As we steer our ship into a New Development Course in a Changing World, the importance of Micro, Small, and Medium Enterprises (MSMEs) and the circular economy is crystal clear. MSMEs, which account for 90% of businesses, more than 70% of employment, and 50% of GDP worldwide, remain the core of the economy for most societies.

The United Nations General Assembly designated June 27 as “Micro-, Small, and Medium-sized Enterprises Day” (A/RES/71/279) to raise awareness of the tremendous contributions of micro-, small and medium-sized enterprises (MSMEs) to the achievement of the United Nations Sustainable Development Goals (SDGs). Together with MSMEs and entrepreneurs, we can reach the SDGs.

The Circular Economy – A Paradigm Shift with a Human-Centered Approach and MSMEs’ Role

A human-centered approach is central to the evolving ‘circular economy,’ emphasizing the importance of individuals and communities in driving sustainable transformation. Considering people’s well-being and prioritizing inclusive participation ensures that new systems align and contextualize local culture and personal/institutional needs. The circular economy represents a transformative framework to eliminate waste while fostering continuous resource utilization and social and economic development.

Replacing the linear ‘take-make-waste’ model, the circular economy relies on a closed-loop principle that focuses on human-centered product design, durability, reusability, remanufacturing, and recycling. Micro, Small, and Medium Enterprises (MSMEs) are vital in this paradigm shift. It includes the green and blue economies, which are the base for sustainability and make for a more liveable planet. As crucial drivers of local economies, they are uniquely positioned to incorporate circular practices into their operations. By leveraging their agility and local knowledge, MSMEs can adopt innovative business models prioritizing sustainability and profitability while enhancing productivity and responding to local communities’ needs. Their role in designing people-oriented products and services underscores the importance of resilient, sustainable enterprises that meet environmental goals and community needs.

The UN SDGs and Circular Economy

The Circular Economy concept intersects with multiple Sustainable Development Goals (SDGs), notably SDG 12 (Responsible Consumption and Production). It promotes sustainable practices by emphasizing efficient resource use, waste reduction, and recycling. SDG 9 (Industry, Innovation, and Infrastructure) is also relevant as the Circular Economy encourages innovation in production processes and technology to create more sustainable systems. Moreover, SDG 13 (Climate Action) is addressed through the Circular Economy’s focus on mitigating climate change impacts by reducing resource extraction and disposal emissions. Furthermore, SDG 7 (Affordable and Clean Energy) is supported as circular practices optimize energy use and promote renewable energy sources. SDG 8 is about “decent work and economic growth” in which workers, in cooperation with employers, can jointly implement a Circular Economy model that drives growth and productivity. In the SDG 11 (Sustainable Cities and Communities) context, the Circular Economy contributes to building more sustainable urban environments by minimizing environmental degradation and enhancing resource resilience. Lastly, the Circular Economy aids in achieving SDGs 14 and 15 (Life Below Water and Life on Land) by reducing pollution and waste generation, conserving ecosystems, and preserving biodiversity.

MSMEs Forward Together

The circular economy and MSMEs are inherently linked through a shared commitment to sustainability and growth. By adopting a human-centered approach within the circular economy framework, MSMEs can survive and thrive amid uncertainties by aligning their products and services with people’s needs and aspirations. MSMEs can lead the charge toward a sustainable and prosperous future with the proper support from governments, international organizations, and consumers. Governments and development partners can create an environment that supports MSMEs in their efforts to invest, trade, and thrive in global markets and harness the related development benefits.

The journey is long and challenging, but unity, innovation, and resilience will help us reach our destination. As we celebrate Micro, Small, and Medium Enterprises Day, let’s reaffirm our commitment to supporting these agents of innovation, growth, and sustainability. Together, with a human-centered mindset, we can shape an economically prosperous and environmentally sustainable future.

“The future depends on what we do in the present.” – Mahatma Gandhi

Let’s make the present count, for a better and sustainable future awaits us.

The International Council for Small Business (ICSB) stands as a beacon of global collaboration, championing entrepreneurship and micro, small and medium-sized enterprises (MSMEs) worldwide. In pursuit of this mission, ICSB has forged a strategic partnership with the Organisation for Economic Cooperation and Development (OECD), an international organization dedicated to building better policies for better lives since 2014.

Established on September 30, 1961, the OECD has been at the forefront of shaping economic policies to promote prosperity and well-being across its member countries. With its headquarters in Paris, the OECD’s work spans a wide range of areas, including economic growth, employment, education, and innovation.

ICSB has served as a non-governmental partner organization on the Committee on SMEs and Entrepreneurship (CSMEE) within the OECD framework. This partnership has provided ICSB with a unique platform to contribute to sharing knowledge and views on policies and initiatives that support MSMEs and entrepreneurship on a global scale. OECD was the first organization to support ICSB in creating the UN MSMEs in 2016.

Recently, ICSB participated in the 6th Session of the Committee on SMEs and Entrepreneurship (CSMEE), underscoring its commitment to advancing the interests of MSMEs worldwide. Dr. KiChan Kim, Chair of the Board of ICSB, Dr. Winslow Sargeant, Immediate Past Chair, Dr. Ayman ElTarabishy, President and CEO of ICSB, and Dr. Hartmut Mayer, ICSB Board Member, were among the esteemed representatives who attended the session. Dr. Thomas Heupel, Vice-Rector for Research of FOM University of Economics & Management 

Furthermore, ICSB, in collaboration with the government of Switzerland, hosted an OECD reception to support the critical work on MSMEs and to foster further collaboration. During the reception, Dr. Hartmut Mayer delivered a brief presentation on the upcoming ICSB World Congress, extending a warm invitation to all delegates to attend and contribute to the global conversation on entrepreneurship and SME development.

Through its partnership with OECD and active participation in global initiatives like the Committee on SMEs and Entrepreneurship, ICSB continues to drive positive change and empower entrepreneurs and MSMEs worldwide. These organizations are paving the way for a more inclusive, innovative, and prosperous future for all.

The collaboration between ICSB and OECD exemplifies the power of partnership in addressing complex global challenges and creating opportunities for sustainable growth and development. As we look ahead, we must continue strengthening and expanding such collaborations to foster entrepreneurship and SMEs as economic and social progress engines.

Switzerland, renowned for its innovation and competitiveness, is a beacon among nations. With a rich tapestry of political governance, neutrality, entrepreneurial spirit, and a steadfast commitment to education, Switzerland has carved a unique path in history, leaving an indelible mark on its people and global standing.

Switzerland’s Prowess in Country Competitiveness

Switzerland’s success story regarding country competitiveness is multifaceted and rooted in various factors. Its groundbreaking political governance, remarkable neutrality, flourishing entrepreneurship, and unwavering dedication to education have propelled it to the forefront of global innovation and competitiveness.

Political Governance and Neutrality

Switzerland’s political governance has significantly contributed to fostering a conducive environment for innovation and competitiveness. The country’s long-standing tradition of political stability, strong institutions, and decentralized federal system have provided a solid foundation for economic growth and development. This stability has allowed businesses to thrive and innovate in a predictable and supportive environment.

Furthermore, Switzerland’s remarkable neutrality has contributed to its competitiveness on the global stage. By maintaining a neutral stance in international conflicts, Switzerland has established itself as a trusted partner for diplomacy, trade, and international cooperation. This neutrality has attracted businesses worldwide, fostering a diverse and vibrant entrepreneurial ecosystem.

Entrepreneurship and Global Connections

Switzerland’s entrepreneurial spirit is a driving force behind its innovation and competitiveness. The country boasts a thriving ecosystem of small and medium-sized enterprises (SMEs), which form the backbone of its economy. These SMEs and globally renowned companies such as Nestlé, Villars-Holding, and Rolex contribute to Switzerland’s economic vibrancy and global reach.

Switzerland’s international connections have been instrumental in its economic development. With one of Europe’s highest percentages of foreigners, Switzerland has embraced globalization and leveraged its global networks to foster innovation, trade, and economic growth. The city of Fribourg, for instance, exemplifies Switzerland’s thriving international connections, with its multicultural ethos and esteemed university attracting talent and ideas from around the world.

Commitment to Education

Switzerland’s steadfast commitment to education has been a critical driver of its innovation and competitiveness. The country’s education system is highly regarded, offering a comprehensive and practical-oriented approach to learning. Institutions like the School of Management Fribourg (HEG-FR) exemplify Switzerland’s dedication to bridging theory with practice, equipping students with the skills and knowledge needed to excel in business.

By prioritizing practical relevance and addressing real-world challenges, Switzerland’s education system nurtures a pipeline of talent that fuels innovation and entrepreneurship. The collaboration between academia and industry ensures that graduates are well-prepared to contribute to the country’s economic growth and competitiveness.

Switzerland’s Resilience in Challenging Times

The 2020s brought unprecedented challenges to the global community, including a pandemic and a full-scale war in Europe. These events led to food and fuel price surges, exacerbating the turmoil faced by nations worldwide. Global living standards declined in this context, as reflected in indicators like the UN’s Human Development Index (HDI).

However, amidst this turmoil, Switzerland stood resilient, maintaining its top position in the HDI rankings for the second consecutive year. High incomes and long life expectancies buoyed Switzerland’s standing, showcasing the country’s ability to weather global storms and prioritize the well-being of its citizens.

The Power of Visionary Governance and Entrepreneurial Dynamism

Switzerland’s journey as a bastion of innovation and competitiveness is a testament to the power of visionary governance and entrepreneurial dynamism. The country’s leaders have embraced forward-thinking policies that foster creativity, collaboration, and economic growth. This visionary governance has created an environment where entrepreneurs can thrive and contribute to Switzerland’s global standing.

Moreover, Switzerland’s entrepreneurial dynamism has been a driving force behind its innovative prowess. The country’s entrepreneurs, motivated by profit and self-interest, have continually pushed the boundaries of innovation, creating new products, services, and industries. This entrepreneurial spirit has propelled Switzerland’s economic growth, enhanced productivity, and expanded opportunities for wealth creation.

Navigating the Complexities of the Modern Era

As the world navigates through uncertain times, Switzerland’s resilience and leadership offer invaluable lessons in navigating the complexities of the modern era. Globalization and innovation are twin pillars driving the trajectory of modern economies, shaping societies, and influencing standards of living worldwide. In a rapidly interconnected world, embracing innovation and fostering global connectivity has never been more crucial.

However, the pursuit of globalization and innovation comes with its challenges. The allure of being at the forefront of globalization and innovation can sometimes breed complacency, leading to a reluctance to take calculated risks necessary for further development. It is crucial to balance embracing innovation and managing its potential risks.

The Social Contract and Inclusive Growth

In his groundbreaking book, titled Human-Centered Economics, Richard Samans, Director of the International Labour Organization’s Research Department and who has served as its Sherpa to the G20, G7, and BRICS, emphasizes the importance of evaluating economic performance through the lens of household and community living standards rather than solely focusing on GDP growth. His book, building on esteemed economists such as Adam Smith, John Stuart Mill, and Alfred Marshall, echoes this sentiment, highlighting the necessity of enabling policies and institutions to complement market mechanisms in achieving broad and lasting improvements in societal well-being.

The nexus of globalization and innovation reshapes traditional economic growth and development paradigms. Technological advancements, cross-border trade, and cultural exchange foster unprecedented opportunities for progress and prosperity. However, harnessing these opportunities requires a nuanced understanding of the complex dynamics and proactive policies that prioritize enhancing median household living standards.

Inclusive and sustainable growth requires cultivating a robust social contract alongside market mechanisms. By anchoring economic policies in equity and social justice principles, societies can ensure that all share the benefits of globalization and innovation. This principle, championed by Samans and echoed by economists and policymakers worldwide, underscores the importance of creating an inclusive society where the living standards of median households emerge as a central focal point deserving of concerted policy attention.

Conclusion

Switzerland’s journey as a beacon of innovation and competitiveness offers valuable insights and lessons for the world. Its success is rooted in visionary governance, entrepreneurial dynamism, and a steadfast commitment to education. As the world grapples with the complexities of the modern era, Switzerland’s resilience and leadership serve as a guiding light, reminding us of the power of embracing innovation, fostering global connectivity, and anchoring economic policies in equity and social justice principles.

In this rapidly evolving landscape, the pursuit of globalization and innovation must be guided by a holistic vision that prioritizes the well-being of individuals and communities. By embracing innovation, fostering global connectivity, and anchoring economic policies in principles of equity and social justice, societies can navigate the challenges of the 21st century and unlock new pathways to prosperity for all. In this paradigm, the living standards of median households emerge as a central focal point, deserving of concerted policy attention and concerted efforts from economists and policymakers worldwide.

Additional Information:

• Switzerland’s commitment to sustainability and environmental protection is a crucial driver of its competitiveness and innovation.
• The country’s strong intellectual property rights protection and support for research and development contribute to its innovative edge.
• Switzerland’s unique geographical location, nestled in the heart of Europe, provides it with strategic advantages in terms of logistics and connectivity.
• The Swiss education system emphasizes vocational training and apprenticeships, nurturing a skilled workforce that meets the needs of the labor market.
• The country’s commitment to multilingualism, with four official languages (German, French, Italian, and Romansh), fosters a diverse and inclusive society.

Article by:

Dr. Ayman ELTarabishy, President & CEO, ICSB and Deputy Chair, Department of Management, GWSB

Rico J. Baldegger is the Director and Professor of Strategy, Innovation, and Entrepreneurship at the School of Management Fribourg (HEG-FR) and Conference Chair of the Geneve/Fribourg Entrepreneurship Forum.

KiChan Kim, Chair, ICSB, Professor, The Catholic University, Seoul.