Empowering small businesses for sustainable development
Globally, technology is disrupting business models with start-ups challenging established businesses for market space. This development has equally made many industrial firms adopt linkages that ensure that small businesses are involved in the intermediate process of production. For sustainability, government needs to empower these drivers of the fourth industrial revolution. FEMI ADEKOYA writes
A new research from Dell Technologies stated that the fear of start-ups to the market is propelling innovative companies forward and accelerating the demise of others.
According to the research, some companies are already feeling the pain when it comes to the rapid pace of change in the industry, while over a third of global businesses are unaware of what their industry will look like in three years time.
Indeed, while the global environment brings up new challenges, government’s imposition in terms of rules and regulatory frameworks impose on small and medium enterprises many challenges that larger companies more easily overcome, but small ones cannot.
As Jack Ma, Founder and Executive Chairman of the Alibaba Group and Special Adviser of UNCTAD for young entrepreneurs and small business mentioned, numerous jobs that are considered of relevance today will disappear while business as usual to overcome economic challenges does not apply anymore, thus, necessitating new actions.
To bridge the industrialisation gap, small business operators believe government has a responsibility to make the environment more favourable and sustainable for growth.
Explaining the effect of technology and innovation on the marketing industry, Chief Executive Officer of X3M Ideas, Steve Babaeko said: “It has affected the industry in a big way. This is why you will find that most of the old traditional agencies are not able to be in tune with the current reality of today’s marketing communication ecosystem as they are either shutting down or are on their way out. So, you find out that new agencies that are more vibrant and more in tune with the digital nature of communication today are on the upswing”.
He urged government to address challenges with doing business in the country saying, “It has been challenging. I can tell you the areas where it is hitting our head against the rock. One is infrastructure. If I tell you how much we spend to run our generators, it is a lot of money in a month and of course that will go into how much you are going to charge your customers to be able to remain in business.
“Getting the right human capital to work is another challenge. There are so many people that are unemployed and at the same time, there are so many people that are unemployable because the educational infrastructure that is supposed to provide a whole pipeline of fantastic graduate who are really good in different discipline to be able to come into the industry has since collapsed.
“When you are caught sometimes between the Lagos Internal Revenue Service (LIRS) and Federal Inland Revenue Service (FIRS), it is like being caught between the devil and the deep blue sea with issues of double taxation here and there. Those are still issues we have to address before you can say that you can breathe easy and establish a business.
“My own point of view is that, this is the point where government needs to begin to look at small and medium enterprises (SMEs) and say what kind of tax breaks can they give SMES, because looking at the high rate of unemployment in Nigeria, this is the time to incentivise SMEs for them to be able to employ labour and this is what most advanced countries have done.
“If you look at the American economy, there is statistics that say about 75 per cent of the companies that make up the backbone of the American economy are actually the SMEs. So the blue chip companies account for less than 25 per cent. So how do you drive that SME category, how do you power them up, how do you incentivise them to even want to hire somebody is key. Instead of doing double taxation, this is the time to give tax breaks. I think we are getting those kinds of tax policies wrong a little bit around here”.
While the business as usual mentality needs to be addressed, WTO Director-General Roberto Azevêdo said: “Smaller enterprises bring dynamism, creativity and energy to the economy of every country, but this is particularly true for developing countries. Trade finance is the lifeblood of outward-looking MSMEs”.