1. It generates revenue for the public sector.
SMEs provide funding that steers the public sector, because it heavily relies on incoming money from SMEs in order to run its operations. The public sector raises money by taxes, payment of filing fees, fines etc.
2. Provision of goods and services to the public sector.
The public sector majorly depends on SMEs for various provisions of supplies. By outsourcing these supplies from SMEs, the public sector is left to concentrate on its core activities.
3. Provision of essential goods and services to the citizens.
SMEs provide basic essential goods and services such as healthcare, infrastructure, communication, transport etc. which is a primary mandate of the public sector.
4. Creation of employment.
SMEs absorb a large number of people for employment which could not be absorbed in the public sector. Creation of employment is a core mandate of the government which SMEs come in to help.
5. Economic growth.
They increase the country‘s GDP making the economy favourable for local and foreign investors to invest in. A high GDP also translates to better standards of living for the population.
6. Innovation.
SMEs are better able to innovate across various fields leading to improved efficiency and therefore less wastage of resources. Innovation also creates new jobs and products and jobs which are favourable for the economy.
7. Provision of specialized skills.
They provide a pool of specialized skills for the public sector to be trained. SMEs provide a good training ground for professionals in various areas e.g. customer service, marketing etc.
