Fuqua professor explains how the health of small and medium firms can strengthen communities and benefit the whole economy
Beyond their sheer numbers, small and medium businesses offer significant benefits to their communities, their employees, and the entrepreneurs who lead them–individuals driven by purpose, autonomy and control.
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What strategies should companies pursue that would lead to sustainable and flourishing societies? Small and medium enterprises (SMEs) may offer the most viable answers.
For Christopher Eaglin, an assistant professor of strategy at Duke University’s Fuqua School of Business, many large companies of the dot-com era had promised to address these questions 30 years ago.
“They wouldn't just add good things to the world. There would also spur this huge wealth transfer from firm productivity to employees,” he said in a talk on Fuqua's LinkedIn page.
However, while the world these dominant companies helped shape now grapples with a multitude of problems — including climate change, inequality, polarization, and mental health issues — small and medium firms, sometimes in underdeveloped markets, offer a living example of how to build resilient economies, Eaglin said.
Small and medium sized businesses represent 90-95% of companies around the world, ensuring 70% of employment and 40% of GDP worldwide, he said.
[This article has been reproduced with permission from Duke University's Fuqua School of Business. This piece originally appeared on Duke Fuqua Insights]