s the global trade landscape evolves—shaped by geopolitical tensions, technological disruption, and shifting economic paradigms—small and medium–sized enterprises (SMEs) are disproportionately exposed to risk. SMEs remain the backbone of employment, market competitiveness, and inclusive growth in both developed and emerging economies but they are more vulnerable to economic turmoil. At this critical moment, investment policy must do more than support SMEs—it must prioritize them as a central pillar of future–ready economies.
A robust SME–focused investment policy removes barriers to entry and growth for smaller, local businesses, while also fostering local innovation and enhancing labor market participation. Forming a successful SME–focused investment policy requires public–private cooperation across economic sectors to expand access to capital, modernized infrastructure, and digital readiness.
Mutual Dependency as a Strategic Incentive
The success of multinational corporations (MNCs) is inextricably linked to the health of the ecosystems in which they operate. The competitiveness of large firms depends on a stable, diverse, and innovative network of suppliers, partners, and customers—many of which are SMEs. This mutual dependency is an untapped strategic advantage. MNCs can be further incentivized—through procurement preferences and innovation grants—to invest in the ecosystems of SMEs across their value chains.
A Call for Business Leadership
Investment policies must reflect this interdependence. Policies that promote information and communications technology infrastructure development, harmonize regulatory standards, raise de minimis thresholds, and fund workforce development directly benefit both small and large enterprises. Business associations can serve as crucial intermediaries—connecting government priorities and SME challenges with private sector innovations, technical capacity, and long–term investment strategies.
An Investment Policy for Shared Prosperity
The private sector and private capital have a strategic opportunity to advance a more resilient and competitive digital economy—one that strengthens democratic governance, cybersecurity, and fair competition. Such public–private investments are not only essential for unlocking the full potential of SMEs as drivers of innovation, job growth, and market demand, but for future–proofing markets for the coming AI economy.
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Investment policy to empower small business
As the global trade landscape evolves, small and medium enterprises are at particular risk. Image by Thomas Ulrich from Pixabay
April 24, 2025
In this evolving global trade landscape, SMEs are disproportionately exposed to risk. SMEs are the backbone of employment, market competitiveness, and growth—investment policy must prioritize them as a central pillar of future–ready economies, writes CIPE’s Louisa Tomar.
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s the global trade landscape evolves—shaped by geopolitical tensions, technological disruption, and shifting economic paradigms—small and medium–sized enterprises (SMEs) are disproportionately exposed to risk. SMEs remain the backbone of employment, market competitiveness, and inclusive growth in both developed and emerging economies but they are more vulnerable to economic turmoil. At this critical moment, investment policy must do more than support SMEs—it must prioritize them as a central pillar of future–ready economies.
A robust SME–focused investment policy removes barriers to entry and growth for smaller, local businesses, while also fostering local innovation and enhancing labor market participation. Forming a successful SME–focused investment policy requires public–private cooperation across economic sectors to expand access to capital, modernized infrastructure, and digital readiness.
Mutual Dependency as a Strategic Incentive
The success of multinational corporations (MNCs) is inextricably linked to the health of the ecosystems in which they operate. The competitiveness of large firms depends on a stable, diverse, and innovative network of suppliers, partners, and customers—many of which are SMEs. This mutual dependency is an untapped strategic advantage. MNCs can be further incentivized—through procurement preferences and innovation grants—to invest in the ecosystems of SMEs across their value chains.
A Call for Business Leadership
Investment policies must reflect this interdependence. Policies that promote information and communications technology infrastructure development, harmonize regulatory standards, raise de minimis thresholds, and fund workforce development directly benefit both small and large enterprises. Business associations can serve as crucial intermediaries—connecting government priorities and SME challenges with private sector innovations, technical capacity, and long–term investment strategies.
An Investment Policy for Shared Prosperity
The private sector and private capital have a strategic opportunity to advance a more resilient and competitive digital economy—one that strengthens democratic governance, cybersecurity, and fair competition. Such public–private investments are not only essential for unlocking the full potential of SMEs as drivers of innovation, job growth, and market demand, but for future–proofing markets for the coming AI economy.
