A new report launched by the World Economic Forum, co-authored by Cambridge Judge PhD student Ariel de Fauconberg, outlines how small- and medium-sized enterprises (SMEs) can best position themselves to be ‘future-ready.
A new report launched by the World Economic Forum, co-authored by Cambridge Judge Business School PhD student Ariel de Fauconberg, outlines how small- and medium-sized enterprises – which represent about 90% of all firms globally and provide 70% of all employment – can best position themselves to be “future-ready.”
SMEs by some estimates contribute up to 70% of global GDP, so the report seeks to develop a deeper understanding of the organisational capabilities and orientations needed for SMEs to generate lasting financial growth, achieve agility and resilience in a rapidly changing environment, and to affect society and the environment positively. It is based on an in-depth analysis of more than 200 peer-reviewed articles and the insights of more than 300 CEOs and founders of SMEs with annual revenues of up to $500m.
The top challenges cited by SME executives include talent acquisition and retention (52.5%), survival and expansion (43.8%), funding and access to capital (35.7%), non-supportive policy environment (21%), and the difficulty of maintaining a strong culture and clear company purpose and value (20%).
“Our global assessment showed no significant differences of future readiness of SMEs at the regional or the industry level,” the report says. “The key takeaway from these results is that SMEs are neither disadvantaged by their geographical location nor industry space in moving towards future readiness. What can set them apart is their ability to influence their internal processes (orientation and business model) and immediate external environment (networks) to ensure they remain future-ready.”
In a foreword to the 42-page report, World Economic Forum President Børge Brende says: “While interest has mostly focused on how large corporations contribute to the global economy and sustainable development objectives, small- and medium-sized enterprises (SMEs) are only occasionally acknowledged and often overlooked as major drivers of economic activity, as well as social and environmental progress around the world.
“This report aims to deliver a global assessment of the future readiness of SMEs and provide an understanding of the drivers of future readiness. It is hoped this will inspire and encourage SMEs and mid-sized companies to harness their potential in becoming a major driver of sustainable and inclusive economic growth and innovation by focusing on several core dimensions of future readiness: sustainable growth, societal impact and adaptive capacity. We also hope it will bring additional insights to policy-makers in a context in which SMEs represent a key element of the post COVID-19 recovery.”
The report is entitled Future Readiness of SMEs: Mobilizing the SME Sector to Drive Widespread Sustainability and Prosperity. Lead authors are Rashimah Binte Rajah, Lecturer at the Department of Management & Organization, National University of Singapore Business School; Ariel de Fauconberg, a PhD student in the Organisational Theory and Information Systems group at Cambridge Judge Business School; and Olivier Woeffray, Practice Lead, Strategic Intelligence, at the World Economic Forum.