Small Businesses Change the World
These days, everyone seems to find a way of squeezing words into awkward acronyms. For example, consider: MSME. It doesn’t just slide off the tongue, does it? But, it does make the world a much better, more equitable, and prosperous place.
MSMEs are all around you; these are the small businesses that grow our food, build our roads, sell us our clothes, develop your favorite app that you can’t live without, and (perhaps most importantly) give your community and communities around the globe jobs.
The United Nations has designated Sunday, June 27th, as Micro-, Small and Medium-sized Enterprises Day, but we are going to highlight the importance of small businesses all week, because Building Markets was started to help these entrepreneurs unleash their job-creating potential by connecting them to new customers and capital. And from Afghanistan to Liberia to Turkey and beyond, we believe there is not only a lot to celebrate, but it’s a critical time to draw attention to these enterprises.
While enormous progress has been made to reduce extreme poverty, an estimated 700m people still live on less than $2 a day. That’s 10% of the world’s population. The global pandemic is also expected to add an additional 150m people to this figure. This, along with climate change and conflict, could continue to create mass migrations as people seek better lives and livelihoods.
One of the most important ways to address this challenge is through small businesses, including those owned and managed by refugees.
Globally, small businesses create 86% of all new jobs, and in emerging markets, they are responsible for 7 out of 10 formal jobs. They are incredible drivers of growth, innovation, and broader sustainable change.
So, when the UN, donors, buyers, investors, and you support small businesses, it leads to valuable opportunities for groups that may otherwise be left out. It can also generate significant economic and social returns.
For example, there are about 10 million women-owned formal SMEs across the globe, which represent 30% of all SMEs in emerging markets. Their opportunity also represents an opportunity for existing businesses. Approximately 70% of women-owned MSMEs report being unbanked or underbanked, which is a $300bn opportunity for financial service providers. And in Turkey, Building Markets is working with over 2,200 companies of which 90% are owned by refugees. This network offers buyers a way to diversify their suppliers, which could create jobs and income for both refugees and host communities.
Follow us this week as we spotlight small businesses and their incredible contributions to economies around the world. We believe that ensuring their success can give everyone a chance to thrive.
Photo Credit: James Rexroad