Taking on the big boys: small businesses can power economies

If you are a manager of a small or medium-sized company you are probably focused on your immediate business challenges. But did you know that SMEs generate half of gross domestic product in the G20 economies, account for three-quarters of formal employment and create 80 per cent of net job growth?

Research by Accenture and Alibaba Group - which owns the South China Morning Post - shows that the value of cross-border business-to-consumer e-commerce is set to grow from US$230 billion in 2014 to US$994 billion in 2020 and account for almost 30 per cent of all B2C online retail. Much of this is driven by SMEs.

One reason why SMEs have become an important part of our global economy is that they have addressed many traditional challenges – such as logistics and the cost of scaling up – through digital solutions. Leveraging analytics, Big Data, apps and social media, SMEs are reducing the costs of identifying new customers, striking new partnerships and establishing brands.

Smaller companies also have a size advantage – they are often nimbler than their behemoth competitors. Our advice to all businesses is to lead industry disruption – don’t be the disrupted. One way to lead is to work with partners. We have found that many of the companies most prepared to disrupt are more engaged in growing and broadening their ecosystem partnerships and are willing to collaborate to support innovation, research, development and the launch of new products.

That means developing a network of alliances to build operating models that are greater than the individual business. Think of it as a school of fish swimming together to ward off bigger predators. But this approach is even better than that: it’s not just a defence mechanism, it’s a growth strategy.