From Capital to Capability: Why MSMEs Are the Beating Heart of a Sustainable Future

In a world rocked by global shocks, shifting trade dynamics, and the relentless march of technology, Micro, Small, and Medium-Sized Enterprises (MSMEs) have never mattered more. They are more than economic engines — they are the lifelines of our communities, the stewards of local resilience, and the quiet revolutionaries transforming how we live, work, and grow together.

 

This year’s Global MSMEs Report 2024 from the International Council for Small Business (ICSB) shines a powerful light on how human-centred entrepreneurship can help MSMEs become the drivers of solutions for the world’s biggest challenges from inequality and climate change to the digital divide and the pressing need for decent work.

 

But as the report makes clear, this vision doesn’t happen by accident. It demands that we see MSMEs for what they really are, not simply businesses, but human stories of courage, creativity, and community impact. And it demands that we match their grit with genuine support, fair policies, and an ecosystem that nurtures their potential.

 

The Human Side of Enterprise: Why It Matters Now

What does it mean to place humans at the heart of entrepreneurship? For Dr Ayman ElTarabishy, President and CEO of ICSB, and many contributors to this landmark report, it’s about reclaiming a simple truth: businesses exist because people do.

 

This humane approach to entrepreneurship reminds us that profit cannot be separated from people’s well-being, the environment’s health, or a community’s cultural roots. It’s an idea that’s deeply woven into the UN Sustainable Development Goals (SDGs), and yet, it’s MSMEs who are best positioned to bring it to life.

 

Consider this, MSMEs make up 90 per cent of all businesses, provide over 70 per cent of global employment, and contribute about half of the world’s GDP. They are the restaurant owners, the family-run farms, the neighbourhood digital start-ups, the artisans, and the repair shops that stitch our economies and our societies together. They embody the everyday resilience that big corporations often talk about but rarely live.

 

As the report’s introduction puts it MSMEs are not just economic entities but vital engines of innovation, resilience, and social cohesion that address complex global issues from poverty and inequality to climate change and sustainable development.

 

In short, the future is local and deeply human.

 

Climate Change: A Battle MSMEs Can’t Fight Alone

 

One of the most striking sections of the report examines the role of MSMEs in building resilience to climate change, particularly in vulnerable regions such as Francophone Africa. Here, small businesses are hit hardest by droughts, floods, extreme weather, and resource scarcity yet they often lack the technical know-how or financial means to adapt.

 

A recent survey in 12 African countries revealed that nearly 7 in 10 companies see environmental risks as a significant threat to their business. But shockingly, more than 60 per cent have not taken any concrete action to adapt. Why? The barriers are numerous, including a lack of awareness, insufficient funding, limited access to sustainable technologies, and often, a sense that survival today must take precedence over investing in tomorrow.

 

Yet when small firms do invest in green practices from renewable energy to sustainable packaging, they don’t just reduce their climate risk; they open up new markets, improve their reputation, and often strengthen local communities in the process.

 

The lesson is clear: MSMEs have enormous potential to be climate champions, but they need an ecosystem that empowers them. Grants, technical assistance, affordable loans, and public-private partnerships can all make the difference between businesses that merely survive and those that thrive sustainably.

 

 

The Circular Economy: Innovation Rooted in Community

 

Another powerful insight in the report is the role of the circular economy as a catalyst for entrepreneurial innovation. In Germany, for example, MSMEs are showing how local businesses can drive big shifts toward sustainability by designing out waste, extending product life cycles, and regenerating natural systems.

 

By embedding circular principles in everyday business models, MSMEs can reduce environmental impact, create new revenue streams, and generate local jobs all while staying rooted in the needs and values of their communities.

 

This local first, people-centred approach is exactly what makes the circular economy more than a buzzword; it’s a practical framework for balancing profit with purpose.

 

Digitalisation: Bridging Gaps and Levelling Playing Fields

 

Of course, any conversation about MSMEs in 2024 must include the rapid acceleration of digitalisation and the new frontier of generative AI. The OECD’s contribution to the report highlights a truth we can’t ignore: the digital divide is real, and it risks leaving small businesses behind.

 

While many MSMEs have adopted basic digital tools to keep operations afloat during the pandemic, significant gaps remain when it comes to more advanced tech. Large companies still outpace MSMEs in adopting cloud computing, AI, and advanced data analytics the very tools that fuel productivity, innovation, and competitiveness.

 

Yet there is a silver lining. Generative A,I once the domain of tech giants, is now more accessible than ever. New research shows that 18% of MSMEs across seven OECD countries are already experimenting with it. From automating routine tasks to enhancing customer engagement, AI has the potential to level the playing field, provided MSMEs possess the necessary skills, support, and cybersecurity to utilise it effectively.

 

That’s why capacity building, digital literacy training, and inclusive policy frameworks are so critical. We can’t assume that technological progress alone will lift all boats; we have to make it so.

 

The Call to Action: From Celebration to Collaboration

 

Since 2017, the world has marked June 27th as Micro, Small, and Medium-Sized Enterprises Day, an annual reminder that these businesses are at the heart of sustainable development. This year’s theme, Human Centred Impact Advancing the UN SDGs through MSME, couldn’t be more timely.

 

But let’s be honest, a single day of celebration means little if it doesn’t spark real, lasting action.

 

The report calls for governments, large businesses, civil society, educators, and international organisations to close the gap between our promises to support MSMEs and the reality they face. This means fair access to finance. Practical guidance on sustainability. Robust digital infrastructure. And above all, policies that value human well-being as much as economic output.

 

For those of us who work with, buy from, or simply live alongside MSMEs, the challenge is to see them and treat them not as an afterthought in global development but as the very foundation.

 

Rising Together: A Shared Journey

 

As Dr. ElTarabishy writes, MSMEs are transforming the world by driving impact and addressing community needs… Today, I pose the question to you: What steps will we take to support the evolving needs of MSMEs

 

In the words of Maya Angelou’s “Still I Rise,” which the report echoes so beautifully, the spirit of MSMEs is one of rising again and again, against all odds.

 

Now it’s our turn to rise with them to invest in humane entrepreneurship, to champion inclusive digitalisation, to support climate resilience, and to embed the principles of circularity in how we create and consume.

 

If we do, the future we’re shaping won’t just be more sustainable, it will be more humane, more resilient, and more equitable for all.