In collaboration with the
National University of Singapore
Future Readiness of SMEs
and Mid-Sized Companies:
A Year On
INSIGHT REPORT
NOVEMBER 2022 Images: Unsplash, Getty Images
Contents
Preface 3
Executive summary 4
1 Introduction5
1.1 Why SMEs and mid-sized companies 6
1.2 On the front line of turbulences and shocks7
2 Top challenges 8
2.1 Survival, expansion, funding and access to capital 9
2.2 Talent10
2.3 Digital transformation and innovation 11
2.4 Sustainability 11
3 Boosting organizational resilience 12
Disclaimer
This document is published 3.1 People: leadership and talent as “meta drivers” of future readiness 13
by the World Economic
Forum as a contribution to 3.2 Business frameworks 14
a project, insight area or
interaction. The findings, 4 Future readiness pathways 15
interpretations and
conclusions expressed
herein are a result of a4.1 Attracting and cultivating talent 16
collaborative process
facilitated and endorsed by 4.2 Driving digital transformation21
the World Economic Forum
but whose results do not4.3 Pivoting to sustainability 25
necessarily represent the
views of the World Economic
5 A system view: enabling an ecosystem to empower SMEs and mid-sized 30
Forum, nor the entirety of its
Members, Partners or other companies for growth
stakeholders.
5.1 Digitalization: a key to SMEs and mid-sized companies’ empowerment31
(c) 2022 World Economic
Forum. All rights reserved. 5.2 Moving forward 33
No part of this publication
may be reproduced orConclusion 34
transmitted in any form or
by any means, including
photocopying and recording, Contributors35
or by any information
storage and retrieval system. Endnotes 36
Future Readiness of SMEs and Mid-Sized Companies: A Year On 2November 2022 Future Readiness of SMEs
and Mid-Sized Companies:
A Year On
Preface
The business community is stepping up
to tackle the biggest issues facing the
world. SMEs and mid-sized companies
are key enablers in this pursuit.
Rashimah Binte Rajah
Lecturer, Department Olivier Woeffray
of Management and Practice Lead,
Organization, NationalStrategic Intelligence,
University of Singapore World Economic Forum
Business School
The post-COVID-19 era is significantly more existing success stories of how smaller companies
challenging than most people had initially hoped. can step up to the challenges ahead.
Heightened geopolitical tensions, the energy crisis,
supply chain disruptions, hyperinflation and extreme This report sheds light on some key opportunity
weather events are just a few of the difficulties that spaces for SMEs and mid-sized companies to
will make the next decade a demanding one. pragmatically develop strategies and pathways
towards increasing their future readiness. We also
Small- and medium-sized enterprises (SMEs) andhope that this report helps change the perception
mid-sized companies, perhaps more than any other many may have of these SMEs and mid-sized
companies, are at the frontline of these turbulences. businesses. We aim to support leadership teams
Often eclipsed by their larger counterparts or by the and the wider ecosystem in understanding how
latest high-tech start-ups, these hidden champions they can help increase the capacity for smaller
are often overlooked. Despite their challenging companies to thrive and positively impact the
realities, there are important opportunities and economy and environment.
Future Readiness of SMEs and Mid-Sized Companies: A Year On 3Executive summary
SMEs and mid-sized companies have the
potential to enable widespread growth,
innovation and sustainability in global,
regional and local economies.
Small- and medium-sized enterprises (SMEs) This report also aims to identify concrete areas of
and mid-sized companies are the backbone of opportunities for SMEs and mid-sized companies
economies. They represent 90% of all companies and to increase their future readiness. Below are some
are responsible for close to 70% of jobs and GDP of the key recommendations that can be drawn
globally. Despite their tremendous collective impact, from this research:
they are often challenged by economic shocks and
turbulences in an environment that is not favourable Boosting resilience:
for their survival and expansion. Indeed, many owners – Increased resilience can be achieved with a
and executives of these smaller businesses must focus on successive stages of maturity, starting
often choose to prioritize their immediate survival with the importance of authentic leadership,
instead of being able to invest in business services followed by the development of talent in the
and capabilities that can pay off in the longer term. broader organization, and finally by focusing
on the formalization of the business framework
SMEs and mid-sized companies possess uniquesuch as orientation, business model flexibility,
strengths that allow them to contribute greatly to networks, digital infrastructure and governance.
the local and global economy. It is therefore crucial
to examine how SMEs’ ecosystems and growth Framework recommendations to address top
capabilities can be improved to achieve success. challenges of these companies include:
– The development and implementation of
This report builds on the analysis of over 200 peer- a strategic approach to talent management.
reviewed articles and the quantitative and qualitative
surveying of about 800 leaders and executives– The successive rollout of digitization of
from SMEs and mid-sized companies as well as processes, digitalization of products and
contributions from experts from the Forum’s widerservices, and the digital transformation of
network. Here are some of the key learnings: business models.
– Resilience and agility are two of the most– The implementation of specific sustainability
important ingredients for these companies to measures depending on the company’s level
thrive in a volatile and challenging environment. of maturity in this space.
SMEs and mid-sized companies tend to be
less resilient than their larger counterparts but System-level growth and digital trade:
display much higher levels of agility. – Implementation of targeted measures aimed at
harmonizing and driving interoperability of trade
– Organizational changes, both big and small, data across borders and supply chains can help
require concerted efforts from leadership andsmaller companies to trade internationally.
members of the organization in a bid to achieve
higher levels of future readiness. When theThe World Economic Forum will be building on the
vision is well-understood, frameworks to initiate insights generated in this report to further support
change can be executed faster in smaller SMEs and mid-sized companies in their future
companies than in larger firms.readiness journey. This will be achieved through
the development and aggregation of additional
– While SMEs and mid-sized companies can go resources, including the continuous development
a long way in building their future readiness of the Forum’s self-assessment and benchmarking
in bridging the resilience gap, there is antool on future readiness, as well as the creation of
urgent need for the wider policy environment, a peer-to-peer community for smaller companies
including policy-makers, investors and other willing to learn and exchange best practices and
stakeholders, to support their ability to thrive. connect with experts.
Future Readiness of SMEs and Mid-Sized Companies: A Year On 41 Introduction
Stakes are high for SMEs and mid-sized
companies, and how they perform will
impact every sector of society.
Future Readiness of SMEs and Mid-Sized Companies: