Small and medium enterprises (SMEs) in the GCC region have suffered from the fallout of the Covid-19 pandemic and the subsequent global economic downturn. It is now time to empower entrepreneurs to lead their enterprises to success, especially in the context of net zero and overall national socio-economic goals. A truly inclusive economy will support the growth of small businesses and empower them to make valuable contributions.
According to a report published by the International Monetary Fund in December 2019 (titled Enhancing the Role of SMEs in the Arab World – Some Key Considerations), SMEs in the Gulf countries at the time accounted for 15-30 per cent of their national GDPs, which was behind the global average of 40 per cent in emerging economies.
Small businesses were also among the first to face detrimental impacts of challenges arising from the pandemic and subsequent lockdowns. While we have come a long way as a region to recharge our economies, there is a dire need to empower small business owners so they can reach their maximum potential, not only in terms of output but to support our nations in becoming more sustainable.
Governments across the region have launched a series of initiatives towards sustainability and made progress most notably in the area of renewable energy. Although to move forward, the contribution of both corporations and SMEs is crucial.
The Organisation for Economic Co-Operation and Development (OECD) published a paper in November 2021 that stressed the importance of small businesses as drivers of socio-economic change, their impact on the carbon footprint and also challenges they face with environmental degradation. The paper also pointed out how SMEs are led by entrepreneurs who are innovative and forward-thinking in their overall approach to business, which means they have great potential to make an impact in the realm of sustainability.
Given the tradition of entrepreneurship in the Gulf region, it is no surprise that we have a wealth of ideas with profit-making potential. And while business infrastructure has improved over time, more collaborative strategies from within the private sector can engage owners of small businesses and set them up for success.
Larger private sector organisations can engage with SMEs in industry-wide greening initiatives – whether it is reducing the carbon footprint in their current operations or fostering new ideas that can open new revenue streams and support environment conservation goals.
Strategic partnerships between corporations and small businesses can create synergy and contribute towards industry-wide growth while targeting climate goals.
There is also room for governments to collaborate more closely with SME owners and aspiring entrepreneurs to support them in greening their existing businesses and developing innovative solutions for climate preservation.
Funding is a major area of concern for SME owners. So this is a great time for financial institutions in the region to work with them to develop flexible financing models that see them through various stages of organisational growth.
The greatest asset the GCC region boasts is the youth, a segment of the population that is increasingly educated and driven. There still remains, however, a gap between private sector employers and graduates. Globally, young minds have been instrumental in pushing the movement for climate change. The Middle East should be no exception especially when it is home to bright and capable young citizens.
One way to fill this gap is for small businesses to actively work on job creation with greening goals in mind. Companies can harness fresh young talent through internship programmes that focus on greening and innovation.
Also, SMEs can work with educational institutions to engage with students to encourage an early and continued interest in sustainability in the context of lifestyles and business.
While it is encouraging to know that myriad efforts are under way across the GCC region within the realm of sustainability, there are still ways to go in order to meet net zero emissions. As mentioned earlier, we are still dealing with the fallout from economic setbacks, but the region has come out strong, with both the public and private sectors remaining focused on recovery.
The increasing complexity of the modern world requires multi-faceted approaches for economic inclusion and subsequent growth. GCC countries have a series of strengths – from dedicated governments to innovative entrepreneurs and bright young minds who are capable of leading the region towards a sustainable future.
Proactively collaborating, focusing on greening business and developing innovative solutions while strengthening small businesses will be the way forward to climate safety and ultimately, net zero emissions.