Twin transition policies for a sustainable recovery: an SME perspective

Abstract

There is a growing recognition of the importance of Small and Medium-sized Enterprises (SMEs) for the local and global economic development. Especially after the outbreak of the Covid-19 pandemic, which revealed the major vulnerability of SMEs and entrepreneurs hit more severely by the crisis, there has been an increasing number of international and local organisations, both governmental and non-governmental, that shifted their attention to this sector. If, on one side, the pandemic crisis devastated the economies around the world, on the other side it turned out to offer some new prospects for potential opportunities, accelerating (the need for) what seemed to be an imminent shift. Governments started to collect and organise their resources to help SMEs endure and survive to the crisis (during the rescue phase) and to strengthen their structural and sustainable growth with a longer-term view (during the recovery phase). It is during such a period of delicate transformation that it is relevant to understand the pivotal points around which new economic (development) models could revolve. Among these, the “twin transitions” – involving both digital transformation and greening of small businesses – appear to be a key element of the post Covid-19 recovery and a source of growth and competitiveness. The concept of making business performances more resilient and environmentally sustainable has not only become a mainstream thought, but a concrete necessity: green and digital options, thus, represent two sides of the same coin, that could successfully drag SMEs out of the deep crisis led by Covid-19 and structure more resilient and sustainable economies. To achieve these goals SMEs should be considered taking into account their main features: their great potential contribution in shaping the future economic models and the challenges they have always been facing, especially during the Covid-19 pandemic. Among these, the improvement of access to finance is key in ensuring a stable recovery for SMEs.