OECD SME and Entrepreneurship Outlook 2023

OECD SME and Entrepreneurship Outlook 2023: Critical Insights and Strategic Imperatives

The OECD SME and Entrepreneurship Outlook 2023 reveals that small and medium-sized enterprises (SMEs) are navigating a landscape defined by disruption and transformation. From geopolitical tensions to the digital and green transitions, SMEs are at a crossroads where resilience and adaptation are not just desirable but essential. Here are the key takeaways: 

1 Geopolitical and Economic Pressures: 

  • SMEs are facing heightened challenges due to global instability, particularly the repercussions of the Russia-Ukraine conflict. While direct exposure to these regions is limited, the ripple effects—spiking energy costs, inflation, and stringent monetary policies—have escalated operational pressures. 
  • With firm exits rising sharply, especially as fiscal support diminishes, it’s clear that SMEs must build robust crisis-management strategies to withstand future economic shocks. 

2 Harnessing Digitalisation for Growth: 

  • The accelerated digital shift during the pandemic provided a lifeline for many SMEs, but a significant portion still struggles to unlock the full potential of digital technologies. The key obstacle? A persistent digital skills gap and limited access to cutting-edge solutions.
  • Governments are pushing to close these gaps through policies that enhance digital adoption, but SMEs must prioritise upskilling and integration into digital networks to maintain competitiveness. Without this shift, the digital divide will only deepen, threatening long-term growth.

3 Global Value Chains (GVCs) and Trade Dynamics:

  • Integration into global value chains has proven to enhance productivity and resilience for SMEs. However, persistent disruptions and rising costs have made adaptation challenging. SMEs that remain agile in reconfiguring their supply chains will be better positioned to thrive. 
  • To address these pressures, policies need to focus on reinforcing SME participation in GVCs, emphasising sustainability, and strengthening linkages with multinational partners. Strategic collaboration is essential for resilience and market expansion. 

4 Closing the Gender Gap in Trade: 

  • Gender disparity in international trade persists, with only 11% of women-led SMEs exporting compared to 19% of those led by men. Addressing this gap requires more than token efforts; it demands structural change and targeted initiatives. 
  • Governments are working on easing trade barriers for women-led businesses, including improving access to finance and trade facilitation. Yet, success depends on consistent, data-driven approaches to monitor progress and adapt strategies.

5 The Green Transition: An Opportunity and a Challenge: 

  • SMEs are critical players in the green transition, responsible for a significant share of industrial emissions. However, many lag behind in adopting sustainable practices. This isn’t just a compliance issue—it’s a missed opportunity for innovation and market differentiation. 
  • Governments must intensify efforts to support SMEs with the tools, funding, and knowledge to make the shift towards circular, sustainable business models. For SMEs, this transition represents not just an obligation but a pathway to new markets and long-term competitiveness. 

6 Skills Shortages and Workforce Development: 

  • The battle for talent is intensifying, with SMEs struggling to attract and retain skilled workers in an era of shifting skill demands. As the digital and green transitions progress, the competition for tech and sustainability expertise will only grow. 
  • Addressing these challenges requires a multi-pronged approach: investing in internal upskilling, forging partnerships with educational institutions, and tapping into government incentives for skill development. SMEs that proactively address workforce challenges will be better equipped to innovate and grow. 

7 Networks as Strategic Assets:

  • Building and leveraging networks has become a cornerstone of SME resilience. Networks provide access to finance, digital solutions, and skills, while also fostering knowledge spillovers and economies of scale. Governments are actively promoting policies to enhance SME integration into production, supply chain, and innovation networks.
  • Moving forward, SMEs must see networks not just as support systems but as strategic assets that drive innovation, resilience, and growth. 

SMEs at a pivotal juncture

The Outlook underscores a critical reality: the SME sector is at a pivotal juncture. To consolidate recent gains and drive future growth, SMEs must embrace strategic adaptation. This means deepening digital integration, pushing forward with sustainability, and proactively addressing skill and trade disparities. Governments have a vital role to play, but the onus is on SMEs to position themselves at the forefront of change, driving resilience and innovation in a rapidly evolving global economy. 

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About the OECD

The Organisation for Economic Co-operation and Development (OECD) is a unique global platform where governments collaborate to tackle the pressing economic, social, and environmental challenges of our time. Founded in 1961, the OECD brings together 38 member countries, including the world’s most advanced economies, as well as emerging nations, with a shared mission: to promote policies that foster prosperity, sustainability, and well-being across the globe. 

The OECD’s work is anchored in rigorous data analysis, policy expertise, and evidence-based recommendations. It offers governments a critical edge by providing insights into best practices and benchmarking tools, enabling them to navigate complex economic environments and drive informed decision-making. From digital transformation and trade to education and climate change, the OECD’s initiatives are designed to address systemic challenges that demand coordinated, innovative, and sustainable solutions. 

A Catalyst for Collaboration and Innovation 
What sets the OECD apart is its ability to unite diverse nations around common goals. By facilitating dialogue and cooperation, it helps shape international standards that drive transparency, efficiency, and equity in the global economy. Through its influential reports, peer reviews, and policy dialogues, the OECD encourages countries to raise their ambitions and adopt forward-thinking approaches that can lead to lasting, impactful change. 

In an era where businesses and governments are constantly adapting to new realities, the OECD remains an essential partner. Its forward-looking approach ensures that countries are not just reacting to challenges, but are strategically planning for a future defined by resilience, inclusivity, and innovation. 

Strategically relevant 
The OECD isn’t just a policy think tank; it’s a driving force behind global economic stability and growth. Its work empowers countries to navigate change with confidence, fostering collaboration that can unlock new opportunities and drive shared success. For businesses and policymakers alike, engaging with the OECD’s insights is not just beneficial—it’s essential for staying ahead in an interconnected and rapidly evolving world. 

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