SMEs Post Covid Policy : Survival Of the Fittest Vs Making Them Fit To Survive.
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SMEs Post Covid Policy : Survival Of the Fittest Vs Making Them Fit To Survive
By: Patara Manas. 01 - 10 - 2020.
Small and medium-sized enterprises (SMEs) play an important role in any economy and the existence of a thriving SME enterprise sector is an indication of a healthy market economy. SMEs world over are responsible for large contributions to value added, employment, sustainable growth and for closing income inequality gaps.
Income Inequality in Thailand has always been a problem and even pre-pandemic, Thailand remained one of the most unequal societies in Southeast Asia. According to a recent report by Credit Suisse, the Global Wealth Report and Databook, published in December 2018, showed that the richest 1% in Thailand now controls almost 67% of the country’s wealth.
Pre-pandemic, government policies have favoured big businesses over SMEs which has been a major contributing factor to the countries’ growing wealth gap. The Covid-19 outbreak will only deepen these existing income and wealth inequalities.
The economic impact of the coronavirus outbreak has been severe on SMEs and the government was right to launch a stimulus package to alleviate the stress on liquidity of SMEs. However, once the stimulus package is over, with no more cash handouts and resumption of loan payments, how will SMEs survive?
There is a lot of talk on Darwin’s theory on “survival of the fittest” for SMEs and some SMEs are not expected to survive the virus’s economic knock but those SMEs that are are ready to pivot and show the ability, capability and potential to thrive in the ‘New Economy’ world must be saved and nurtured at all cost. These SMEs must be identified and given the resources to make sure they remain “fit to survive.”
SMEs typically create innovative products and services but what SMEs lack, besides access to capital and funding are information and technology resources that would help them operate their business, plan their marketing and innovate more efficiently.
As we look beyond to the ‘New Normal’ post pandemic and to the ’New Economy’, the government should take this responsibility to go beyond liquidity assistance and offer SME support systems with a more hands on approach to drive sustainable long-term growth of SMEs, to help SMEs re-invent their business and marketing strategies, and encourage SMEs to innovate to be more in sync with the post pandemic world.
Thailand has a chance to reset, investing in SMEs now will benefit Thailand greatly post Covid preventing the overall economy to spiral downwards and putting brakes on the spike in unemployment.
Policymakers can choose to abide by the “survival of the fittest” rule or save SMEs by ensuring that they are “fit to survive”. Act decisively now and SMEs will save our economy in return.