MSME development and the Sustainable Development Goals

MSMEs have the potential to contribute to the SDGs. As businesses that operate in so many sectors, in manufacturing, agriculture, tourism, services, and also as agile innovators discovering new ways of doing business, there are many different ways for MSMEs to further the cause of sustainable development. This section provides some insight into why MSMEs are relevant to the SDGs, and how MSME policy can enhance the contributions of these smaller businesses. Figure 1 illustrates the SDGs.

Policymakers in any given area that are striving to meet a country’s commitments to the SDGs can consider how MSME development issues will align with the SDG in question. The SDGs are transformative, and to meet them businesses will need to discover ways to do business differently. Furthermore, as larger scale changes take place around them as a result of countries’ commitments to sustainable development, MSMEs will need to adapt to more sustainable ways of doing business. Even policymakers that do not generally focus specifically on MSME issues may need to consider the effects of their SDG-related policies on MSMEs, or could benefit from knowing how MSMEs can contribute to a more sustainable world. According to the Business and Sustainable Development Commission, sustainable business models could open economic opportunities worth $12 trillion and create 380 million jobs by 2030, with more than 50 per cent18 being located in developing countries.

When coordinating a country’s MSME objectives with its policies to achieve the SDGs, countries will naturally have to consider the level of development of the MSMEs within their country. For countries where a majority of MSMEs are informal, focusing first on bringing those firms into the formal economy, which may help with their growth, help their workforce with social protections, and help the government to accurately understand the dynamics of their economy, may be a significant priority. Where many firms are informal, policies that target energy efficiency (Goal 7) or responsible consumption and production (Goal 12) in MSMEs could pose implementation and compliance problems. For those countries with more formalized MSMEs, looking to policies around competition and investment might rise in importance as a means to achieving goals 8 and 9. The strategic goals of a country regarding the SDGs should feed down to sectoral policies, including MSME policies, and in turn the nature of these sectors and the progress being made there should create feedback to further refine high level strategic goals.

Figure 1. The 17 Sustainable Development Goals

Figure 1. The 17 Sustainable Development Goals

Resources

18 Business & Sustainable Development Commission (2017). Better Business Better World: The Report of the Business & Sustainable Development Commission.