Concerns about growth in countries like the United States and China are a distraction from the importance of enabling small- and medium-sized enterprises to be part of a more sustainable global economy, according to the chief executive of Kuwaiti logistics company Agility.
Most nations would be happy to have the 6.6 per cent growth rate that China achieved last year, said Tarek Sultan in Davos at the World Economic Forum annual meeting. On the eve of the gathering, China reported that 2018’s rate of growth was its slowest since 1990.
However, the discussion about how to shape the future of globalisation needs to shift instead to the SME sector, which is typically the engine of growth for any economy.
This year in Davos, where 3,000 officials, chief executives and experts are taking part, the theme is "Globalisation 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution". The forum wants to help create a more inclusive future in the wake of rapidly shifting technology and an increasingly fragmented political landscape in developed countries.
Supporting SMEs to participate more globally can be part of shaping a more inclusive and sustainable future, Mr Sultan said.
“There is a tremendous opportunity for SMEs to participate in the global economy," he said. "What holds them back is the complexity of navigating across borders. You could almost see this complexity as something that gives large companies an unfair advantage.”
Political upheavals such as Brexit, US-China trade tensions and the partial government shutdown in Washington do not matter to SMEs if they “have a clear business opportunity” to sell their products and services at a profit.
Rather, SMEs are being “psyched out” by the potential unknowns of cross-border trade, such as hidden fees or unforeseen customs duties.
“One of the issues that we have here in Davos is too much attention is put on large companies and their problems. Now, large companies are going to be crying about US and China trade issues. It’s not really the end of the world. Who is talking about the SMEs?” Mr Sultan said.
He suggested that SMEs should be “given a seat at the table” when discussing trade.
“It is tough to get SMEs all together in a room because they are so nebulous. You are talking millions and millions of potential SMEs around the world but there’s got to be a voice always to prioritise SMEs.”
In the Arabian Gulf, where Agility operates, it is also challenging to engage with SMEs in a meaningful way. Digital channels offer the most effective communications route, Mr Sultan said. However, it is still a “trial and error” process to reach them.
Last month, Agility said it will invest $100 million in a digital logistics platform that allows small businesses and entrepreneurs to manage their freight and deliveries online.