Blog: Resilience and recovery for good: Business support organizations critical actors for business survival
Business support organizations help businesses survive and thrive, which in a crisis is more important than ever
Right now, small businesses are facing multiple challenges to keep staff healthy, shift to remote working, maintain revenue, reduce costs, manage risks, respond to opportunities and prepare for the future. Business support organizations can offer well-timed, context-specific and trusted solutions to overcome the immediate health crisis and make the path to a productive new normal as rapid as possible¹.
Business support organizations deliver services to and represent the interests of businesses to support their growth. They are chambers of commerce, sector associations, trade promotion organizations, investment promotion agencies, and also co-operatives, logistics companies or banks. When they work together they create growth opportunities for firms, competitive advantage for a country and help deliver on economic, social and environmental objectives².
A range of interventions for business
Business support organizations must at the very least continue to deliver on their mandate, even though they are themselves facing health concerns, teleworking challenges and risks to their sources of revenue. The organization’s core job – to help businesses grow – remains pivotal. They must be proactive, despite disruption and anxiety, and forge their place at the front line. To respond with even more power at this time, these organizations can deploy seven interventions that create unique value.
1. Being a source of trusted information and advice
In times of uncertainty, good information creates competitive advantage. A business support organization can curate information on COVID-19 from a business perspective, perhaps with a specialized webpage that includes:
- links to government agencies dealing with the pandemic;
- commentary about packages of business support;
- guidance on business continuity and risk, leadership through crisis, cost-reduction ideas, downsizing or managing bankruptcy;
- information on impact on trade flows and market access;
- inspiration and information on opportunities for business to grow and diversify markets;
- information on solutions available to support businesses from the business support ecosystem.
2. Building bridges between policymakers, funders and small businesses
Government support must be deployed with unprecedented speed, offering certainty, empathy and hope for affected micro, small and medium-sized enterprises, along with practical solutions. The needs of business must be heard for this process to be effective. Good business support organizations benefit from their knowledge of business, their convening power, and their credibility to represent micro and small businesses during this process; they can communicate and deploy the solutions as partners of policymakers and funders.
3. Coordinating action to deliver economies of scale and scope
Businesses working together can reduce costs through shared procurement, create economies of scale, and access new opportunities by sharing knowledge and resources. This is important to ensure rapid response during the health crisis and the following economic recovery phase. Such collaboration benefits from a business support organization which can bring businesses together, match the opportunities with a shared offer or common need, and test willingness to cooperate in ways that are neutral, fair and respect commercial sensitivities.
4. Delivering services to access new value chains and diversify markets
As value chains are disrupted, small businesses must be agile and able to diversify their markets. Because business support organizations can act on behalf of many micro and small enterprises, they are in a great position to shoulder some of the risks when entering new markets or international value chains. They conduct and share research, build in-market networks of partners and experts, and break down tariff and non-tariff barriers, including through sharing ITC’s market analysis tools, or blogs and podcasts from in-market experts.
5. Acting within an ecosystem to deploy solutions for resilience and recovery
A good ecosystem of business support actors has shared objectives and complementary strengths, and includes public and private sector organizations, financial and logistics service providers, academia etc. At times of crisis these actors work together willingly, and can create shared value by combining resources for agile responses. For example, a bank and business support organization could promote an emergency bank loan with reduced collateral requirements for businesses with a record of having engaged with a business support organization.
6. Allocating resources for impact that lasts, including the Sustainable Development Goals
With a focus on rapid business recovery, this crisis could result in even greater inequality and more climate risk. Business support organizations have a crucial role in supporting business recovery, but also in connecting this to the imperative for sustainable and inclusive growth. This crisis creates an opportunity to shift some of their effort away from existing businesses to innovative start-ups, from urban to rural areas, and from exploitative to climate-friendly and socially-responsible sectors, with a view to the greater good that lasts.
7. Providing credibility and access for new opportunities
Disrupted supply chains may provide unknown players a chance to gain a foothold, but they may face reluctance from buyers who prefer to establish trust first. Business support organizations can boost credibility by providing independent confirmation of a company’s legal status, size and capacity to deliver. Furthermore, certain organizations leverage the authority of a government agency to access high-level influencers or to negotiate special conditions.
Untapped opportunities for resilience and recovery for good
Although most business support organizations have been prompt in acknowledging the crisis, and have provided useful links to information sources that are relevant to business, few have responded with new services or opportunities³.
From our initial review, a few weeks after the crisis hit Europe, none of these organizations had taken a COVID-19 perspective across all of the intervention areas. This is an untapped opportunity for business support organizations to step up by building the knowledge, trust, connections and new solutions that will make a difference during the COVID-19 pandemic, in its immediate aftermath, and in the shape of our shared future.
¹ Check out examples at http://tisibenchmarking.org/BMLayouts/GoodPracticeLibrary.aspx
³ For examples: https://www.enterprise-ireland.com/en/About-Us/Services/Covid-19/Supports/ https://covid19.nzte.govt.nz/