The global pandemic is transforming the social and economic landscape of economies around the world, and without a clear strategy that enables and encourages small and medium-sized enterprises (SMEs) across Eurasia to adopt Fourth Industrial Revolution technologies (4IR), economic recovery will not be sustainable.
Since the beginning of the crisis, 75% of global SMEs have been forced to let employees go, whilst 70% have seen revenues fall and 40% suffer from liquidity issues as a result of the pandemic, according to data from the Organisation for Economic Co-operation and Development (OECD). Whilst the situation appears grim, experts believe that SMEs must maximize their ability to be flexible by embracing digitalization and cutting-edge technologies in order to enable an inclusive and sustainable recovery.
The COVID-19 crisis has negatively affected the economic integration of SMEs on both a regional and global level, says Taras Kachka, Deputy Minister for Development of Economy, Trade and Agriculture of Ukraine.
“SMEs are the key drivers of regional economic growth, but the lockdown measures put in place in every country has impacted their ability to produce, trade and serve their communities as supply chains were disrupted,” adds Kachka. “To ensure recovery is sustainable and given that this virus isn’t going away anytime soon - there is a balance to be struck between adhering to lockdown measures to prevent the spread of the virus and supporting economic activity. The movement of goods between markets should be supported, as should protecting employment – these were the main lessons we learnt in Ukraine during the height of the crisis.”
“SMEs are more vulnerable to shocks such as COVID-19 than big businesses and therefore, the pandemic has shown how important digitalization has become for protecting the stability of our economies,” adds Maja Tomanic Vidovic, Director of the Slovenian Enterprise Fund. “The pandemic forced businesses to change how they interact with customers and suppliers, and to do this, digital transformation was made necessary overnight. Once the crisis passes, it is vital that governments put in place programs to support digital development and innovation not only to survive but to emerge stronger from this crisis. Financial support is critical, but the focus should be on close cooperation and exchange of information and building partnerships, knowledge and skill development that will deliver a sustainable future.”
Capacity building in terms of upscaling and upskilling women throughout the SME workforce is vital to helping economies foster entrepreneurialism and ignite job creation, adds Naira Margaryan, Deputy Minister of Economy of the Republic of Armenia.
“The recovery process could become a transformative platform for the inclusion of women and young people in the manufacturing sector,” she adds. “Although the crisis has been devastating for some, for other businesses, it creates new employment and self-employment opportunities. In Armenia, we are seeing women embrace this as an opportunity to step up, so to support their efforts, we in the government are working to provide better access for women to enter business networks and supporting capacity and skill-building, particularly in the manufacturing sector.”
“The main challenge is to prevent any loss of industrial production but to do this, we need to map out the impact of the pandemic on individual sectors and countries to identify where support is needed the most. Until now, much of the business community’s response to the crisis has been on a local level. This approach will not deliver a sustainable recovery. To do so, we need to draw these efforts together, to form a network across Europe and Asia to build cohesion and a multiplier effect,” says Milena Angelova, Vice President of the European Economic and Social Committee in charge of Budget for the mandate of 2018-2020, and the Secretary-General of the Bulgarian Industrial Capital Association (BICA). “The European Union has already begun this endeavor with the ambitious recovery strategy outlined in March, which including unprecedented and ambitious financial and solvency support mechanisms, along with pledges to contribute educational and skills support in the form of innovation hub and facilitation of the free movement of data.”