How Do MSMEs Help Achieving Sustainable Development?
Published on: 29.06.2020
Micro, Small, and Medium-Sized Enterprises (MSMEs) might look small when compared to large companies, but they make a big impact in terms of employment, economic growth, and sustainability. In general, SMEs outnumber big companies while playing a major role in the global economy and job creation, especially in developing countries.
Based on the data provided by the World Bank, SMEs account for about 90 percent of businesses and 50 percent of Gross Domestic Product worldwide. Further calculations from the WB show that SMEs have the potential to provide the 600 million jobs that will be needed to absorb the global workforce by 2030.
MSMEs provide jobs to categories of employees considered vulnerable such as women, youth, old people, persons with special needs or disabilities, etc. In a few words, small businesses have the potential to secure a better future for everyone through decent jobs and economic empowerment.
Sustainable Development Goal 8 – Decent work and economic growth require societies to create conditions that allow people to have quality jobs and employment opportunities for young people. Those are the categories of people, who tend to feel the economic impact of the crisis more strongly.
Target 8.3 Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
Given the important role of small businesses and the need to get them supported by governments and investors, the General Assembly of the United Nations designated June 27th as the MSMEs’ Day. This year, the topic of MSMEs Day was on the impact of coronavirus lockdowns.
On this occasion, the International Labor Organization Director-General Guy Ryder said that seven out of ten jobs are found in self-employment and small businesses and the figures can be even higher in emerging economies. He highlighted that MSMEs everywhere continue to be crucial in creating jobs and need ongoing support in the post-crisis recovery. Hence it is necessary to guarantee that workers can return safely back to their workplaces and every the smallest business must have access to information on health safety.
MSMEs role in achieving the SDGs
They help reduce poverty of disadvantaged groups in rural communities
MSMEs help meet the SDGs related to economic development
Thriving MSMEs help push innovation and education for sustainable development
MSMEs promote gender equality
MSMEs are key to the efforts to achieve environmental sustainability
The role of MSMEs serves as an advocate for innovative financing solutions and entrepreneurship training programs
MSMEs encourage youth and social entrepreneurship
However, they face many challenges such as access to financial resources, lack of capacities and business knowledge, lack of talented and skilled staff, difficulties to adapt to technological challenges.
Do you have an innovative solution that helps increase the capacities of micro, small and medium-sized enterprises in your community? Or do you have a good idea and want to start a business? Take our free online training on entrepreneurship and learn how to be agile depending on your context.
If you’re already running a project or have a business idea, you can join the Citizen Entrepreneurship Competition.