UN Geneva - Multimedia Newsroom : ITC Presser - Launch of the Competiveness Outlook 2021

ITC Presser - Launch of the Competiveness Outlook 2021 23 June 2021

20:17

MP4

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23-06-2021

Edited News , Press Conferences | UNOG

ITC Presser - Launch of the Competiveness Outlook 2021 23 June 2021

ENG

Shotlist Story

STORY: Empowering The Green Economy - ITC

TRT: 02 min 34s

SOURCE: UNTV CH

RESTRICTIONS: NONE

LANGUAGE: ENGLISH / NATS

ASPECT RATIO: 16:9

DATELINE: 23 JUNE 2021 GENEVA, SWITZERLAND

SHOTLIST

Exterior wide shot, Palais des Nations flag alley, nations’ flags flying, a sunny day.

Medium shot: podium speakers seated next to large screen TV relaying broadcast image of the press conference, Room XIV, Palais des Nations
SOUNDBITE (English): ITC Executive Director, Pamela Coke-Hamilton: “The pandemic has shown that the resilience of businesses matter. It has also laid bare a resilience divide between small and large firms. Developed countries have the financial means to sustain their economies and protect the most vulnerable. But most developed and least developed countries are unable to do the same.”
Medium shot, journalist, masked and seated, texting on mobile phone in front of laptop.
SOUNDBITE (English): ITC Executive Director, Pamela Coke-Hamilton: “If such resilience was necessary during the pandemic, it will be even more crucial in addressing climate change. The economic disruption of climate change is expected to be like that of a COVID-19-size pandemic happening every decade. Going green is a survival imperative; the longer firms take to act, the higher the costs become.”
Medium shot, journalists seated, masked and distanced.
SOUNDBITE (English): ITC Chief Economist Barbara Ramos: “We need to learn from COVID in order to increase the resilience of small firms. So what have we learned? Our SME report last year showed that two out of three micro and small firms were strongly affected by the pandemic, and that’s compared to half of large firms; we know that. We also know that one in four micro firms were at risk of shutting down within three months and this is compared to one in 10 large firms.”
Medium shot, side view of podium speakers seated during press conference.
SOUNDBITE (English): ITC Chief Economist Barbara Ramos: “This matters because we found that companies that were resilient to this crisis were five times less likely to fire employees during the crisis, five times less likely. And if you add to that the fact that SMEs employ a large share of the world’s population, their resilience really does matter.”
Medium shot, participant, seated and masked, following the press conference slide presentation on his laptop.
SOUNDBITE (English): ITC Executive Director, Pamela Coke-Hamilton: “During the pandemic, the liquidity of banks especially in the Caribbean was upwards of $9 billion, but somehow they lacked the ability to attribute value to the green transition process and what this will mean. And so it’s also important for BSOs and governments to advocate with the financial institutions to help them understand the long-term strategy and the need to invest and allow you know this kind of support to come into effect.”
Medium shot, journalist, seated with reading glasses resting on forehead which he then puts on, examining ITC report.
Medium-wide shot, journalists, seated and distanced, with podium speakers to rear.

Small businesses unprepared for pandemic-sized climate shock ‘every decade’: ITC

Small businesses which make up more than half of the global workforce were 2.5 times more likely to go under than larger firms in the first months of COVID-19, the International Trade Centre (ITC) said on Wednesday, warning that the impact of climate change is likely to cause pandemic-scale disruption “every decade”.

Highlighting the lack of investment in environmental adaptation among micro and small businesses in less-developed economies, ITC Executive Director Pamela Coke-Hamilton noted that only 38 per cent of small businesses had taken action, compared to 60 per cent of large firms.

“The pandemic has shown that the resilience of businesses matter,” she told journalists at UN Geneva, noting also that small businesses accounted for 50 per cent of global emissions.

“It has also laid bare a resilience divide between small and large firms. Developed countries have the financial means to sustain their economies and protect the most vulnerable. But most developed and least developed countries are unable to do the same.”

Ms Coke-Hamilton added that if such resilience among micro and small businesses was necessary during the pandemic, “it will be even more crucial in addressing climate change. The economic disruption of climate change is expected to be like that of a COVID-19-size pandemic happening every decade. Going green is a survival imperative; the longer firms take to act, the higher the costs become.”

Presenting the agency’s latest report, SME Competitiveness Outlook 2021: Empowering The Green Recovery, ITC Chief Economist Barbara Ramos insisted that governments needed to understand the level of vulnerability of small firms in the first year of the pandemic.

“We need to learn from COVID in order to increase the resilience of small firms….Our SME report last year showed that two out of three micro and small firms were strongly affected by the pandemic, and that’s compared to half of large firms; we know that. We also know that one in four micro firms were at risk of shutting down within three months and this is compared to one in 10 large firms.”

This matters, Ms. Ramos insisted, because companies that managed to withstand the economic downturn caused by COVID-19 “were five times less likely to fire employees during the crisis. And if you add to that the fact that SMEs employ a large share of the world’s population, their resilience really does matter.”

To help small businesses rebuild from the pandemic and prepare for the climate crisis while becoming more competitive, Ms. Coke-Hamilton maintained that urged they will need the support of a network of private and public partners to boost their means to withstand future shocks.

To guide this process, ITC’s report provides a 20-point Green Recovery Plan to help small businesses become more competitive, resilient and green.

“During the pandemic, the liquidity of banks especially in the Caribbean was upwards of $9 billion, but somehow they lacked the ability to attribute value to the green transition process and what this will mean,” she said, urging governments to advocate with financial institutions “to help them understand the long-term strategy and the need to invest.”

According to ITC, nearly 60 per cent of African companies that invested in greening their enterprise said that this led to new, higher-quality and more products. Access to new markets was also a byproduct of this investment along with lower costs.

ends

Teleprompter

[Other language spoken]

Welcome to the press conference of the International Trade Centre for the launch of the SME Competitiveness Outlook 2021.

This is our flagship report, and this year it features new findings on how small businesses can rebuild from the pandemic while preparing for the looming climate crisis.

I'm here with our Executive Director, Mrs Pamela Co Hamilton, and with our Chief of Research and expert Strategies, Mrs Barbara Ramos.

I will hand the word now over to our Executive director, who will share with us some key findings and recommendations from the report.

[Other language spoken]

As the world looks to recover from the devastation bought by COVID-19 is essential to do so in a way that prepares us for future upheavals, most notably the looming crisis of climate change.

This is especially necessary for micro, small and medium sized enterprises, which have suffered disproportionately from COVID-19 and measures to contain it.

Small firms account for over 90% of businesses and more than 50% of jobs worldwide, so their faith is tied with that of large swaths of our societies, especially in developing countries.

They also contribute to global warming, accounting for more than 50% of natural greenhouse of sorry of industrial greenhouse gas emissions.

This is why IT CS flagship SME Competitiveness Outlook this year is devoted to empowering the green recovery.

Our report focuses on the dual challenge that small businesses face, how to prepare for future shocks while at the same time strengthening their current competitive position.

To map out how this can be done, we need to learn from the COVID-19 crisis.

The pandemic has shown that the resilience of businesses matter.

It also laid bare a resilience divide between small and large firms.

Developed countries have the financial means to sustain their economies and protect the most vulnerable.

But most developing and least developed countries are unable to do the same.

In these countries, many SMEs succumb to the shock.

For our report, we looked at what makes for resilience in businesses.

We found that the best performing companies had in place a series of key business fundamentals.

One, good inventory management.

[Other language spoken]

5 employees with the right set of skills.

Small businesses were less equipped with these ingredients than larger firms.

If such resilience was necessary during the pandemic, it will be even more crucial in addressing climate change.

The economic disruption of climate change is expected to be like that of COVID-19 sized pandemic happening every decade.

Going green is a survival imperative.

The longer firms take to act, the higher costs become.

Small businesses in developing countries can either adapt now, when opportunities abound and support is available, or will be forced to do so later at greater expense and little or no funding.

Going green is also a business opportunity.

While small businesses are aware of and concerned about the risk, they're not taking the necessary measures to adapt.

These firms are worried, our data shows, but they need a wide range of support to successfully transition.

Our report unveils a green recovery plan for four groups that can help small businesses be competitive, resilient to climate hazards and contribute to a safer planet.

These are business support organisations.

Governments lead firms in international value chains and international organisations.

For example, governments can help companies cover the costs of going green through subsidies, tax incentives and purchasing through public procurement rules.

They can also adopt rules and policies that make it easier for firms to access financing, as illustrated in the contribution to our report by our own Minister of Foreign Affairs from Jamaica is Kamina Johnson Smith.

Business support organisations, for their part, can train firms to boost their environmental performance, as shown in the report's contribution by the CEO of Costa Rica's export performance agency, Pro Comer.

Both the public and private sectors, national and international, can work together to get small firms connected, which is vital for their resilience.

This includes tackling the causes of what is known as the adoption gap, where there is broadband but people and businesses are not connected to it or don't have the skills to use it.

We at ITC are fully committed to supporting SMEs in the green transition to ensure that our partners in developing countries have the capacity and resources to respond to the climate change and pivot successfully.

To this end, we adopted the Green to Compete strategy, which brings together our large and diverse offering on environmental sustainability.

Through this, ITC will support partner countries more effectively in leveraging the green transition in and to increase their trade competitiveness.

ITC is not alone in this endeavour.

Many public and private bodies across the globe are devoting resources to build back better from COVID-19.

We need to work together to incorporate environmental sustainability into business operations, investment choices, national policies and international commitments and place SMEs at its core.

It is only in this way that we can ensure that the recovery is sustainable and reaches as many people as possible throughout the world.

Thank you very much.

[Other language spoken]

And I hand the word now to our Chief Economist, Barbara Ramos.

Barbara, over to you.

Thank you, Vittorio.

I will walk you through some of the findings and statistics contained in the report.

Very briefly, we can start the presentation please.

As our Executive Director mentioned in her opening remarks, we need to learn from COVID in order to increase the resilience of small firms.

So what have we learned?

Ours, Michael, from last year showed that two out of three micro and small firms were strongly affected by the pandemic and that's compared to half of large farms.

[Other language spoken]

We also know that one in four micro farms were at risk of shutting down within three months and this is compared to one in 10 large farms.

So that's what we learned.

We know that and that was the starting point of our research because we wanted to understand why, why is it that they were less resilient?

And this matters because we found that companies that were resilient to this crisis, we're five times less likely to fire employees during the crisis, five times less likely.

And if you add to that the fact that SMEs employ a large share of the world's population, their resilience really does matter.

[Other language spoken]

Oh, this one is correct.

1 And it matters because we're not going to face a crisis.

We are already facing the climate crisis.

68% of companies interviewed by ITC in sub-Saharan Africa said that environmental risks are already a competitiveness risk for their business.

And this number goes up to 93% for companies in agriculture.

[Other language spoken]

So they are concerned, they are aware that they're not investing.

60% of large firms reported investing in at least one measure to build their climate resilience, but only 38% of SM ES said they did the same thing.

And we found similar differences when we compared women LED businesses versus male LED businesses, youth LED businesses versus non youth LED businesses and non exporting versus exporting companies.

So there is a difference between those that are investing and those that are not investing and those not investing, unfortunately.

The SM ES next slide please.

So how do we change this?

SM ES are cash strapped, especially now in the context of COVID.

How can we ask them to shift the focus from survival and current competitiveness to long term resilience?

But what we found in our research may be a a good signal for that because we found that some characteristics that make companies competitive in the short term can also make them resilient in the long term.

And as the ET mentioned, these are not earth shattering, very complex things.

These are basic business fundamentals such as having a bank account doing, doing efficient inventory management.

So if they can focus on those few fundamentals, they can be competitive and resilient.

[Other language spoken]

Now, these fundamentals are necessary, but in the context of the climate crisis, they are not sufficient.

Some specific measures are also required, and these are measures such as investing in resource efficiency, investing in digital technologies and connectivities, as was mentioned before.

And together these measures constitute the business case for SM ES going green.

In our research, we found that 58% of SM ES expected climate measures to impact them negative negatively, but 39% actually expected some positive impact.

So they're seeing the business opportunities in this green transition next slide.

And in fact those investments pay off.

We followed a few of the farms in our risk resource efficiency interventions at ITC and we saw that those that did invest in some of those measures were actually getting business benefits such as increased product quality, access to new markets, new products.

So again, these are paying off and some pay off quite quickly.

Some of the the low hanging fruits such as changing the lighting in your in your business, they can pay off quite quickly, but they're not sufficient.

Again, we need to assist SM ES in transitioning to more long term and potentially more costly measures.

And for that we need support.

Next one.

So while they're seeing opportunities, some of these investments are paying off.

Why isn't everyone going green?

Well, let's start talking about some of the challenges.

The first one is regulation.

And here I want to emphasise that regulation is not bad per SE.

It's not whether we should have regulation.

We all know that this is important for us to really tackle the climate crisis, but we need to do regulation in such a way that does not overburden SM ES.

And what we found is that 28% of African companies already see regulation as an obstacle to their business.

Now they're already seeing regulation as an obstacle to their business.

Next one and we had similar findings when we talk about private sector regulation, for instance, standards, they increased from about 15 in the 80s to over 260 nowadays.

That could be a good sign.

[Other language spoken]

We're, we're increasing the ability of companies to to comply with certain certifications, but it's also costly for firms and it's also confusing.

So the smaller the firm, the less likely it will be certified to a sustainability standard.

Only 5% of micro farms actually had some sort of sustainability certification.

[Other language spoken]

So to conclude, to overcome some of these and other obstacles, we finish our report with some very concrete actionable recommendations to actors in the business environment to support the small businesses in their green transition.

Without the support, even though the business case may be strong and sometimes it isn't, SM ES need support in order to transition.

[Other language spoken]

And we will soon now open for questions.

I just would like to remind you all that we have sent the report in advance.

If by any reasons you have not received it, it's available on our website and so is the press release that you know we have released today.

I would like also to take this opportunity to inform you that tomorrow at 15 hours Geneva time, we will broadcast live a talk show on the findings of the report.

It will be an interactive conversation between former BBC journalist Claire Dole and our executive Director, Mrs Pamela Co Hamilton.

It will be live streamed on our Facebook and LinkedIn account.

So I encourage you all to please connect and participate.

I will now open to questions and I'm looking at the platform if there are any questions.

[Other language spoken]

I was waiting for someone to ask a smart question and since nobody volunteers, I'm always available for a silly 1.

So first, I am a bit, I don't know how to phrase it, admirative of the creativity of terminology in large organisation.

What is a thought leader and whose thought and for whom is it?

Are these people leaders?

[Other language spoken]

This is a legacy terminology that we have at ITC since the beginning of the publication of the SME Competitiveness Outlook.

We invite people that let's say influence thought in their respective areas.

So for instance, in this particular report, we felt it was interesting to have the government voice.

So we have a representative from the government, we have a representative from a business support organisation, we have somebody from academia, we have also business voices, not only this influential people, but the business voices that we believe should be influential as well.

So this is where they can they come in to provide a little bit of flavour in the areas in which they influence, in which they operate.

[Other language spoken]

And the second question, indeed, you evoked yourself, you you hinted at why if it pays, if it's obvious, if everybody agrees, why don't we all go green?

But this is a crucial question and we meet that question over and over again.

If things pay, you will always find or you should find bankers or contortion of banks Oregon cooperative of enterprise thinking that why invest in what where we will lose and not invest where we will gain.

And so why is it so difficult to have companies, banks, the world economy invest in what brings return, and it is so easy to convince them to invest where they are sure to lose everything?

[Other language spoken]

That's, that's actually a great question.

And in a way it kind of got me thinking that perhaps we could ask, you know, why isn't there World Peace?

Unfortunately, the, the, the, the realities of politics, the realities of vested interests, the realities of those who lack capacity all come together to make it difficult.

[Other language spoken]

Many businesses recognise how important it is to do this, but they lack two things.

One has to do with the cost.

The upfront cost of investing and going green, particularly for many MSMESI, can speak from my region.

The cost of implementing, for example, a solar panel upfront is anywhere from 25 to 40,000 upfront and takes about 10 years for you to recover that kind of investment.

The second issue is capacity.

Sometimes they just don't have the information or know exactly how to go about doing it.

So then when you combine the factors that are specific to to small businesses and you combine that also with the fact that many governments unfortunately have not created the ecosystem that allows or encourages or incentivizes small businesses to adapt.

So for example, in I give you a specific example because it was very interesting.

Barbados took on the brought in electric cars.

This was about 6-7 years ago and it was a great thing.

Everybody was happy.

Once people started buying the cars and the government saw it as a potential source of revenue, they increased the tariff by 80%, something that's supposed to reduce emissions, something that was welcomed as a green transition, but it then came down to the financial purse and what could be gained from it.

And so there there are many factors that governments also need to look at in incentivizing businesses to go green, in helping them access finance.

And this includes engaging with the banks.

One of the other issues we have, for example, is during the pandemic, the liquidity of banks, especially in the Caribbean was upwards of 9 billion, but somehow they lack the capacity to attribute value to the green transition process and what this will mean.

And so it's also important for Bsos and governments to advocate with the financial institutions to help them understand the long term strategy and the need to invest and allow this kind of, you know, support to come into effect.

So those are the kinds of, you know, mutually supporting areas and issues that need to take place.

I, I wish it were as simple as it's good for you.

[Other language spoken]

Sometimes it's good for you.

[Other language spoken]

But, you know, sometimes the, the, the, the surrounding system does not support it in a way that we would envisage would be natural, if you know what I mean.

[Other language spoken]

Are there any other questions?

I don't see any hands raised.

So if not, we thank you all and again, you know, please feel free to contact us if you would like more information about the report.

[Other language spoken]