The past six years have delivered a whole gambit of useful (albeit also painful) lessons for us all – especially the policymakers. And yet the time lag between realisation and robust action by the policymakers and their corporate counterparts would make even Curiosity (the Mars rover) seem like a supersonic jet.

Author: Zaf Gandhi, Managing Consultant & Partner

Opportunity to Learn

A key lesson to emerge, starting with the Lehman Brothers’ collapse, was that it is futile to allow a handful of people in a boardroom to govern the lives of thousands of other people, unchecked. And yet, aside from appeasing their shareholders, most corporations have yet to introduce radical and fundamental changes to their mindset and corporate culture. Likewise, the policymakers have also yet to fully get to grips with this dimension.

So, who will be the economic leaders of tomorrow?

Opportunity Beckons

The growth and growth strategies of the last decade were underscored by financial risk-taking disguised as spreading the risk globally through various (often opaque) investment instruments (e.g. derivatives); and predication that the growth engine is unstoppable because emerging economies will provide the necessary “fuel” and impetus. Therefore, lowering the true cost of borrowing money today based on long-term payback models was supposedly an infallible approach.

All along, the focus was on big money and big corporations – the perception being that their size would mitigate the risks and smooth out any market spikes. At the same time, very little attention was paid to the small- and medium-sized enterprises (SMEs) – other than the general acknowledgement that, given the ubiquity of these types of organisations, they are an important driver in job creation, economic growth and innovation.

The fact that SMEs actually offer a viable and sustainable opportunity to DE-RISK an entire economy has been largely overlooked by the economists, policymakers, industry consultants and the media.

De-risk an Economy. How?

The notion that a boardroom consisting of a handful of people can bear so much influence on the lives and careers of so many people should always raise a red flag. Should this sort of concentration of power be allowed to continue in a democratic society? Or should we simply accept that AGMs are supposed to allow for the shareholders to exercise their democratic and ownership rights, every once in a while?

On the other hand, policymakers have a much more potent weapon at their disposal: SMEs. Instead of relying on the usual cliches about SMEs, policymakers need to start engaging with SMEs like never before. They need to realise that SMEs offer the least risky way for their economies to grow and flourish. For example, in a worst case scenario, if an owner-managed SME goes to wall, the unfortunate event does not send shockwaves through a whole community, nation or country in the way that Lehman Brothers did. The damage can be self-contained.

Opportunity SME

Only by changing the focus to SMEs, and seeing them in a positive new light, can policymakers hope to guarantee a better economic future. Rather than treating SMEs as a political tick-box that can be appeased by peripheral support and financial measures, it is high time to devise far-sighted, innovative and concrete policies that embrace and engrain SMEs in a strategic roadmap. The nations that succeed in this will be the economic leaders and custodians of tomorrow.

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Related resources:
- Services for SMEs & Start-Ups
- Foresight Leadership: Hail the Chief Enterprise Officer (CEnO)
- Emerging Frontiers: Opportunity SME Observatory (OSMEO)

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