Can SMEs be profitable but also fair, use sustainable resources and be innovative? Is it harder for SMEs than for big companies to create positive impact? Do SMEs or big corporations contribute more for employment and to the SDGs in general? Some of these questions do not have a straightforward answer. But there is quite a clear understanding of current contributions to society.
From around 60% to 78% of the employment creation comes from companies with less than 100 employees. In the opposite direction, larger companies bring the total of employment decline with negative job creation rates from -100% to -330% in countries with job losses. The ranges vary with the income of countries, but the story seems to be basically the same everywhere.
At least 7 of the SDGs would directly benefit enormously if more credit is made available to the smaller companies. Why? From affordable clean energy to education in developing countries, from access to water and sanitization to microfinance, SME’s bring the biggest hopes to the achievement of sustainable development. For instance, Blue Orchard reported a 1.2 Trillion USD potential market for SME’s in the area of clean technology (data from November 2017).
One purpose of my startup, AdvantiKA, is to inspire businesses by sharing stories of successful sustainable businesses. Our event on June 6th, “Making THE Business Case – Fair Fashion Insights”, tells amazing stories of people and companies who dreamed of a sustainable business and made it come true. We also bring tools and information to support companies, especially SMEs, to build their own successful stories.
Here is what my journey and some research made me understand about enabling SMEs to thrive:
- SMEs would make miracles for our sustainable development given more credit and financial lines, such as sustainable tailored funding, crowdfunding, microfinance, angels, etc. It is needed a combined screening process assuring that positive impact is created, and better if the SMEs receiving funds are also benefiting from business and performance education.
- Increase access of SMEs to affordable training, consulting and research and they will know exactly how to make good use of it. They are hungry for this.
- Help developing solutions for the sustainability problems of the SMEs that can be an alternative to expensive certification programs, jointly with a way to tell the right story to the customer in order to create credibility.
- Look for distribution channels that can simplify logistics to SMEs. Collaboration, associations and cooperativities can be a way for that.
- More and more incubators, please! The mechanisms to integrate academia, corporations, investors and experts, providing space, support and technologies to inventors is a must. This is still limited to few “winners” and not always has a governance process in place for positive impact.
- Help education and awareness of the public. The ones deciding what, how much and where to buy have an enormous unused power. The lack of awareness connected to reality in the era of abundant misinformation confuses the public.
If you are a startup, SME or if you want to collaborate on some of these topics, know that AdvantiKA is interested in collaboration too. If you are a SME with a challenge, AdvantiKA would love to help you out!
My message today is: No matter the path you choose, start thinking about less is more, simple is luxury, small is beautiful, mindfulness is practical.