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SME Competitiveness Benchmarking: Be Sustainable

  • Contribute to SDG Goals

    SMEs constitute the overwhelming majority of firms. Globally, SMEs make up over 95% of all firms, account for approximately 50% of GDP and 65% of total employment, when both formal and informal SMEs are taken into account. This amounts to between 420 million and 510 million SMEs, 310 million of which are in emerging markets.

    SMEs also employ a large share of the most vulnerable sections of the workforce, namely less experienced and less educated workers belonging to poorer households, women and young people. While it is well known that larger firms are more productive and pay higher wages than small firms, what is less well known is that the productivity gap between small and large firms tends to be much more pronounced in developing countries than in industrialized countries.

    ITC's SME Competitiveness benchmarking survey is a modular tool with the potential of being used in a variety of contexts related to SME Competitiveness, since it assesses the capabilities of SMEs across a broad but comprehensive set of competitiveness themes. Bottlenecks to competitiveness, and whether they originate from within the firm or the external business environment, can be identified, tracked, and addressed.

    Assisting governments to set up national SME competitiveness data collection exercises enables direct tracking of progress on three key sustainable development goals


    SDG Goal 8: Decent work and economic growth

    UN-SDG-G8

    Closing the productivity gap between SMEs and larger firms is key: it would contribute to GDP growth and lead to higher wages in the low-wage segment of the economy, with positive and equitable distributional effects.


    SDG Goal 5: Gender equality

    UN-SDG-G5

    Women are the cornerstone of most families, communities, and, by extension, economies. In developing countries, they manage the household, take on most of the childcare responsibilities, and play the role of a social safety net. In addition to these responsibilities, many women in many cases run their own businesses to supplement family incomes. When women succeed, the benefits to society are great. They spend more on their family’s health, nutrition, and education, increasing the chance that their children will rise out of poverty and make substantial contributions to society.

    The SME Competitiveness Survey includes a host of gender related questions. Recently, the survey was deployed in partnership with ITC SheTrades, to better understand the bottlenecks faced by women entrepreneurs in Kenya and Indonesia's services sector. The result was two SME competitiveness reports, one for Kenya and one for Indonesia


    SDG Goal 4: Quality education

    UN-SDG-G4

    Young people represent the future of societies and economies. Decent and productive economic opportunities for young people are critical to achieve sustainable growth, development and social stability. The inclusiveness of a country’s growth path can play a pivotal role in empowering young people both economically and socially. Young people are more likely to be unemployed or drop out of the labour force. For those who do find work, greater labour market inequalities, longer school-to-work transitions, and a wider mismatch between their skills and labour market needs has become the norm.

    Creating large numbers of decent jobs for young people is critical for achieving overall development objectives. Data is key to identify specific issues faced by youth across sectors and countries. For this reason, the SME Competitiveness Survey has been used in the context of the Gambia Youth Empowerment Project for the production of the Gambia Strategic Youth and Trade Development Roadmap (2017-2021).

    The Gambia Youth Empowerment Project (YEP) addresses the economic root causes of irregular migration by supporting youth employment and entrepreneurship. The project takes a market-led approach to improving the skills and employability of potential and returning migrants according to demands of the job market and simultaneously creating employment opportunities along Gambian value chains.

     

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