A seat at the table - why small businesses need big changes to the global trade system

27th June is the United Nation’s International Micro, Small and Medium Sized Enterprise (MSME) day.  It’s not a day many of us will have heard of, but it’s of real importance.

In the Global South, small businesses play a vital role in the provision of jobs and livelihoods. They represent 99.6% of all businesses and 76.6% of all employment in South Asia, while in East Africa, they account for 90% of all businesses and 80% of employment. They also tend to employ more women compared to bigger businesses. 

Small businesses often have deeper roots in their local communities than their larger counterparts and many of the businesses we work with are doing much more than providing employment. 

Changing social norms

For example, Sadhna, based in Udaipur, Rajasthan, aims to employ as many women as possible from discriminated against castes who would otherwise be unable to earn an income. Currently, they employ over 700 women, and former artisans are represented on the board and at all levels of management.  

Sadhna is more than a business - it's a social safety net, providing artisans with training, education, an emergency support fund, insurance and links to social security schemes.  

One of the conditions of taking employment at Sadhna is that women have to open a bank account which they have full control over, so that their salaries remain their own.  

Over the last 20 years, the Sadhna facility in the town of Delwara has grown in importance, as more than just a place of work – but a catalyst for social change for women:  
 
“When I started [at Sadhna], girls were not allowed out of the house in my community. Now the mindset has changed.” - Pushpa Tank, an artisan employed at Sadhna. 

Pushpa Tank, at Sadhna in the artisanal factory in Delawara, Udaipur. Photo credit: Transform Trade/Ruchika Jain

Former CEO, Smriti Kedia, explains further: 
“The centre there is looked at as a space for the women. Men don’t easily enter this space. That kind of space in a male dominated area is not easy. That is social change. They have become an institution that is contributing to the development of their area.  This social change is difficult to capture in words or numbers. Today artisans will negotiate – they don’t take things silently if they don’t see it as correct. That is powerful. That is the real change that we see.”

Addressing climate change

As well as their social value, small business are increasingly recognised for the crucial role they can play in addressing climate change. This is captured in the Villars framework, a blueprint for aligning trade and climate priorities developed by 100s of experts globally.

Despite their huge value across different issues, small, ethical businesses get very little voice in trade discussions, especially if they are based in the Global South. For example, there is nothing specific to small business in either of the big international strategies that the UK launched last year (the Integrated Review of Foreign Policy and Defense and the International Development Strategy).  

This matters because the world of trade is already changing in response to climate change. From deforestation rules to carbon border taxes, there will be a lot for businesses to take on board. Whilst it’s good to see serious action being taken on these important issues, our partners already tell us that they find complying with these rules difficult. Because they are not part of designing the new systems, there’s a huge risk that they will find themselves cut out of supply chains, undermining jobs and community support. 

Small businesses play a vital role in building a fairer trade system

The businesses we partner with are doing fantastic work every day. They are putting workers on their boards, making sure that women are at the heart of what they do and looking for innovative ways to deal with climate change.

But they need a level playing field to thrive, and they don’t get that. Sometimes it’s pressure in supply chains, orders that are cancelled last minute, demands to lower prices, or it can be global rules that just don’t work for them.

MSME day is a recognition that they are absolutely crucial to a sustainable future for everyone, and it’s time they got their seat at the table.