The OECD backs SMEs

The creation of a new Committee on SMEs and Entrepreneurship by the OECD highlights the organisation’s recognition of the importance of small and medium enterprises and entrepreneurship to our economies and societies, and on the critical role they can play in driving a sustainable, inclusive, green and resilient recovery.

SMEs in OECD economies, and across the globe, represent over 99% of all firms and account for most private sector jobs.  The entrepreneurialism they, and start-ups, embody are important sources of growth and new jobs, and they are often in the driving seat of transformational and innovative change.

But their smaller size can also bring disproportionate challenges in adapting to mega-trends, in accessing finance, in accessing skills and, in particular, in dealing with regulation, as the COVID crisis has well illustrated, and as described in the recent OECD policy note, One year of SME and entrepreneurship policy responses to COVID-19: Lessons learned to “build back better.

These challenges often result in uneven playing fields compared to larger businesses, often reflecting their smaller voice in the policy debate and, in turn, in policy design; especially for the millions of SMEs and aspiring entrepreneurs that don’t tick the high-growth and unicorn boxes but are nonetheless important sources of well-being and social capital.

The new Committee on SMEs and Entrepreneurship will help to level those playing fields and ensure that SMEs and Entrepreneurship have an equal footing in the policy debate.  The new Committee shows the OECD recognises their special challenges and, indeed, their significant potential, and that the OECD intends to be the go-to place for sound and coherent SME and Entrepreneurship policies.

These policies should be attuned to their needs across policy spaces, whether they be tax, environmental, education, innovation, investment, trade, employment, social or industrial policies, where, too often, the SME dimension is lacking.

The initiative – launched by New Zealand last year – attracted strong backing among the 37 member countries, including dozens of letters of support from Government Ministers and international and national business agencies.

OECD Secretary-General, Angel Gurría said the new committee would strengthen the Organisation’s ability to support member countries in their inclusive economic recovery planning.

“SMEs and entrepreneurs hold the key to sustainable and inclusive growth, and as such, they need to be front and centre in the economic recovery,” he said. “The new Committee on SMEs and Entrepreneurship provides the right institutional structure to respond to members’ needs and enhance the impact of this vital OECD work.”