By Anwar Zibaoui, General Coordinator of ASCAME. Opinion article originally posted in Expansión and translated from Spanish.

SMEs are a fundamental part of the Mediterranean economy. And all countries in the region recognise their importance and their impact on wealth creation. However, this knowledge has not led to effective solutions to the endemic problems suffered by small and medium-sized enterprises, which manifest themselves tragically in every crisis. We need to think about SMEs, because SMEs and informal enterprises account for 90% of the business fabric, 60% of GDP and 70% of employment in the region.

Many factors make it difficult for SMEs to start, grow and prosper. Start-up costs are high, paperwork is cumbersome, financing is hard to come by, exit options for investors are limited and the cost of failure is high. SMEs receive only 8% of total bank loans. Government measures or funding programmes are not sufficient.

As the region seeks a more diversified and sustainable economy, SMEs must take centre stage as the main driver of innovation for a sustainable and prosperous future. It is time to think SME-friendly.

Despite calls for leadership to drive growth, diversification and innovation, and decades of calls for entrepreneurship, the current ecosystem is still geared towards large companies. Government structures and mindsets are designed to “think big”, to cater to big business, build big office space, rent big warehouses and attract big investors. But the world has changed and the definition and perception of small has to adapt.

Governments need to provide a platform that welcomes entrepreneurship and provides a transparent and effective business environment if they are to emerge from the crisis and in view of the material and human potential at their disposal. They need a very low-cost base, a quick licence to operate, an enabling financial system and an ecosystem where they can not only raise funds but also enable clear and professional exit options.

Policies to support SMEs require coordination between many actors: governments, municipalities and private sector organisations. It is a complex system that needs to be carefully driven. SMEs need to be helped to orient them towards a digital future and prepare them for the challenge of climate change …

The future of Mediterranean economies will be underpinned by entrepreneurship, which is the cornerstone of any economy that aims to increase the private sector participation of a young workforce. More than 60% of the region’s population is under 25, a real dividend that must be harnessed. Now is the time to think about SMEs.