Abstract
The purpose of this paper is to shed light on the potential contribution of small- and medium-sized enterprises (SMEs) to the Sustainable Development Goals (SDGs) and derive implications for policymakers based on the insights. Our findings indicate that despite their comparatively smaller size, SMEs can contribute significantly to the achievement of the SDGs. We conclude that both lead firms and policymakers need to take a more differentiated approach in their interactions with SMEs. Instead of universally regarding smaller firms as standard takers, lead firms and policymakers need to acknowledge that they can make a significant contribution to standard-setting and standard-adapting efforts. Consequently, SMEs need to be regarded as an important resource in multi-stakeholder initiatives regarding the SDGs.
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ACKNOWLEDGEMENTS
We gratefully acknowledge comments received from Rob van Tulder (Rotterdam School of Management, Erasmus University, NL), Suzana Braga Rodrigues (Universidade FUMEC, BR), Heinz Tüselmann (Manchester Metropolitan University, UK and UNCTAD, CH) and participants at the AIB 2019 Annual Conference in Copenhagen. Financial support was received from the Economic and Social Research Council (ESRC, ES/J013234/1), and the Alliance Manchester Business School (AMBS) Lord Alliance Strategic Research Investment Fund (LA-SRIF AA14179).
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Appendices
Appendix
Appendix 1: Interview Guidelines
(1) Background. Nature and history of your business. Founding member(s), Origin of idea for business. |
|---|
(2) Position in the GVC and relationship with buyers and suppliers. Position in the value chain (from raw materials to the final product). Assessment of freedom to conduct business as management intends to. Main influencers on the way business is conducted. Relationship with buyers/clients. Main requirements that buyers/clients ask for. Characteristics of buyers. Relationship with suppliers. Main requirements of suppliers. |
(3) Firm responsibility and community impact. Description of organization’s impact on environment/society/local communities/workers/employees. Procedures/processes to determine social, labor, and environmental impact. Description of design and implementation of social responsibility initiatives. |
(4) Addressing Sustainable Development Goals (SDGs). Familiarity with the SDGs. Active contribution to particular SDGs. Motivation for adopting particular SDGs and addressing them. |
(5) Impact of buyers upon firm and its responsibility. Position of buyers regarding social, labor, or environmental impact. Values of buyers regarding impacts. Communication with buyers about SDG-related topics. Standards and their adoption. Reasons for (non)adoption and extent of implementation. Overall impact of standards on firms. |
Appendix 2: Observed Patterns
SME Case ID | Governance type | Responsible action enablers | Responsible action | Action’s centrality to business model | Depth of action | Outcome | Connection to SDG |
|---|---|---|---|---|---|---|---|
SH | Independent | Geographical distance between SME and producer (low) | Coop management | Business model | Root cause | Improve supplier capacity | 8.2, 2.4, 2.3 |
Charity foundation | Individual action | Root cause | Access to education | 4.1 | |||
Recyclable packaging | Business model | Symptom | Reduce plastic waste | 12.5 | |||
Ethically disposed leadership (high) | Sell product with health benefits | Business model | Symptom | Relieve eczema discomfort | 3 | ||
Resource constraints (high) | Informal, irregular supplier site visits | Business model | Superficial | Reduce labor violations | 8.8 | ||
AN | Independent | Geographical distance between an SME and its producers (high) | Pay above premium or market rate | Business model | Root cause | Farmers paid more | 1.1, 8.5 |
Resource constraints (high) | Irregular supplier site visits | Business model | Superficial | Reduce labor violations | 8.8 | ||
NB | Independent | Geographical distance between an SME and its producers (low) | Recyclable packaging | Business model | Symptom | Reduce plastic waste | 12.5 |
Ethically disposed leadership (high) | Pay above premium or market rate | Business model | Root cause | Farmers paid more | 1.1, 8.5 | ||
Resource constraints (high) | |||||||
NA | Independent | Geographical distance between an SME and its producers (low) | Support sustainable farming | Business model | Symptom | Pesticide-free production | 12.4, 2.4 |
Cash loans to growers | Business model | Symptom | Minimize farmer risks | 1.4 | |||
Recyclable packaging | Business model | Symptom | Reduce plastic waste | 12.5 | |||
Turn waste into renewable energy | Business model | Symptom | Reduce food waste | 12.3, 12.5 | |||
Donate excess food | Individual action | Symptom | Reduce societal hunger | 12.5 | |||
AK | Loose | Geographical distance between an SME and its producer (low) | Coop management | Business model | Root cause | Improve farmer capacity | 2.3, 2.4 |
Health check-ups for workers | Individual action | Symptom | Minimize health risks | 3.8.1 | |||
Fairtrade certification | Business model | Symptom | Farmers paid more | 1.1, 8.5 | |||
Income diversification | Business model | Symptom | Minimize farmer risks | 2.3 | |||
Long-term commitment with supplier (high) | Cash loans to growers | Business model | Symptom | Minimize farmer risks | 1.4, 9.3.1 | ||
Ethically disposed leadership (high) | Support sustainable farming | Business model | Symptom | Reduction in deforestation | 15.2 | ||
CV | Loose | Geographical distance between an SME and its producers (low) | Pay above certification premium | Business model | Root cause | Farmers paid more | 1.1,8.5 |
Support sustainable farming | Business model | Root cause | Farmer capacity-building | 2.3, 8.2 | |||
Recyclable packaging | Business model | Symptom | Minimize crop failure | 2.4 | |||
Long-term commitment with supplier (high) | Pension and healthcare insurance for rural farmers | Business model | Symptom | Reduce plastic waste | 12.5 | ||
Ethically disposed leadership (high) | Farmer social security, | 3.8.2 | |||||
DR | Loose | Ethical disposed leadership (high) | Fairtrade certification | Business model | Symptom | Farmers paid more | 2.3 |
Long-term commitment with supplier (high) | Top up payments | Business Model | Symptom | Minimize farmer risks | 1.5 | ||
Geographical distance between an SME and its producer (high) | Farmer training program | Business model | Symptom | Farmer capacity-building | 2.3 | ||
UR | Loose | Geographical distance between an SME and its producers (low) | Pay above certification premium | Business model | Root cause | Farmers paid more | 1.1, 8.5 |
Farmer training program | Business model | Symptom | Farmer capacity-building | 2.3, 8.2 | |||
Long-term commitment with supplier (low) | Income diversification | Business model | Symptom | Minimize farmer risks | 2.4 | ||
Support sustainable farming | Business model | Symptom | Reduce harmful pesticides washed into rivers | 6.3 | |||
Ethically disposed leadership (high) | Recyclable packaging | Business model | Symptom | Reduction in deforestation | 15.2 | ||
Reduce plastic waste | 12.5 | ||||||
Fund school engagement projects | Individual action | Symptom | Promote biodiversity projects | 15.5 | |||
JF | Loose | Geographical distance between an SME and its producers (high) | Source from Global Gap certified supplier | Business model | Superficial | Reduce food safety risks | 12 |
JC | Loose | Ethically disposed leadership (low) | Source from Global Gap certified supplier | Business model | Superficial | Reduce food safety risks | 12 |
GG | Moderate | Lead-firm pressure to comply with formal standards (high) | Third-party audits | Business model | Superficial | Reduce labor violations | 8.8 |
Geographical distance between an SME and its producer (high) | Presentations and supply-chain evaluations | Business model | Superficial | Reduce labor violations | 8.8 | ||
SP | Moderate | Lead-firm pressure to comply with formal standards (high) | Pay certification premium | Business model | Symptom | Farmers paid more | 2.3 |
Geographical distance between an SME and its producers (high) | Electric vehicles | Business model | Root cause | Remove carbon emitting sources | 7 | ||
JG | Moderate | Ethical disposed leadership (high) | Charity for promoting sport | Individual action | Root cause | Sport participation for disadvantage groups | 3 |
One-off fresh produce donations | Individual action | Superficial | Reduce hunger | 2.1 | |||
Geographical distance between an SME and its producers (high) | One-off donation to sponsor fruit conference | Individual action | Superficial | Enhance reputation | |||
BW | Moderate | Lead-firm pressure to comply with formal standards (high) | Electric vehicles | Business model | Root cause | Remove carbon emissions | 7 |
Fund water project | Individual action | Symptom | Provide access to water | 6.1 | |||
Pay Fairtrade premium | Business model | Symptom | Farmers paid more | 1, 8, 2.3 | |||
Carbon offsetting | Business model | Symptom | Minimize carbon emissions | 7 | |||
Recycle waste packaging | Business model | Symptom | Reduce plastic waste | 12.5 | |||
Training young people into farming | Business model | Symptom | Upskilling young people | 4.4, 8.6, 9.3 | |||
Geographical distance between an SME and its producers (high) | Supplier audits | Business model | Symptom | Avoid labor violations | 8.8 | ||
Long-term commitment to supplier (high) | Research on consumer plastic consumption | Business model | Superficial | Provide data for government research | 17 | ||
MA | Moderate | Lead-firm pressure to comply with formal standards (high) | Charity foundation to alleviate poverty | Individual action | Root cause | Provision for poor families | 1, 8.5 |
Advocacy by promoting best practice | Collective action | Root cause | Lead industry sustainability | 17.9 | |||
Occasional charitable giving | Individual action | Symptom | Fund health center | 3 | |||
Training young people into farming | Business model | Symptom | Upskilling young people | 4.4, 8.6, 9.3 | |||
Reusable cups | Business model | Symptom | Reduce plastic waste | 12.5 | |||
Ethical disposed leadership (high) | Pay Fairtrade premium | Business model | Symptom | Farmers paid more | 1.1 | ||
Lead-firm pressure to comply with formal standards (high) | Supplier audits | Business model | Superficial | Avoid labor violations | 8.8 | ||
LM | Tight | Lead-firm pressure to comply with formal standards (high) | Provide safety equipment and safety training | Business model | Symptom | Minimizing risk of injury | 8.8 |
Supplier audits | Business model | Superficial | Reduce labor violations | 8.8 | |||
Geographical distance between an SME and its producers (high) | |||||||
GF | Tight | Lead-firm pressure to comply with formal standards (high) | Build water canal for community | Individual action | Symptom | Provide access to clean water | 6.1 |
Supplier audits | Business model | Superficial | Reduce labor violations | 8.8 | |||
Geographical distance between an SME and its producers (high) | Creates financial burden for supplier | ||||||
Ethical disposed leadership (high) | Support suppliers with access to export markets | Individual action | Root cause | Increases supplier business resilience and economic growth | 8.3, 2.3 | ||
MK | Tight | Lead-firm pressure to comply with formal standards (high) | Supplier audits | Business model | Superficial | Reduce labor violations | 8.8 |
Provide safety equipment and training | Business model | Superficial | Minimizing risk of injury | 8.8 | |||
Geographical distance between an SME and its producers (high) | Climate spatial data research | Business model | Superficial | Data on future climate risks | 13.2 | ||
Risk adversity (high) | Sustainability initiative member | Collective action | Superficial | Sharing best practices | 17 | ||
AG | Tight | Lead-firm pressure to comply with formal standards (high) | Supplier contract termination if non-compliant | Business model | Superficial | Reduce labor violations | 8.8 |
Geographical distance between an SME and its producers (high) | Supplier audits | Business model | Superficial | Reduce labor violations | 8.8 | ||
RH | Tight | Lead-firm pressure to comply with formal standards (high) | Renewable energy sources | Business model | Root cause | Remove carbon emitting sources | 7 |
Geographical distance between an SME and its producers (high) | Supplier self-assessment audit | Business model | Superficial | Reduce labor violations | 8.8 | ||
Risk management (high) | |||||||
JM | Tight | Lead-firm pressure to comply with formal standards (high) | Supplier contract termination if non-compliant | Business model | Superficial | Reduce labor violations | 8.8 |
Occasional charitable giving | Individual action | Symptom | Fund cancer research | 3.4 | |||
RG | Tight | Lead-firm pressure to comply with formal standards (high) | Supplier self-assessment audit | Business model | Superficial | Reduce labor violations | 8.8 |
Waste avoidance | Business model | Root cause | Prevent food waste | 12.5 | |||
Risk management (high) | Donate food waste | Individual action | Symptom | Reduce hunger | 2.1 |
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Sinkovics, N., Sinkovics, R.R. & Archie-Acheampong, J. Small- and medium-sized enterprises and sustainable development: In the shadows of large lead firms in global value chains. J Int Bus Policy 4, 80–101 (2021). https://doi.org/10.1057/s42214-020-00089-z
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DOI: https://doi.org/10.1057/s42214-020-00089-z
Keywords
- Sustainable Development Goals (SDGs)
- global value chains
- small- and medium-sized enterprises (SMEs)
- multinational enterprises (MNEs)
- responsible business
- flexible pattern matching