International Frameworks

International Frameworks and Legal Mechanisms Supporting the Transformation From Sick To Skilled Smes

Introduction

SMALL AND MEDIUM ENTERPRISES (SMEs) are highly vibrant and dynamic sector of the economy, as it not only plays a crucial role in providing large employment opportunities at comparatively lower capital cost than that of the large industries but also helps in industrialization of rural areas. Apart from SMEs being complementary to large industries it also contributes enormously to the socioeconomic development of any country. But, with growing industrialization, the incidence of industrial sickness has also been on the rise, especially in the small and medium enterprises. The term ‘Industrial Sickness’ has become a buzz-word at present in industrial sectors, which is one of the major socio-economic problems of many developed countries and particularly in the developing countries. It has become a matter of concern for the investors, shareholders, entrepreneurs, policy makers and the governments also. A sick industry is one whose financial viability is threatened by adverse factors. We can say that an industry is sick if it cannot continue its normal activities, suffers continuous losses or if gradual depletion of its capital starts. If industries become sick, it brings down adverse effect on the economy and as a result social and economic problem of various dimensions surfaces. To combat this failure, it is necessary for countries and organizations to identify revival strategies. And one of the most effective revival strategies can be infusion of international investment with better international regulations and policies. 

1. INTERNATIONAL INVESTMENT has been a major boon to the global integration process, by increasing the capital gain, with enhanced labor market, raising wages and increasing capital productivity both in the recipient as well as the investing countries. It has grown considerably in importance in countries like India and other emerging economies with both the home and the host country being the mutual beneficiaries.

2. But with fierce competition in the global market and the economic crisis still looming large, small, and medium enterprises are suffering globally and are not able to derive the benefits of international investment.

3. In this research work, I’ll try to find the methods and ways to integrate the two, while analyzing briefly all the possible aspects involved. So that a mechanism can be evolved to make a transformation from ‘the disadvantage’ to ‘advantage’, from ‘losing to winning’

4. and which can eventually result in a ‘turnaround’.

Research Question:

Can International legal instruments and a complementary national regulatory and policy
environment produce viable and profitable ‘turnaround’ mechanisms for Small and Medium ‘Sick Industrial Companies’ in order to turn them into ‘Skilled’ enterprises?

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