The growing concentration of market power in the hands of big international companies is a worrying trend for small businesses, UNCTAD Deputy Secretary-General Isabelle Durant said in Geneva at the launch of a new report on SME competitiveness around the globe.
Too much market power in the hands of a few big players limits growth prospects for small- and medium-enterprises, commonly referred to as SMEs, which provide 60 to 70 per cent of formal employment in developing countries, with the figure reaching 80 per cent in sub-Saharan Africa.
Simply put, small businesses give millions of people a chance at a better life.
"In our last Trade and Development Report, based on really concrete data we identified many specificities regarding the concentration of transnational companies' market power between 1995 and 2015," she said, referring to UNCTAD's database of consolidated financial statements of listed non-financial companies in more than 50 developed and developing countries.
The data shows that during the twenty-year period the top 100 global firms saw their surplus profits grow to 40 per cent of total profits, compared to the global average of 23 per cent. And by 2015 the market capitalization of the top 100 firms had jumped to 7,000 times that of the bottom 2,000 firms, up from just 31 times the worth twenty years earlier.
Ms. Durant was speaking at the World Trade Organization at the launch of the International Trade Center's SME Competitive Outlook for 2017, which looks at how regional markets can be a gateway to global trade for small businesses. The International Trade Center is a joint agency of UNCTAD and the World Trade Organization.
"I think it's really important today that this report could highlight the importance of the regional value chain," Ms. Durant said.
"It is there that you can start networking with other partners around you. It is what we have discovered with the Empretec Programme, a programme for training and coaching entrepreneurs," she said. "The capacity to network is really the first condition to develop your SMEs on the ground."
Designed using research by Harvard psychology professor David McClelland, UNCTAD's Empretec programme has been active in 40 developing countries since its launch in 1998. To date it has trained over 420,000 budding entrepreneurs.
One graduate in Northern Uganda used what he learned to start a fish farm, creating dozens of jobs for young men and women and providing affordable fish in a region where poverty limits people's access to nutritious food.
