Why small businesses make a big difference

Interview with Soumitra Dutta, Dean of Saïd Business School, University of Oxford

Big companies make the headlines. From Apple and Amazon to Reliance and Tata, the world’s corporate conglomerates and heavyweights generate billions of dollars every year, with a huge workforce behind them.

So when we think of businesses, we rarely think of small and medium-sized enterprises, or SMEs. And that’s understandable. After all, it’s organizations like Microsoft, Bharti Airtel and Unilever that make the world go round, right?

Fake.

“SMEs represent a huge part of the businesses that exist in the world, as well as that of the global workforce,” says Soumitra Dutta, dean of the Saïd Business School at the University of Oxford. “They are the ones who make things happen.”

He is right. According to the World Bank, SMEs represent approximately 90% of all businesses and are responsible for 50% of employment worldwide, as well as up to 40% of GDP in emerging markets. A McKinsey report released in 2022 found that in Malaysia, while medium-sized businesses make up just 2% of all operating businesses, they account for 40% of the country’s GDP.

“Although small in size, SMEs are a powerful and dispersed group. It is their impact that we need to focus on,” says Dutta. “Their potential for economic and social impact should not be underestimated or underestimated.”

So why are SMEs so often overlooked? “It all depends on the metrics we’re using,” says Oxford Dean Saïd, an engineering graduate from IIT Delhi, then a master’s and a doctorate in computer science from Berkeley.

For Dutta, SMEs are not the only victims of outdated measures of value – organizations spanning countless sectors, despite their immense potential for impact, have too often been relegated to the minor leagues thanks to their sheer weight relative to a set restricted to barometers. And that, he notes, impacts how we view leadership within these organizations.

“Take a business school, for example, and, in turn, the role of a dean,” he clarifies. “If we were to use just a few metrics – the number of employees or students, which in the case of Saïd Business School, is just over a few thousand each year, or annual revenue, then the role of a dean might seem modest. But, when you think about the impact a business school can have through each of its stakeholders, the responsibility of leading each of these potential agents of change carries real weight.

But with such potential comes great pressure. “As the leader of an organization charged with educating current and future business communities, you have to ask yourself the tough questions: ‘Are we doing enough?’ And, more importantly, “Are we ensuring that we, as a business school, reflect the need the world has of us? says Dutta.

In our interview together for Forbes, Soumitra Dutta discusses the role of MBA graduates in making a difference in the world and being aware that their education at Oxford comes with responsibility and mindfulness of others.

“You have to believe in your product, believe in your service,” he adds. “But you also have to be brutally honest with yourself. Still.”

Although SMEs account for around 99% of businesses and 70% of all jobs in OECD countries, between February 2020 and April 2021, nearly 80% of these businesses in 32 countries lost between 30% and 50% of their income. Many have called for more support to be offered to small businesses following the growing pressure posed by the Covid pandemic, as well as other contemporary challenges including rising costs, economic uncertainty and an energy crisis. But challenges remain in providing adequate aid.

“Although their value is fairly well documented, it has always been difficult to serve these types of companies. Many have struggled to offer support to SMEs – including business schools,” says Dutta.

“Every SME deserves a world-class education that helps them grow efficiently. They are the entrepreneurial heart of the business community, not just in the UK, but all over the world. But the dean of Oxford Said insists that the challenge many of them face is not to start a business but to grow it.

“They don’t fit easily into the global business school formula, and I don’t think business schools have focused enough on them. Now more than ever, I would like us and other business schools to focus more on this area. Our work with the Goldman Sachs Foundation is impactful and we are grateful for their collaboration. With the right support at the right time, SMEs are a powerful force for job creation and improved productivity.

Delivered in partnership with Goldman Sachs, Said Business School currently offers a fully funded executive program for small business leaders across the UK. Since its launch in 2010, the Goldman Sachs 10,000 Small Businesses UK program has supported more than 2,000 SME leaders, offering participants a range of educational opportunities, from access to world-class academics to peer-to-peer mentorship .

“Its objective is clear: to create jobs and economic opportunities,” says Soumitra Dutta. “Oxford Said is not alone in supporting SMEs and should not be. Schools must do more.

For Dutta, it all comes down to impact: “SMEs have the potential to make a significant impact within their communities, and business schools have both the resources and the know-how to support these businesses.”

“At Oxford Said, we have made this a priority area because it is clear, both personally and institutionally, that we have a responsibility to do what we can to make the world a better place. SMEs have demonstrated their potential for impact, so we need to support these businesses. By doing so, we can maximize the good we do.

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