In Europe, SMEs make up 99% of all companies, and provide 67% of employment a much higher percentage of jobs in developing countries.
Research has shown that they generate around 50% of the private sector’s turn over, and that
SMEs contribute at least 80% to the national GDPs.
Yet less than 20% of policies, government investments etc. are made with them in mind. Instead, 80% of all institutional and businesses efforts – including with regards to the definition of target markets and clients by the very same SMEs, are focused on the less than 20% market and capital available through large corporations.
What seems initially easier – after all there is variance to spend thoughts on – looks like an economic gridlock.
Granted, I’m painting the picture very mono-chrome in this instance, but permit me to do it for the sake of the argument in order to illustrate the problems. Because, given the role SMEs play in the national markets, there is no doubt that we need to include them in our reflections of how global markets, economic models and resource distribution and access will shift over the next decades.
For starters, talking about SMEs – what type of companies are we talking about?
While a welder probably can only very difficultly be compared with a hair dresser, they are possibly jumbled in together into one of the following categories:
Among these three categories
Medium SMEs only make up 1% of all SMEs.
Video: The Bureau of Energy Efficiency of India’s Dr Ajay Mathur gave a talk at India’s ‘National Summit on Energy Efficiency in MSMEs’ in July 2012. He said at that occasion ‘ ‘For MSMEs, energy efficiency is a matter of the bottom-line, of survival’
In the risk management and sustainability arena though, it is very difficult to come across any grounded information, resources or even conversations that would extend and be applicable to SMEs (and even fewer if we only look at MSEs – micro and small enterprises).
Despite the huge potential in the market place, education, training and support programmes that leverage the benefits of sustainability usually ignore the majority of organisations due to their size.
Representative, but by far not unique example: LEAD – Leadership for Sustainable Development is a programme that has been around for 20 years, and operates leadership in the sustainability arena in Asia, Africa, Latin America and Europe. However, looking at their pricing options, it is very evident that a) small commercial businesses are not their target clientele – ovre £5,000 for what mostly is online learning is a steep price for a small company with a lot of potential but little resources to pay; b) the potential these small organisations have – including very small charities – to trigger change, is entirely ignored by this fact; c) there is no support for small organisations to help them find alternative funding options to participate.
While I single out this one programme for my knowledge about it, it is however by far not an exception, but rather the rule: The complexity of catering to small organisations, which is due the difficulty of striking a balance between scalability, individualisation and revenue streams, leads most organisations to just plainly discard the market entirely.
For the sustainability discussion this is very bad news, because
SMEs are responsible for 70% of environmental damage,
and usually miss out any benefits that step from sustainability: whether it is on a communications level, in terms of efficiencies, employee engagement or client relationships. Mostly, because SMEs tend usually to be so resources strapped (cash, time, man-power) that it is hard to shift away from ‘how it has always been done’ unless there are clear cost and/or time benefits attached to it.
It is for that reason that SMEs are struggling keeping up to date with environmental legislation.
The interesting thing though is that research has shown that
In SMEs, awareness alone can cut costs by 10%
which has mainly to do with a change in behaviour of employees in order to save resources and optimise their work processes and hence gain efficiency.
What hence is the most effective way forward for ‘upgrading’ SMEs into ‘sustainable SMEs’?
The answer is simple yet compelling: training and knowledge that are targeted, but offer them knowledge they themselves can then hand on to their peers.
SMEs are usually a relevant part of their community, and the change of behaviour needed is one that needs to happen not the least through encouragement by peers. This in turn can only happen if these peers are confident in their knowledge, in their measures, and in their reasons to do what they do, and contribute whatever little they can.
