Policymakers need to adapt policies and institutions to enable small businesses to make a greater contribution to post-pandemic economic revival.
Micro, small and medium enterprises (MSMEs) can power a stronger recovery from the COVID-19 pandemic, due to their innovative and opportunity-seeking nature, but they need more support.
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Participants at the 7th edition of the Empretec Global Summit held online on 20 April heard that policymakers need to adapt policies and institutions to support MSMEs.
Such support should be aligned with the priorities of the post-COVID-19 social and economic recovery, said UNCTAD Acting Secretary-General Isabelle Durant.
“Short-term support measures such as relieving tax burdens on MSMEs, extending debt finance and employment support are certainly needed and should be continued,” Ms. Durant said.
“Yet at the same time, it’s important to invest in long-term structural policies, such as digital and financial inclusion, as well as entrepreneurial skills capacity development,” she added.
Backbone of global economy
MSMEs constitute the backbone of the global economy, accounting for two-thirds of employment globally and between 80% and 90% of employment in low-income countries.
At the same time, they are disproportionately affected by pandemic-related shocks. They are overrepresented in non-essential services sectors hardest hit by confinement measures. Many MSMEs have suffered huge revenue losses while others have shut down.
MSMEs’ smaller size allows them to be flexible and adapt to new environments such as the one created by COVID-19.
Not only can they help overcome previous constraints related to lack of productive capacities and economic diversification in many low-income countries but also enhance a strong and sustainable recovery.
Unleashing entrepreneurial potential
The summit’s participants shared good practices on enhancing the role of entrepreneurship and MSMEs, with a special focus on UNCTAD’s Empretec programme, which relies on a unique behavioural approach for entrepreneurship capacity development.
UNCTAD’s head of enterprise, Tatiana Krylova, said the Empretec methodology aims to identify, then unleash the personal entrepreneurial potential of each participant of the programme through behavioural change.
This includes assessing individual differences in a person’s desire to achieve excellence in entrepreneurship and fostering capacity through an interactive training approach. She said Empretec is a “4U” programme – “unleashing, unique, universal and uniting.”
Ms. Krylova said: “During the pandemic, Empretec has continued proving itself as one of most impactful means to facilitate and boost entrepreneurship.”
She encouraged more entrepreneurs and MSMEs to join the programme in their respective countries to facilitate their contribution to post-COVID-19 recovery in the MSME sector.
How countries are supporting small businesses
Nigeria’s minister of state for industry, trade and investment, Mariam Katagum, said her country is supporting MSMEs through grants to address their financing needs.
“Supporting entrepreneurs and small businesses by creating opportunities for MSMEs to thrive is essential for increasing productivity, creating jobs and boosting our economy,” Ms. Katagum said.
She said Nigeria recently revised its national policy on MSMEs to strengthen their resilience in the face of the pandemic, adding that more policy frameworks were in the pipeline to support startups in the digital economy.
Other high-level panelists related good practices and lessons learned from Angola, Argentina, Brazil, Ghana, Saudi Arabia and Uruguay, noting Empretec’s important contribution in their respective countries.
“Empretec is undoubtedly a transformative experience, a milestone in the lives of many,” said Bruno Quick, the technical director of Brazil’s micro and small business support service agency, SEBRAE.
Amid the pandemic, he said, the programme has continued to prove that through entrepreneur behaviour, it’s possible to promote entrepreneurship and help small businesses find opportunities in high-risk environments.
The event included an interactive session with entrepreneurs from the Empretec network, who shared their success stories during COVID-19 pandemic.
“COVID-19 caused us heavy losses because we couldn’t access our farm due to movement restrictions,” said Bosun Solarin, who runs Dasun Integrated Farms Ltd, an agroprocessing firm in Nigeria.
She explained how she adapted to the new normal after the pandemic by tapping into digital technologies and creating demand for her products.
Brazil’s Agda Oliver said during the country’s lockdown women in business were significantly more affected than men. She emphasized the importance of personal entrepreneurial competencies cultivated by the Empretec programme in boosting her resilience.
The summit also saw Empretec directors and graduates from Angola, Benin, Dominican Republic, Nigeria, Romania and Russia explain how the Empretec methodology helped them emerge stronger from the pandemic.