McKinsey & Company talks about improvement of effectiveness of support for SMEs during pandemic

McKinsey & Company talks about improvement of effectiveness of support for SMEs during pandemic

BAKU, Azerbaijan, Sept. 1

By Nargiz Sadikhova – Trend:

Strengthening long term activities to ensure sustainability and competitiveness can be crucial for improving the effectiveness of the efforts made to support the small and medium-sized enterprises (SMEs) during the pandemic, McKinsey & Company told Trend on Sept. 1.

“There are four directions of work that can be crucial for making such efforts more effective. The first two directions are connected with the immediate response to the pandemic, the other two – rendering assistance for the businesses to become stronger in the future. The first direction is to facilitate the access of SMEs to government assistance,” the company added.

“To increase the participation of SMEs in support programs and increase their effectiveness, the state agencies must work directly with them, assisting to jointly determine the right support measures, simplify the application processes and receive timely assistance. The countries that have successfully conducted such events usually create a single window for interaction with SMEs," the company said.

Then, having received the information about the most urgent support, the companies must ensure the process of obtaining this support quickly. By simplifying the administrative processes, the governments may increase the participation of SMEs in the assistance programs.

The second direction is to ensure an effective ecosystem of interaction with SMEs through the so-called "SME Nerve center".

The creation of the "SME Nerve Center", which would act as a single conductor, managing the entire ecosystem and ensuring that the conformity of the efforts of all participants in the process with the common goals. This may greatly increase the effectiveness of the support measures.

Moreover, the "SME Nerve center" can act as a control center that closely monitors the implementation process, the effectiveness of the taken measures, constantly receives business feedback, adapts approaches, and proposes solutions for the government.

"At present, most of the governments are not always able to track the progress, which creates dead spots that limit their ability to take corrective actions to improve program effectiveness," the company said.

The third direction is to strengthen the actions to ensure sustainability and competitiveness in the long term, instead of short-term support only for survival. The speed of economic recovery will depend on the ability of SMEs to recover and return to the normal activity after the current stimulus measures have been taken.

The state structures must focus on three key issues that are most effective for SMEs in the long term, namely, ensuring access to the local market, supporting the access to the export markets, and increasing labor productivity.

The fourth direction is to rethink existing strategies and support tools within the new reality. The government could consider rethinking its existing strategies and adapting them to the new reality.

“Small and medium-sized companies are a vital engine of economic recovery in the post-crisis period, and many governments, realizing this, have already implemented stimulus programs in response to the pandemic. The next thing is to ensure an integrated approach, taking into account the new reality, which will help accelerate the recovery and growth of SMEs in the long term," the company added.


Follow the author on Twitter: @nargiz_sadikh

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