network Project”, developed by Denmark in 1989.

What can be learned from the experience of developed countries in developing a business network is the start was not easy. However, once successful would be easier to pass.

As a first step that needs to be done is to change the business culture (changing business culture). This is not easy to do that is changing the business culture. Not only are SMEs, business besarpun there is a tendency to a monopoly in its business. Moreover, if they truly have enjoyed great results and the greater the business activity conducted. The existence of Law No. 5 of 1999 on Prohibition of Monopoly Practices and Unhealthy Competition will be a barrier to create a more healthy business competition. This Act will be one of rules that encourage business cooperation between businessmen.

in general, there are 4 different types of networks, among others.

1. Berkonfigurasikan networks back for meaningful corporate chain, to create economical business scope. Some examples of these business networks are in Denmark, 11 apparel makers to form Christian Dior Line (CD-Line) to explore their capabilities in meeting the equipment to produce coats, shirts, accessories and zipper. So the companies that form the network is able to build “image clothing” for big European companies.

2. Networks that enhance internal efficiency, enabling SMEs to realize the importance of economies of scale. One successful example of this is the project company producing agricultural equipment in northern Argentina near the Province of Mato Grasso in Brasilia. The network is formed due to the condition that the land is capable, they want to develop an effective agriculture. They developed the concept of joint marketing and engineering experiments designed to reduce vertical integration for more efficient production processes. This network is slowly managed to become a large manufacturing specialization, increasing the sub-contracts and competitive price.

3. Network to develop an economical management. In economic theory, big business would benefit with the economic management – the ability to spread the high cost of sophisticated administration, finance, and marketing activities through a large volume of business transactions. Meanwhile, production of goods and services that are decentralized to become efficient, manager and owner will be isolated as effective as the management team scattered. Some examples of this concept is the small industries in the North-Central Italian cooperation in the finance service “Business Development Services”

4. Network to improve the bargaining position of SMEs to help access the market. Obviously, the expansion will occur because of the increased scale of business. Extensive network means that marketing is also increasing.

Economic development that relies on a handful of people or groups to pursue high growth in hopes of hatching down never materialize. Quite the opposite is happening, poverty and unemployment on the increase every year. Small and medium business sector is recognized the world able to support the national economy was not noticed during this and the increasingly marginalized in the competition. Fortunately, a crisis that hit this nation in the middle of 1997, making us turn attention to SMEs. The question is have we really give full attention to the SMEs? This is what must be realized even more to face tougher challenges ahead in the era of globalization and regional autonomy. SMEs must be able to compete with other economic actors, both inside and outside the country.

One effort that can be done to improve the competitiveness is the development of business jeringan. Through this effort will occur jeringan strengthening the bargaining position of the business in developing its business.

It must be realized that the existence of small and medium enterprises (SMEs) an integral part of national development can not be ignored. The monetary crisis that began in the mid Juli1997 and spread of economic crisis, political and social, better known by the name of the multidimensional crisis has brought blessing for the life of SMEs. If in the past-read the New Order era, the presence of SMEs are often marginalized, is now recognized by all parties, especially pemeratan, to get special attention. Policy past beroientasi to pursue economic growth without regard to government development results have been felt wrong. The orientation of this growth, it was not successful in reducing the gap the gap between rich and poor, between the western with the eastern region or among small businesses – read the small and medium entrepreneurs with big business conglomerates-read.

In the developed countries mentioned above, the role of  already exceeds the role of Big Business. In exports, for example, has more than 55% is contributed by SMEs in these countries. Even in Italy, the role of SMEs in export has reached more than 75%.

The question that may arise is whether this can be done by Indonesian SMEs? to answer these questions, we should be optimistic because we have tremendous potential to be developed by SMEs. SMEs should be encouraged to develop their business based on local resources and export-oriented. With the business development strategy with the digging of export potential of locally available resources, particularly in the agribusiness sector / agro-industry means we have developed a “comparative advantage” to be developed into “competitive advantage”. If this is successfully realized, then our SMEs will be able to compete against the free market and investment in the coming global era.

The story of the past and the multidimensional crisis that occurred during this has brought about a fundamental change in the paradigm of national development. Economic convergence is no longer a priority; opposite the widest opportunity should be given to all without the need to encourage ethnic, religious, racial, and class. This means the opportunity for the development of SMEs more open. SMEs which controls 99.99% of all national efforts should be empowered to be able to play a more national should be empowered to be able to play a bigger role in national economy. Those, who now are able to absorb large numbers of more than 99% of the current workforce must be able to give a large contribution also in exports and Gross Domestic Product (GDP). Today they still accounted for no more than 20% in exports and 59.36% in GDP. When viewed from the trip developed countries like the United States, Japan, Italy and Taiwan are largely supported by the SME economy, then we must seek to develop SMEs to be able to take part in the larger national economy.

The success of SME development in some developed countries such as the network business (business networks) well developed. Take the example of Taiwan, for example, there are two concepts that are developed, namely: (a) for the industrial sector known as “satellite factory system ” and (b) for non-industry sector, developed a business network called “cooperative exchange program. ” The concept of satellite factory system (John CI NI, 1997) revealed a pattern identical to sub-contract as it developed in the automotive industry in Japan. Major industries doing sub-contract some of the components is done by small and medium industries. In this regard, large industry produces only the important parts and assemble products. In Taiwan, the industries that develop setelit systems include automobile assembly industry, electronic industry (ACER, SONY, Motorola, etc.), industrial and aircraft engine (Thunder Tiger).

Small and Medium Enterprises (SMEs) have been recognized in the world that they play predominant roles not only to economic development, but also to social welfare improvement. In regard to the economic development, the roles of SMEs, are much more significant in developed countries compare to that of developing countries. Some examples can be seen such as in USA, Japan, Italy, and Chinese Taipei. APEC Report (2000) and The Italian Ambassador’s speech (1998) reported that export contribution of SMEs for developed countries has already reached more than 55%. In Italy, for instance, the export contribution of SMEs is 75%. Not only on export are SMEs playing significant roles. In terms of Gross Domestic Product (GDP), SMEs also play very dominantly in the above-mentioned countries.

Meanwhile, in developing countries, though more than 80% of the total business entities are SMEs, their contribution is still lower than that of the big businesses. In Indonesia, for instance, although 99.99% of business entities are SMEs, they contribute not more than 20% on export and 59.36 % on GDP. However, they employ more than 99% of the total man power (Urata, 2000). These figures have shown a lot of changes than that of before the crisis. It means that the economic crisis is blessing in disguise for SMEs. They still can maintain their business activities, while more than 99 % of big enterprises are collapse.

Though recognized the important roles of SMEs, a lot of efforts need to be developed in order to strengthen competitiveness of SMEs, particularly facing the era of globalization. In the ASEAN region, we are facing AFTA (ASEAN Free Trade Area) in the coming year of 2003 and in the Asia-Pacific (APEC) region we still have enough time to trade and investment liberalization that is in the year of 2020. The future challenges of competition should be considered as opportunities for our SMEs to be able to compete in the globalization era and to do this one of the solutions might be through business networks.

Some examples of successful development of business networks in Australia are:

1. Asia Pacific Design Group. Business network is formed by 11 companies engaged in consulting services for all aspects of building and construction

2. ATVC. ATVC is Automotive Trim and Upholstrey Contractors Network. Where 8 companies establish business networks to win the tender contracts to Trim rail installation, where that has always been won by Bridgestone from Japan or North America.

3. Daplar. Daplar is a cooperative network of 4 company and switching cabinet maker who produces kitchen set and a bathroom. Business network is able to produce order-order house that “knocked down”.

4. Ambulances to Asia. This network provides a package of ready-made ambulances for medical services to meet the demand in the Asian market.

5. Oz Electronics Manufacturing. The network is a cooperative effort between the 3 (three), small electronic companies which face the same problem that cost the company a high component required. Without this network they seem unlikely to survive in the face of these high costs.