Small and medium-sized enterprises (SMEs) are crucial to economic growth and development. They represent almost 70 per cent of jobs created in OECD countries, making them important players in the world economy. If countries are to achieve the United Nations’ Sustainable Development Goals (SDGs), they must acknowledge the importance of SMEs and the role they can play in promoting inclusive and sustainable economic growth. The work being done towards achieving gender equality is directly linked to the SMEs, as they are responsible for up to 80 per cent of all new jobs, making them indispensable to achieving Goal 5.
While SMEs can be any type of business —from a legal office to a local bakery — they are limited to companies with 500 or fewer employees. They make up for almost 90 per cent of businesses worldwide, and represent 55-60 per cent of developed countries' GDPs. Their annual revenues can vary considerably, but to be considered a SME, they generally should not exceed 50 million euros. In 2016, SMEs comprised 99 per cent of the businesses in the United States alone. Because they are everywhere and can be of any sector, SMEs can be a powerful tool of inclusion for women.
Most big businesses in the tech sector started as SMEs. Uber, Instagram and Facebook are just some of the innovative companies that began small enterprises. While the business of an SME is not necessarily original, they are usually the driving force behind radical innovation. However, without making sure that women are part of the venture from the beginning, their products and services will always be biased and not fully adequate for women. Women must be included in decision-making processes to enable them to participate in the development of the business from the start.
Despite the fact that the number of women working at SMEs has risen in the past years, they still remain largely underrepresented. In Europe, for instance, women account for 52 per cent of the population but only for 30 per cent of entrepreneurs. In the tech sector, the percentage is even lower – women hold fewer than 15 per cent of jobs and leadership positions at tech companies. Many factors contribute to the low representation of women in SMEs. In the past, being solely responsible for care duties was the biggest obstacle. Nowadays, lack of access to funding, negative gender stereotyping and cultural discouragement are among the biggest hurdles.
A diverse environment leads to better products and services, grants access to new and different experiences, and significantly improves businesses’ results. Women’s creativity and entrepreneurial potential are an underexploited source of potential economic growth. Jobs for women in tech SMEs should be further developed.
On this MSME Day, governments, companies and investors should start making women’s inclusion and leadership in SMEs – especially in tech – a priority.
About the author
Lucas Alves is a Junior Communication Officer at ITU. Born in Rio de Janeiro, Brazil, Lucas graduated in advertising in 2014, and worked at a communications agency for two years.
He left Brazil in 2017 to pursue a Master’s degree in sustainability management in Switzerland, which he completed in 2018. His thesis was on smartphones supply chains and their impact on the countries involved.