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A Symbiotic Relationship Linking TRIAD Based MNEs and SMEs

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There is a symbiotic relationship linking TRIAD based MNE’ s and SME’ s in low-cost economics whereby MNE’ s are perceived as potential partners on economic growth and expansion of trade linkages and thus welcomed and supported by the local SME’ s through supply networks and other business cooperation mechanism. As a matter of fact, the relationship involving SME’ s and MNE’ s has been bolstered by governments and other trade agencies in low-cost economies who have realized the huge potential of trade linkages involving the two. Therefore, low-cost economies have laid several incentives in place for MNE’ s to cooperate with SME’ s creating a dynamic liaison that is beneficial to trade.

Attracting MNE’ s particularly those with manufacturing plants has become the focus of most local economic development agencies that endeavor to promote an enabling environment for the respective MNE’ s due to the many benefits associated with MNE activities in local businesses. Apart from the creation of job opportunities in low-cost economies, MNE’ s have been identified and credible agents in the development of strategic clusters in low-cost economies that could spur economic development. More particular has been the fact that MNE’ s can augment the development of SME’ s in low-cost economies through purchasing inputs and material components thus creating a niche for local businesses.

The connection involving MNE’ s of TRIAD and SME’ s of low-cost economies are primarily based on the opportunities for growth and expansion that SME’ s can obtain from MNE’ s. This is primarily because in today’ s modern age globalization is the way to go for local businesses and that this is not possible without the necessary linkages between MNE’ s who are already global and have capacity and SME’ s who still need support to nurture their businesses to the global stage (Walker et al, 2007, 24-34).

As a result, MNE activity is incidental to the rise of SME’ s on the worldwide stage because TRIAD based MNE’ s call the shots in the global business environment.

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