In addition to being a global health crisis, the COVID-19 pandemic has unleashed extensive socio-economic impacts, putting millions of companies worldwide at risk of being forced out of business. The crisis has hit small businesses — classified as micro, small and medium-sized enterprises (MSMEs) — and their workers particularly hard. Now, they urgently need support to survive. Many Governments and multinationals are taking extraordinary steps to minimize the negative impacts of the novel coronavirus on business operations and workers, but much more action is needed.
In response, the International Chamber of Commerce (ICC) has launched a Call to Action to Save Our SMEs “SOS” campaign to:
Shine a spotlight on the devastating impact of COVID-19 on SMEs and their employees
Ensure effective policy and fiscal responses at both the international and national levels
Provide resources and tools to SMEs to help them navigate this economic shock
At the same time, the United Nations Global Compact has shared a special appeal #UnitingBusiness around a corporate response to the COVID-19 pandemic: for all companies to take collective action to stem the outbreak through implementing our Ten Principles in the areas of human rights, labour, environment and anti-corruption. The appeal calls for special attention to MSMEs — encouraging companies to respond with flexibility, compassion and solidarity to the impact on MSMEs and to honour current contracts to the greatest extent possible. Engagement with suppliers is essential to ensure decent working conditions in global supply chains while providing support for business continuity by allowing flexibility in delivery and quotas.
John W.H. Denton AO, Secretary-General, International Chamber of Commerce
Dorothy Tembo, Interim Executive Director, International Trade Centre
Murtaza Ahmed, Managing Director and owner, Artistic Milliners
Peter Ndegwa, Chief Executive Officer, Safaricom
What did we learn?
The current crisis is not a replay of the financial crisis we had more than 10 years ago – now we are experiencing an attack on the real economy, on MSMEs and the informal economy.
Policy makers need different tools and policies now to support enterprises which we need to adapt as situations evolve over time and will differ per region. There will be no one-size -fit all solution as different categories of businesses will need different support measures.
MSMEs, which comprise 90% of companies across the globe and more than 50% of the world’s total employment, are both heavily exposed to the disruption and critical to the recovery. By enabling MSME participation in international trade we have an opportunity to limit economic losses, protect jobs and set strong foundations for renewed economic growth. MSMEs should be empowered for recovery.
The biggest challenge that SMEs experience today is access to finance, which was already a challenge for many small companies before this crisis started.
Governments and supply chain leaders have a key role to play to support MSMEs: governments should issue stimulus packages and multinationals should pay on time their suppliers, should not cancel any orders and should plan better for the future. It is crucial that strong supply chains are preserved.
MSMEs are very vulnerable in Africa but are crucial for the economy – MSMEs reach the people on the ground, including the informal economy.
The crisis may also create potential opportunities for MSMEs in the way of mobile solutions for e-commerce. Digitalisation and technology can support MSMEs.
We need to support both job creation and sustainability as the SDGs are still relevant and sustainability is not an option but a necessity. Purposeful decisions and structural changes are needed. The recovery will be a massive opportunity to remodel business, to be inclusive and to leave no one behind.