SUPPORTING SMEs THROUGH VOLATILE, UNCERTAIN,
COMPLEX AND AMBIGUOUS SITUATIONS
Volatile. Uncertain. Complex. Ambiguous. Small businesses have experienced all these in the
period commonly referred to as VUCA.
From the conflicts in Syria and Ukraine, the 2008 global financial crisis, to the 2016 Brexit
referendum and the Covid-19 pandemic, businesses globally have suffered the brunt of global
disruptions.
Small businesses have been disproportionately affected due to a lack of business maturity and
shock absorbers to absorb the numerous shocks in the VUCA environment.
According to the World Bank, 90 per cent of businesses worldwide are SMEs accounting for
more than 50 per cent of employment.
In emerging economies, formal SMEs contribute up to 40 per cent of national income (GDP).
The numbers are significantly higher when informal SMEs are included.
In emerging markets, most formal jobs are generated by SMEs, which create seven out of 10
jobs. Based on these statistics, small businesses are not just a part of the economy but a key
driver of the global economy.
However, between February 2020 and April 2021 70 per cent to 80 per cent of SMEs in OECD
countries lost 30-50 per cent of their revenue.
The challenge for most SMEs is inherent in their business structure. Due to their size and
resources, SMEs tend to be reactive with short-term decision-making processes due to the lack
of adequate financial and technical resources, with long-term strategies sacrificed for urgent
and immediate needs.
Financial capital and cash flow also hold back SMEs from funding their operations and scaling
innovation and productivity and most SMEs lack the right talent and capabilities.
Based on this, policymakers have a role to play in these challenging times to build the
sustainability and resilience of small businesses.
One constant thread in the conversations with the SME ecosystem in America during my
current Eisenhower Fellowship has been the role of the small business administration (SBA) in
supporting SMEs.
While the SBA might not be a silver bullet, there is an opportunity to identify areas of
intersection based on lessons learnt over many years.
President Dwight Eisenhower signed the Small Business Act into law on July 30, 1954, creating
a new agency, the US Small Business Administration (SBA).
COMPLEX AND AMBIGUOUS SITUATIONS
Volatile. Uncertain. Complex. Ambiguous. Small businesses have experienced all these in the
period commonly referred to as VUCA.
From the conflicts in Syria and Ukraine, the 2008 global financial crisis, to the 2016 Brexit
referendum and the Covid-19 pandemic, businesses globally have suffered the brunt of global
disruptions.
Small businesses have been disproportionately affected due to a lack of business maturity and
shock absorbers to absorb the numerous shocks in the VUCA environment.
According to the World Bank, 90 per cent of businesses worldwide are SMEs accounting for
more than 50 per cent of employment.
In emerging economies, formal SMEs contribute up to 40 per cent of national income (GDP).
The numbers are significantly higher when informal SMEs are included.
In emerging markets, most formal jobs are generated by SMEs, which create seven out of 10
jobs. Based on these statistics, small businesses are not just a part of the economy but a key
driver of the global economy.
However, between February 2020 and April 2021 70 per cent to 80 per cent of SMEs in OECD
countries lost 30-50 per cent of their revenue.
The challenge for most SMEs is inherent in their business structure. Due to their size and
resources, SMEs tend to be reactive with short-term decision-making processes due to the lack
of adequate financial and technical resources, with long-term strategies sacrificed for urgent
and immediate needs.
Financial capital and cash flow also hold back SMEs from funding their operations and scaling
innovation and productivity and most SMEs lack the right talent and capabilities.
Based on this, policymakers have a role to play in these challenging times to build the
sustainability and resilience of small businesses.
One constant thread in the conversations with the SME ecosystem in America during my
current Eisenhower Fellowship has been the role of the small business administration (SBA) in
supporting SMEs.
While the SBA might not be a silver bullet, there is an opportunity to identify areas of
intersection based on lessons learnt over many years.
President Dwight Eisenhower signed the Small Business Act into law on July 30, 1954, creating
a new agency, the US Small Business Administration (SBA).
