Micro, Small and Medium enterprises have a huge potential to create long lasting social value especially because their business models, products and proximity caters for the everyday needs of the larger part of our population.
Creating social value means executing initiatives that are geared towards addressing social problems and sustaining progressive change to improve the overall quality of life for all citizens. Simply put, SMEs are well positioned to intervene in the developmental challenges that we face in our country, and we need to develop policies that increase their capacity to do so.
One major developmental challenge our country faces is that of waste pollution. This problem has increasingly become worse as cities become even more congested and the resources to manage population growth, continue to dwindle. In Nairobi, for instance, the most populous parts of the city are also the most affected by waste pollution, and this is where you will find a lot of the SMEs, both informal and formal, thriving. Given their critical position, it is pertinent that we find ways to center them in our policy development towards environmental conservation.
A conspicuous example of such a policy is the plastic bag ban issued by the Government this year. No doubt that this is a positively significant step that our country is taking towards environmental conservation and sustainability. However, the execution of the ban will favour big industrial businesses and supermarkets, and greatly disadvantage small businesses. As opposed to bringing SMEs on board to ensure its effectiveness, it unfortunately locks them out. By negatively impacting their businesses, the ban takes away their very critical agency in bringing positive change to the society, and cripples their ability to catalyze behavioural shift in consumer culture towards an environmental transformation.
Being the constant touch points with a very wide demographic, their operations intertwine with consumers’ daily routines, making it easy for them to inculcate cultural shifts and normalize them. A food vendor, for example, will be best placed to drive a campaign against littering by ensuring that their shop or kibanda provides bins for their customers, teaching them how to use them. Therefore, if for instance we are to implement a waste management initiative such as waste segregation, the Kibanda will have different bins for organic waste, plastic waste and bottles. For the consumers, seeing this being practiced on a daily basis, in a place that they frequent and are familiar with, the idea of waste segregation ceases to be alien and a new consciousness is instilled. Ultimately, social value is created towards the end goal of environmental conservation.
This demonstrates how stakeholder participation in policy development goes a long way in ensuring successful execution. If SMEs are involved in the formulation of policies that will affect their businesses, they will champion the effective implementation of the same. In contrast, if there is no consultation to build a shared understanding on the intent of a policy, then not only do small businesses suffer the cost and operational burdens of adjustments, forcing them to shut down, they also are unable to progress their role of social value creation. If anything the resulting loopholes in policy execution magnify existing social challenges such as youth disenfranchisement, poor health and sanitation especially in rural and underprivileged areas and waste pollution among others.
In the case of the plastic bag ban, the owners of vibandas will resort to using newspapers or brown bags to pack their chapatis, mandazis, and eggs, which do not guarantee safety and hygiene for food as plastic bags currently do. Food handling has become a sensitive issue in our country given the past cholera outbreak and if a food vendor cannot guarantee food safety, then people will shy away from consuming their products and the vendors will eventually shut down. Alternatively, they might opt to find illegal ways to keep packing their food in plastic bags so as to protect their source of livelihood inadvertently spurring a rampant black market for these bags. So the end goal of the policy, which is to have a clean environment will not manifest because the problem will still persist. In the meanwhile, this disruption will result in unemployment; meaning that day-to-day survival will eclipse the larger goals of environmental conservation, which will start to seem secondary in the face of daily hardships such as being able to afford clean water for sanitation purposes.
A CNBC news report puts SMEs contribution to Kenya’s GDP at about 45% and studies have estimated that the informal sector constitutes about 98% of the businesses in this country. We need to leverage these numbers to actualize our vision towards a clean environment and a sustainable green economy. Their role and contribution to the growth and sustainability of our country cannot be understated. It is therefore crucial they are central to policy development and execution, in order for them to effectively enact their transformative role through social value creation.
The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Network Representative for Kenya. She can be reached at email@example.com