Thu, Dec 01, 2005 - Page 10 News List

Micro businesses need help to add value, study shows

CNA , TAIPEI

Micro businesses are the backbone of the economy and the government should provide them with adequate assistance in creating more added value, according to an analysis published by the Ministry of Economic Affairs.

In 2001, the nation had about 720,000 micro businesses -- defined as businesses employing fewer than five workers -- around Taiwan, accounting for 77 percent of the country's total enterprises, according to an analysis by a Chung-Hua Institution for Economic Research (中經院) researcher that was published last week by an electronic newspaper operated by the ministry's Industrial Development and Investment Center.

Nearly 1.33 million people were employed by micro businesses, accounting for 20 percent of the nation's employees in the trade and business service sectors in 2001, the analysis reported. Added value produced by micro buusinesses accounted for only 12.06 percent of the total value generated by all companies, while their output value made up only 8.3 percent of the business community.

There were 208,000 middle-sized companies in Taiwan in the same year, or 22.2 percent of the total, while there were only 7,261 large enterprises, accounting for 0.78 percent.

Although micro companies have long and widely been viewed as labor-intensive and non-mainstream businesses that require much lower thresholds to start and maintain, the analysis said that it is wrong to view micro businesses as lacking "innovation" or "knowledge," on the grounds that "low business revenues do not necessarily mean slim profits."

Some micro businesses are more capable of earning handsome profits than big companies, and the government should come up with more measures to assist them, the analysis suggested.

Quoting a national census, it pointed out that micro firms are usually more profitable than other business types, except for those in the mining, gas and electricity and restaurant sectors.

In most of the sectors, micro businesses can provide valuable and unique services more quickly, based on knowledge, technique and quality, making them capable of creating higher value-added profits on a small-business scale, according to the analysis.

Micro businesses are more likely to create greater added value once they find out where their advantages are in the market, it concluded.

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