The world is at a tipping point. The levers and conventional wisdom that undergirded the 1st, 2nd, and 3rd Industrial Revolution no longer apply. A paradigm shift is underway and the pace of this shift is causing developed and emerging economies alike to be shaken.
The world also has an employment problem. Good jobs are not being created at the pace needed to keep with the growth of the global population. Large businesses are no longer a big part of net-new employment. Innovation and entrepreneurship has shifted to MSMEs. The gap between large companies and SMEs is exceptionally large and growing. Only constructive and inclusive policies can help make both large and small businesses contribute to overall growth.
For the first time ever, ICSB convened a summit on “Create a Shared Future for Entrepreneurs and Micro-, Small and Medium-Sized Enterprises in the Framework of the UN Sustainable Development Goals.” The broad mix of government leaders, small business owners, university administrators, and academics presented unique insights into why MSMEs policy is at a crossroads and the world economy is at juncture.
In Egypt for example, there is national focus on supporting SMEs. In the past, there was lack of attention where over 90% of all companies are SMEs, which provide 75% of the jobs. Her Excellency, Sahar Nasr, Minister of Investment and International Cooperation for the Arab Republic of Egypt spoke of how in the past, this segment had to grow and expand without coordinated organizational or government support.
Inclusive growth must address the disparities of participation based on gender and youth. Lise Kingo, CEO & ED, UN Global Compact, announced the launch of a global academy to support women entrepreneurs and small business owners. With this initiative, many obstacles remain. According to her data, barriers to women in business have resulted in ownership of less than 1% of businesses. Closing the gender gap and providing women with equal opportunities is vitally important.
There was also those who advocated for the promotion of awareness of the importance of SMEs, and the creation of centers for innovation for the young. These centers would provide consultation services, workshops, training, and research.
It was pointed out that the there are similarities between the transformation of society brought about by the industrial revolution and today’s new economy. Combining SMEs and technology should be recognized as the key to strengthen productivity and transformation of the economy.
Technological innovations should be embraced as part of the solution for MSMEs to increase productivity and focus on job creation. Developed countries are also exploring the possibility that we may need to revisit the concept of the digital universal basic income as human jobs are replaced by machines. It was noted that while we may treat human capital as other capital, human capital should not depreciate over time. We need to support an evolved educational system with the private sector driving training.
The human aspect of MSMEs cannot be underestimated, and we need to develop guiding principles about human behavior. The concept of Humane Entrepreneurship presents a new way of how employee and employer can work together more efficiently and sustainably.
Happiness in the end is more important than the simple fulfillment of physical needs. People are more willing to participate in entrepreneurship in their local communities and contribute to a sustainable world.
ICSB is heading to Cairo, Egypt for the 64th World Congress.
Time to bring together the world.
Dr. Ayman El Tarabishy
Executive Director of the International Council for Small Business (ICSB)