Small new businesses are the largest contributor to job creation in Jordan

24 May 2011

Amman – Micro, Small, and Medium-sized Enterprises (MSMEs) account for 37% of total employed and 60% of total employment in the private sector in Jordan, spotlights Jordan Human Development Report 2011 launched here today under the patronage of HRH Princess Basma bint Talal, the Honorary Human Development Ambassador for the (UNDP). It shows while MSME’s do contribute toward development in Jordan through employment and empowerment, their contribution can and should be expanded.

The 2011 Report titled – Small Business and Human Development – examines the role of MSMEs in human development in Jordan. MSMEs comprise 99.6% of all firms outside the agricultural sector. A primary focus has been the analysis of the role of MSMEs within the framework of human development, composed of the four main pillars: economic growth that is, inclusive, equitable and pro-poor; social progress; participation and freedom; and environmental sustainability. Further, the Report utilizes the competitiveness framework popularized by Michael Porter to evaluate the activities of these enterprises.

For the purposes of this report a Technical Committee made up of relevant experts from across Jordan defined small enterprises as those with less than 20 employees, and medium enterprises as those with between 20 to 99 employees.  Micro-enterprises were defined for the purposes of this Report as enterprises that benefited from micro-finance initiatives.

The analysis of the report is based upon a questionnaire distributed to 1,500 SMEs and 113 micro enterprises to generate primary data in addition to secondary and macro data, international rankings and best practice to provide a comprehensive view of the impact of MSMEs on human development in Jordan.

The analysis and recommendations are quite detailed and specific in that they address each aspect of the competitiveness and contribution of MSMEs. Consequently, a precise view of the multifaceted aspects and contributions of MSMEs to the sustainable human development drive in Jordan is generated, and relevant, locally driven recommendations on the role of MSMEs are made within the globally established pillars of sustainable human development.

The Human Development Index (HDI) measures a country’s average achievements in three basic aspects of human development: Longevity, knowledge and a decent standard of living. In the 2010 Global Human Development Report Jordan’s HDI level measured at 0.681, thus placing it 82nd out of 194 nations worldwide and 8th among the 17 Arab countries for which an HDI has been developed. 

 The Human Poverty Index (HPI-1), which measures the human deprivations in the same aspects of human development as the HDI has a   value of 6.6%, giving Jordan a rank of 29th among 135 countries for which the index has been calculated. In terms of HPI-1, Jordan went from 9.8% to 6.1% in 2006; and 6.6% in 2009, thus, showing an improvement.

Jordan Human Development Report 2011 is a joint product of the Ministry of Planning and International Cooperation and the United Nations Development Programme. The report has been reviewed by International Peer Reviewers on Human Development, and a national Reading Committee representing all relevant institutions.