#18 – SMEs and Urban Resilience
The COVID-19 pandemic lockdown measures have had devastating effects on jobs and local economies, especially on small and medium enterprises (SMEs). This 18th session of Cities on the Frontline focused on the importance of supporting SMEs for a city’s economy and how cities can collaborate with their local SMEs for a resilient and equitable recovery in the context of the partnership with Citi on the Catalyzing City Resilience Solutions (CCRS) program.
Amit Dhawan, Managing Director, Asia Head of Emerging Corporates at Citi Commercial Bank and co-host for the session opened the conversation with a brief introduction of the importance of supporting SMEs and the role that bank institutions such as Citi should take to help alleviate shocks and stresses such as the one caused by the COVID-19 pandemic. Amit emphasized the potential and critical value of SMEs as the backbone of economies worldwide that will be key to leading economic growth and creating jobs to support citizens at large but especially vulnerable groups including women and ethnic minorities. However, Amit pointed out, even when SMEs are vital, they are also the most susceptible to external shocks due to their size, their dependance on bank funding and their lack of access to capital markets. As final statement, Amit introduced Citi Foundation’s partnership with the Resilient Cities Network, on the CCRS program. It was conceptualized with the objective of providing better support for local SMEs in Asia, through more sustainable, innovative and long-term solutions for a resilient recovery that goes beyond pandemic response programs for the local economy.
Dr. Jose Di Bella from the University of Waterloo, complemented Amit´s remarks by framing the discussion with the findings of the report titled “Sustainable business practices can build resilient local economies for a post-COVID-19 recovery.” This report was a result of a rapid research effort under the University of Waterloo’ TRANSFORM project which aimed to understand the current state of SMEs. Based on research findings, Dr. Di Bella asserted that there are clear growth opportunities with SMEs and shared some recommendations to accelerate progress that is currently slow, fragmented and poorly understood to reach a more coherent and coordinated practice for a true economic growth that is resilient to shocks. These sustainability-oriented practices include collaborations on seeking new actors and new perspectives; planning with strategic placemaking, through the construction of public spaces and having new ways of leading community engagement; building social connections through digital spaces, among others. Dr. Di Bella concluded by recognizing that this report is the first step in supporting SMEs. Based on these research findings, the next stage of the TRANSFORM project will be to start defining implementation efforts for individual SMEs.
Following Dr. Di Bella´s presentation, Zuhaila Ahmad Zubel, Director of Town Planning Department, Melaka Historic City Council and Dr. Artiningsih Msi, Senior Lecturer, University of Diponegoro, Semarang gave the audience a clear view into the current state and role of SMEs in a resilient urban recovery after the COVID-19 pandemic by showcasing the perspectives from two cities working on providing support for SMEs under the CCRS program.
Zuhaila, illustrated the current situation in Melaka by sharing some of the findings of their work. Due to the COVID-19 pandemic, Melaka saw a decrease in tourism of 73.04% from 2019 to 2020 and since the service sector accounts for almost half of Melaka’s GDP, the city’s economy was severely hit. In order to recover, Zuhaila explained, they developed a plan that addressed job loss and poverty increase especially for women and the youth. Melaka City Council has been working on various efforts to deliver a resilient economic recovery. Among the initiatives that Zuhaila pointed out, are (i) exemption of 314 trishaw pullers in 2021, (ii) a 50% reduction on license renewal for small traders and hawkers, (iii) the development of online platform such as the E-Bazar MBMB which was an online market and delivery platform set in motion during Ramadan and the Interactive City platform which provides users with relevant content such as interviews, GPS and navigation, and publications to assure a continued knowledge sharing. Zuhaila concluded her presentation by confirming the crucial role that SMEs play in Melaka job creation and financial well-being and the commitment of the Melaka City Council to continue working closely with the community to lead initiatives that benefit the city as a whole.
Dr. Artiningsih shared the work that Semarang is doing to boost the economy focused on the local Batik sector, a traditional cloth dyeing industry composed of around 300 SMEs congregated in clusters and run mostly by middle aged housewives who took on these jobs as their children got older. To illustrate the current situation in Semarang, Dr. Artiningsih shared the findings of risk and vulnerability evaluation which revealed that 34.5% of Batik production was discontinued and 63% of production decreased due to an estimated 70% loss of market demand during the pandemic. Based on a comprehensive assessment of the situation, Dr. Artiningsih shared that Semarang has created a guide for future sustainable business development that promotes taking advantage of strategic locations, development of brand stories and production uniqueness, and improved financial management by creating cooperatives and microfinance lending opportunities.
Managing Director, Asia Head Emerging Corporates, Citi Commercial Bank
“While SMEs are being supported by relief programs & banks, Citi & Citi Foundation understand a more sustainable & long-term solution is needed as cities navigate the economic impact of COVID-19 & pivot towards recovery.”
Zuhaila Ahmad Zubel
Director of Town Planning Department, Melaka Historic City Council (Malaysia)
“The pandemic severely affected the SMEs sector & economy in Melaka. To navigate through, we worked with the sector to co-create several initiatives. By working together with SMEs & the community we will build a stronger & more resilient city.”
Dr. Jose Di Bella
Postdoctoral Fellow, Sustainability Policy Research on Urban Transformations (SPROUT) Lab, University of Waterloo
“Sustainability-oriented practices of SMEs can contribute to individual, organizational & community resilience by building social connections through digital spaces, creating rapid business pivots & empowering communities, among others.”
Dr. Artiningsih Msi
Senior Lecturer, Universitas Diponegoro in Semarang (Indonesia)
“The future of sustainable business development involves creating digital ecosystems for collaboration and innovation, taking advantage of key locations in the city, innovating in design production, focused & consistent promotion, among others.”