Mohamed M. KamalNovember 2007

Mohamed M. KamalNovember 2007

“Business is the most important engine of economic change. It brings employment,

goods, revenues, knowledge and skills development. We must also recognize that

the most important role is probably not that played by the multinationals, but by the small and medium enterprise sector, the SMEs. We as global companies can provide the catalyst

to partner with SMEs to mutual benefit.We can access their local expertise and

markets; they can access our technologies and business skills for local momentum.”

Michael Pragnell, CEO, Syngenta

“Business is the most important engine of economic change. It brings employment,

goods, revenues, knowledge and skills development. We must also recognize that

the most important role is probably not that played by the multinationals, but by the small and medium enterprise sector, the SMEs. We as global companies can provide the catalyst

to partner with SMEs to mutual benefit.We can access their local expertise and

markets; they can access our technologies and business skills for local momentum.”

Michael Pragnell, CEO, Syngenta

Facts

Global wealth has almost doubled since 1990, but nearly half the world’s population

subsists on less than US$ 2 per day. Poverty remains a major challenge to

sustainable development, environmental security, global stability and a truly global

market. The key to poverty alleviation is

economic growth that is inclusive and reaches the majority of people. Improving the performance and

sustainability of local entrepreneurs and small and medium enterprises (SMEs),

which represent the backbone of global economic activity, can help achieve this

type of growth

Facts

Global wealth has almost doubled since 1990, but nearly half the world’s population

subsists on less than US$ 2 per day. Poverty remains a major challenge to

sustainable development, environmental security, global stability and a truly global

market. The key to poverty alleviation is

economic growth that is inclusive and reaches the majority of people. Improving the performance and

sustainability of local entrepreneurs and small and medium enterprises (SMEs),

which represent the backbone of global economic activity, can help achieve this

type of growth

53 countriesThousand languages,Almost 900 million

people – as many as the European Union and the USA combined.

A continent with countless opportunities.

53 countriesThousand languages,Almost 900 million

people – as many as the European Union and the USA combined.

A continent with countless opportunities.

AfricaAfrica

Africa and poverty

Africa is the only region where poverty has been increasing over the last three decades.

At 46 percent, the rate of poverty in Africa in 2003 was 17 percentage points higher than in South Asia, the second poorest region of the world.

Poverty rates are generally high across Africa, they vary from a high of 69 percent in Mozambique to a low of 7.6 in Tunisia.

Sub-Saharan Africa and North Africa have the second and third highest unemployment rates after the Middle East.

Africa and poverty

Africa is the only region where poverty has been increasing over the last three decades.

At 46 percent, the rate of poverty in Africa in 2003 was 17 percentage points higher than in South Asia, the second poorest region of the world.

Poverty rates are generally high across Africa, they vary from a high of 69 percent in Mozambique to a low of 7.6 in Tunisia.

Sub-Saharan Africa and North Africa have the second and third highest unemployment rates after the Middle East.

In OECD economies SMEs and micro enterprises account for over 95% of firms, 60-70% of employment, 55% of GDP and generate the lion’s share of new jobs.

In developing countries, more than 90% of all firms outside the agricultural sector are SMEs and micro enterprises, generating a

significant portion of GDP.In Morocco, 93% of industrial

firms are SMEs and account for 38% of production, 33% of

investment, 30% of exports and 46% of employment.

In OECD economies SMEs and micro enterprises account for over 95% of firms, 60-70% of employment, 55% of GDP and generate the lion’s share of new jobs.

In developing countries, more than 90% of all firms outside the agricultural sector are SMEs and micro enterprises, generating a

significant portion of GDP.In Morocco, 93% of industrial

firms are SMEs and account for 38% of production, 33% of

investment, 30% of exports and 46% of employment.

Where and how many?Where and how many?

The global view: SMEs contribution to employment and GDP

The global view: SMEs contribution to employment and GDP

For government, SMEs contribute to wealth creation and generate tax revenues.

In society, they are an important source of employment.

In business, SMEs represent an important source of innovation.

SMEs have extensive local knowledge of resources, supply patterns and purchasing trends.

SMEs constitute an important source of local supply and service provision to larger corporations.

Role of large corporations in sustainable developmentRole of large corporations in sustainable development

Finding ways of doing business with low-income customers;

Develop and produce simple and affordable products;

Support SMEs seeking to become suppliers and distributors;

Provide infrastructure to help build markets;

Remove unfair subsidies and liberalize world trade;

Develop the concept of eco-efficiency or “doing more with less”;

Ensure supplies from sustainable resources.

Finding ways of doing business with low-income customers;

Develop and produce simple and affordable products;

Support SMEs seeking to become suppliers and distributors;

Provide infrastructure to help build markets;

Remove unfair subsidies and liberalize world trade;

Develop the concept of eco-efficiency or “doing more with less”;

Ensure supplies from sustainable resources.

They don’t pay or accept bribes. They are an equal opportunity

employer. They train staff and bring them into

their international circuits for a transfer of knowledge.

At present three quarters of their country chairs in African countries are

Africans, including in Nigeria. They are transparent in their payments

to governments. And they apply the Shell Group Health

Safety and Environment rules in all African operations.

Royal Dutch Shell set positive learning examples by applying a corporate

governance style.

Royal Dutch Shell set positive learning examples by applying a corporate

governance style.

What are the challenges?What are the challenges?

Limited access to capital because of weak domestic capital

markets.

Inability of entrepreneurs to leverage the capital that they

(informally) own.

Inadequate availability of physical infrastructure (including high cost and/or limited access to the

information (superhighway) .

Limited access to capital because of weak domestic capital

markets.

Inability of entrepreneurs to leverage the capital that they

(informally) own.

Inadequate availability of physical infrastructure (including high cost and/or limited access to the

information (superhighway) .

What are the challenges? (continued)What are the challenges? (continued)

Complex processes and red tape in the public sector which pose a large

entry barrier for entrepreneurs .

Continuing difficulties with high levels of official corruption which

reduces the economic incentives for entrepreneurs.

Difficulties in securing financial transactions which limits both the economic and geographical range of

transactions that entrepreneurs are able to engage in;

Complex processes and red tape in the public sector which pose a large

entry barrier for entrepreneurs .

Continuing difficulties with high levels of official corruption which

reduces the economic incentives for entrepreneurs.

Difficulties in securing financial transactions which limits both the economic and geographical range of

transactions that entrepreneurs are able to engage in;

What are the challenges? (continued)What are the challenges? (continued)

Weaknesses in the labor markets inhibiting access to well

trained labor .

Inadequate availability of SME-type support services including business incubators,

management advice, project preparation facilities, and technical

assistance.

Weaknesses in the labor markets inhibiting access to well

trained labor .

Inadequate availability of SME-type support services including business incubators,

management advice, project preparation facilities, and technical

assistance.

Regulations

TurnoverCompetition

Exchange rateTax burden

Cash flowOther

InflationInterest rate

Supply shortagesRent

ManagementRate of pay

Biggest Problems Facing SMESBiggest Problems Facing SMES

0% 5%5% 10% 15% 20%

Access to finance

Unskilled employee

25%

Sustainable development is development that meets the

needs of the present without compromising the ability of

future generations to meet their own needs (1987).

Sustainable development is seen as an ongoing process which moves activities away from unsustainability. (2007)

Sustainable development is development that meets the

needs of the present without compromising the ability of

future generations to meet their own needs (1987).

Sustainable development is seen as an ongoing process which moves activities away from unsustainability. (2007)

Sustainable developmentSustainable development

The three componentsof sustainable developmentThe three componentsof sustainable development

Healthy Environment Social JusticeSocial Justice

SustainableSocietySustainableSociety

Economic Growth

Sustainable DevelopmentAnd EnergySustainable DevelopmentAnd Energy

In order to survive every organism and organization needs energy.

This is true from the most basic biological cell to the largest multinational company.

Inability to secure energy at an economic cost threatens the economic environment to survive.

Expensive energy has been identified as a concern for many companies of all sizes.

Inefficient use of energy, contributes to the phenomena of Climate Change (global warming).

Global warming threatens the physical environment we need to survive.

In order to survive every organism and organization needs energy.

This is true from the most basic biological cell to the largest multinational company.

Inability to secure energy at an economic cost threatens the economic environment to survive.

Expensive energy has been identified as a concern for many companies of all sizes.

Inefficient use of energy, contributes to the phenomena of Climate Change (global warming).

Global warming threatens the physical environment we need to survive.

Energy for developmentEnergy for developmentEnergy Development

Access

Climate change

Security

MNCs: Localising operations

Local businesses: SMEs / Micro-entrepreneurs

People: Basic needs Product use

Growth

Environment

Business solutions

Eco-systems

Biodiversity

MNCs: Multinational Corporations

The World Business Council for Sustainable Development (WBCSD) is a global association of some 200 companies dealing exclusively with business and sustainable development. The Council provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organizations.

The World Business Council for Sustainable Development (WBCSD) is a global association of some 200 companies dealing exclusively with business and sustainable development. The Council provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organizations.

The World Business Council for Sustainable Development (WBCSD)The World Business Council for Sustainable Development (WBCSD)

WBCSD regional networkWBCSD regional network

The WBCSD’s Regional Network is an informal alliance some 55 CEO-led business

organizations around the globe that are united by a shared commitment to providing

business leadership for sustainable development (SD) in their respective countries

or regions.

The WBCSD’s Regional Network is an informal alliance some 55 CEO-led business

organizations around the globe that are united by a shared commitment to providing

business leadership for sustainable development (SD) in their respective countries

or regions.

Partnership between UNECA and WBCSDPartnership between UNECA and WBCSD

North African relevant stakeholders of SD should be allies of WBCSD,It is desirable that partnership

considers the economic, social, and environmental dimensions of SD in North

African countries,Partnership should be consistent with

national laws, national strategies for the implementation of Agenda 21 as well as the priorities of North African countries,

Communicate sustainable development practices using the work of

the WBCSD’s working groups as its platform and source.

North African relevant stakeholders of SD should be allies of WBCSD,It is desirable that partnership

considers the economic, social, and environmental dimensions of SD in North

African countries,Partnership should be consistent with

national laws, national strategies for the implementation of Agenda 21 as well as the priorities of North African countries,

Communicate sustainable development practices using the work of

the WBCSD’s working groups as its platform and source.

ConclusionsConclusionsMany SMEs face numerous barriers to

engaging in sustainability, but involving SMEs is essential for global sustainability.There is a significant number of initiatives,

but effectiveness has been questionable accessibility and coverage are the biggest

issues.While policy and framework conditions are vital, the private sector –specifically large

companies –need to become more engaged.Overall, significantly more action is still

needed…Keeping in mind, there is no one answer –

no one programme –that is going to serve as a panacea for all.

Many SMEs face numerous barriers to engaging in sustainability, but involving

SMEs is essential for global sustainability.There is a significant number of initiatives,

but effectiveness has been questionable accessibility and coverage are the biggest

issues.While policy and framework conditions are vital, the private sector –specifically large

companies –need to become more engaged.Overall, significantly more action is still

needed…Keeping in mind, there is no one answer –

no one programme –that is going to serve as a panacea for all.