October 20, 2021
Introduction
Small Medium Enterprises (SMEs) are the backbone of the economy. It is therefore important to ensure that they receive enough support to ensure that they keep propelling the economy. The ability of an SME to export is key for its expansion. How can countries ensure that SMEs meet internationalisation? In this session, Panellists reflect on sustainable internationalisation of SMEs. Panellists noted that SMEs are the backbone of the economy and they needed to be cherished. Long and short term plans of Multinational Corporations (MNCs) investing in a host country must take into account the local SMEs. They noted that it was important for multinationals to offer support to the SMEs. Panellists noted that in Costa Rica for example, MNCs were offering support to companies in the Information Technology (IT) industry and these companies are able to export after that capacity building. Therefore MNCs are key in internationalisation of SMEs.
Issues to be addressed were:
- What drives FDI and other forms of internationalisation by SMEs?
- What can FDI by SMEs contribute to the development and international competitiveness of home and host countries?
- How can SMEs contribute to global or regional supply chain development via linkages?
- Are the gender, social and environmental practices of SME investors different from the practices of other investors?
- What are the main policy challenges for SMEs? Is there a policy bias towards large companies? If yes, in which areas, and how can they be dealt with? What kind of policy guidance can be provided and what role should UNCTAD play in it?
- What are the main new challenges that SME investors face during the pandemic? What kind of new policy challenges does the pandemic pose for policymakers to support SME investors?
Session Highlights
The Panellists noted the state of SMEs in Cambodia. They said that they are unable to export to other countries. Most just supply local and are small. Access to the market is a big challenge for SMEs in Cambodia. It was also noted that Cambodia’s agro sector is one the weakest sectors. Panellists mentioned that many SME in Cambodia faced a lot of challenges during COVID-19. About 10,000 SMEs were closed permanently despite support from the government.
Panellists noted the need to create platforms where SMEs can collaborate globally. This means improving mindsets, addressing culture. Panellists noted that in the Dominican Republic, they have addressed customs and other regulations to help SMEs. Panellists noted that Interregional trade will thrive on cooperation and innovation. It was also said that there was a need to look into the future for incentives can help promote SMEs. The availability of qualified personnel and training centres to allow training of SMEs which cannot have access was mentioned to be key. In the Dominican Republic there is a need to build more infrastructure to improve investment and access to capacity building.
SMEs require an enabling environment. Panellists noted that MSMEs cannot operate with high inflation, but you may need a general enabling business environment; access to credit and appropriate infrastructure. Trade facilitation policies that streamline border procedures were noted to be crucial by the Panellists. They further noted that there was a need to harmonise policies that dealt with trade facilitation. In this regard, they concluded that there was a need for a consistent policy framework to help businesses grow and expand abroad.
Panellists also submitted that cooperation with other countries is key in terms of trade and investments were crucial. They said this could be enhanced by government institutions. Free of charge services must be available to facilitate business and be extended to SMEs to overcome the hurdles SME face. Government missions must also connect foreign businesses to local businesses.
Opening:
- Isabelle Durant, Deputy Secretary General, UNCTAD
- Barbara Terenzi, President, World Union of Small and Medium Enterprises
On the panel were:
- Peter J. Buckley, Professor of International Business, University of Leeds
- Achim Hartig, Managing Director, Germany Trade and Investment, Germany
- Biviana Riverio, Executive Director, Export and Investment Center of the Dominican Republic, Dominican Republic (ProDominicana)
- Jorge Sequeira, Managing Director, Costa Rican investment Promotion Agency (CINDE), Costa Rica
- Layhy Chhea, Director, SMEs Department, Ministry of Industry, Science, Technology and Innovation, Cambodia
- Edo Offerhaus, Managing Director, NL International Business (NLinBusiness)
- Joginder Singh Juneja, Vice President, WUSME
- Dogad Dogoui, Special Representative, WUSME
- Martin G. Kaspar, Head of corporate development at a German Mittelstands company in the automotive industry, specialist on IPAs and columnist
- Christian Volpe Martincus, Principal Economist, Inter-American Development Bank (IADB)
Moderator
- Yvonne Okwara, Senior News Anchor, Kenyan Television