Micro, small and medium enterprises (MSMEs) in Europe and Central Asia need an integrated package of financial and non-financial instruments to help them adapt to the twin challenges of COVID-19 and accelerated digitalization, according to the panel for the recent GMIS Digital Series webinar, “Industrial Recovery in Europe and Central Asia: Accelerating Digital Transformation for MSMEs”.
Taras Kachka, Deputy Minister for Economic Development, Trade and Agriculture – Trade Representative of Ukraine, stressed the need for “better balance” in mitigating the pandemic while preserving the economy, particularly the MSME sector. He noted the need to improve skills, and the certification of products and services, and to increase transparency. “MSMEs are the key drivers of regional economic growth but the lockdown measures put in place in every country have impacted their ability to produce, trade and serve their communities as supply chains were disrupted,” lamented Kachka.
Naira Margaryan, Armenia’s Deputy Minister of Economy, noted the imperative of building capacity for women and youth, given the paucity of leadership positions they occupy. She said, “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 are supporting capacity and skill-building, particularly in the manufacturing sector.”
Milena Angelova, Vice-President of the EU’s European Economic and Social Committee, focused on the need for targeted investments to specific sectors, for digitalization of MSMEs, digital skills and financial support to MSMEs, particularly through enhanced partnerships. “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,” said Angelova.
Maja Tomanic-Vidovic, Director, Slovene Enterprise Fund, noted that since the outbreak of COVID-19, 75 per cent of MSMEs had lost employees, 70 per cent had falling revenues, while 40 per cent suffer from liquidity issues. In the long-run, she noted, MSEMs will have to adapt to the accelerated paradigm of digitalization. She warned, “We have to accept that nothing will be the same as before…companies that don’t accept this will have problems in the future.” Concluding, Jacek Cukrowski, Chief of UNIDO’s Regional Programme, Europe and Central Asia, noted that the MSME sector is the backbone of any national economy, and that innovation is “at the core of modern business”. He listed UNIDO’s interventions in this area, including tailored programmes for the digitalization of MSMEs, enhancing digital resilience and competitiveness, digital upskilling and training. Cukrowski stressed, “Ensuring [MSMEs’] resilience is key to creating a more inclusive and resilient, human-centered future and a thriving global economy.”