Global research by Sage, a business software solution provider has highlighted that only 33 per cent of small businesses feel represented by politicians in their countries’ decision making.
In the report, Sage Chief Executive Officer, Stephen Kelly, also lamented the absence of small business issues from the agenda in global discussions and called for greater representation, given that in most economies entrepreneurs, or business builders, create two-thirds of all jobs.
The report was published in the run up to the annual World Economic Forum (WEF) where politicians and big business will gather in Davos to debate the global economic picture. The research measured sentiment of small businesses in 2016, showing that majority (58%) consider the wider global economy to be less stable and (69%) either have or are considering changing their business plan as a result of recent events. Furthermore, it stated that 22 per cent of businesses were planning to export more in 2017, 10 less and 25 per cent felt there would be no change.
In addition, it showed that 31 per cent of businesses thought turnover will remain constant or remain the same over the next year, stressing that the role of government in helping navigate uncertain economic and political times will be key.
Almost half (46%) singled out export opportunities and grants as being the most important thing that the government can now do. The second most important was improvements to the tax environment (38%), while good local services ranked third (26%).
In his contribution, the Managing Director and Executive Vice-President, Africa & Middle East at Sage, Anton van Heerden said: “We’re seeing an uptake of entrepreneurial drive throughout the African continent, with many people starting out on their own to build businesses that serve the community, create jobs, and raise income levels. Sometimes, this demands great financial and personal sacrifice on their part.
Continuing, Kelly, said: “Only too often when the world’s policy makers discuss the global economic picture, small businesses are excluded from the discussion. This is most evident with the annual World Economic Forum in Davos where small businesses aren’t an item on the agenda. Worse still, 60 per cent don’t even know the event is taking place. It’s crazy when you consider that small businesses create two thirds of all the jobs in most economies, and represent over 98 per Ce r of all businesses.
“Business builders are the heroes of the economy. They toil away long after the rest of us have gone home, making personal sacrifices to grow their businesses, to support their families and build their communities. Policy makers and big business must wake up to the fact that these heroes need to be supported and given a voice, if we are to ensure the future health and prosperity of the world’s economy.”
Small and medium scale enterprises (SMEs) play a major role in most economies, particularly in developing countries.
SMEs contribute up to 45 percent of total employment and up to 33 percent of national income (GDP) in emerging economies, according to a report by the World Bank.
These numbers are significantly higher when informal SMEs are included. According to estimates, 600 million jobs will be needed in the next 15 years to absorb the growing global workforce, mainly in Asia and Sub-Saharan Africa. In emerging markets, most formal jobs are with SMEs, which also create four out of five new positions. However, access to finance is a key constraint to SME growth, as without it, many SMEs languish and stagnate. Indeed, SMEs are less likely to be able to secure bank loans than large firms; instead, they rely on internal or “personal” funds to launch and initially run their enterprises.