It is important to formulate a clear strategy to support and enable small and medium sized enterprises (SMEs) across Eurasia to imbibe Fourth Industrial Revolution (4IR) technologies so as to have a sustainable economic recovery during global pandemic times that are transforming socio-economic structure of world.

Ever since the Covid-19 pandemic began almost 75% of global SMEs have had to let go the employees. Furthermore, 70% have had fall in revenues and 40% have experienced liquidity issues, according to OECD data. Though the situation looks grim, experts on latest Digital Series from the Global Manufacturing and Industrialization Summit #GSIM2020 say that SMEs must increase their flexibility of adopting digitalization and cutting edge technologies to ensure a sustainable recovery.

Participating experts in the discussion included Taras Kachka, Deputy Minister for Development of Economy, Trade and Agriculture, Ukraine; Naira Margaryan, Deputy Minister of Economy, Republic of Armenia; Maja Tomanic Vidovic, Director of the Slovenian Enterprise Fund; Milena Angelova, Vice President of the European Economic and Social Committee and Secretary-General of the Bulgarian Industrial Capital Association, BICA; and Jacek Cukrowski, Chief Regional Coordination Division for Europe and Central Asia, United Nations Industrial Development Organisation, UNIDO. The panel agreed on importance of building up digital ecosystems that can operate across borders and overcome any future lockdowns. To ensure this teg experts are calling on the governments to cooperate and work together to offer all-round support to SMEs through training and upskilling the employees.

Taras Kachka, Deputy Minister for Development of Economy, Trade and Agriculture of Ukraine said, “SMEs are the key drivers of regional economic growth but the lockdown measures put in place in every country has impacted their ability to produce, trade and serve their communities as supply chains were disrupted. To ensure recovery is sustainable and given that this virus isn’t going away anytime soon - there is a balance to be struck between adhering to lockdown measures to prevent the spread of the virus and supporting economic activity. The movement of goods between markets should be supported, as should protecting employment – these were the main lessons we learnt in Ukraine during the height of the crisis.”

Maja Tomanic Vidovic, Director of the Slovenian Enterprise Fund discussed financial struggles faced by SMEs across Eurasia. “SMEs are more vulnerable to shocks such as COVID-19 than big businesses and therefore, the pandemic has shown how important digitalization has become for protecting the stability of our economies. The pandemic forced businesses to change how they interact with customers and suppliers, and to do this, digital transformation was made necessary overnight. Once the crisis passes, it is vital that governments put in place programmes to support digital development and innovation not only to survive but to emerge stronger from this crisis. Financial support is critical, but the focus should be on close cooperation and exchange of information and building partnerships, knowledge and skill development that will deliver a sustainable future.”

Naira Margaryan, Deputy Minister of Economy of the Republic of Armenia said, “The recovery process could become a transformative platform for the inclusion of women and young people in the manufacturing sector. Although the crisis has been devastating for some, for other businesses, it creates new employment and self-employment opportunities. In Armenia, we are seeing women embrace this as an opportunity to step up so to support their efforts, we in the government are working to provide better access for women to enter business networks and supporting capacity and skill-building, particularly in the manufacturing sector.”

Milena Angelova, Vice President of the European Economic and Social Committee in charge of Budget for the mandate of 2018-2020, and the Secretary-General of the Bulgarian Industrial Capital Association (BICA) said, “The main challenge is to prevent any loss of industrial production but to do this, we need to map out the impact of the pandemic on individual sectors and countries to identify where support is needed the most. Until now, much of the business community’s response to the crisis has been on a local level. This approach will not deliver a sustainable recovery. To do so, we need to draw these efforts together, to form a network across Europe and Asia to build cohesion and a multiplier effect. The European Union has already begun this endeavour with the ambitious recovery strategy outlined in March, which including unprecedented and ambitious financial and solvency support mechanisms, along with pledges to contribute educational and skills support in the form of innovation hub and facilitation of the free movement of data.”  

The panel which is named ‘Industrial recovery in Europe and Central Asia: Accelerating digital transformation for MSMEs’ explored the possibility that Europe and Central Asia, particularly the Western Balkans, South Caucasus and Central Asia, might face the biggest remittances slump due to Covid-19. The World Bank too has projected a fall of around 28% in 2020.

Jacek Cukrowski, Chief of Regional Coordination Division for Europe and Central Asia, UNIDO was the session’s moderator. He concluded saying “Small and medium sized enterprises are the backbone of the regional Eurasian economy. Ensuring their resilience is key to creating a more inclusive and resilient, human-centered future and a thriving global economy.”

WAM