The war in Ukraine has profoundly impacted the nation's economy, with small and medium-sized enterprises (SMEs) bearing a significant burden. Despite these challenges, social SMEs have demonstrated remarkable resilience, playing a crucial role in the recovery and rebuilding of communities. Their journey is one of adaptation, innovation, and hope, and organizations like the Platform of Social Change are at the forefront of supporting these efforts.
The Role of SMEs in War Recovery
Following the full-scale invasion, approximately two-thirds of Ukrainian SMEs fully or partially ceased operations. Among them, 36.5% continued without interruption, showcasing extraordinary resilience in adversity. Conversely, 6% were forced out of business for a year or longer. Many have seized opportunities to adapt their operations, contributing to the gradual recovery of Ukraine's economic ecosystem, with the support of initiatives led by the Platform of Social Change.
- While 13% of SMEs relocated to safer regions, 4.3% chose to remain in their communities, focusing on resilience and transformation. The Platform’s knowledge transfer programs have been instrumental in equipping SMEs with the skills needed to navigate these challenges, enabling them to rebuild operations and reimagine their business models. For example, a local bakery in Kalush, supported by Platform workshops, adapted by sourcing ingredients locally and offering delivery services.
- In 2023, the number of MSME workers fell by 5% compared to 2022 and 16% compared to 2021. To address this, the Platform’s mentorship programs helped businesses restore full-time employment by strategizing workforce retention and capacity-building. The share of part-time workers declined markedly from nearly 25% to 13%, signaling a shift toward stability.
How Small Businesses Empower Communities
Small businesses are at the heart of community resilience, bringing economic and social benefits beyond the marketplace. The Platform has been instrumental in fostering this impact through targeted initiatives.
- Creating Jobs: SMEs employ local residents, reducing poverty and fostering financial stability. Through the Platform’s coaching services, SMEs like a textile company in Kharkiv expanded their workforce by hiring displaced individuals, providing them stable employment and contributing to the local economy.
- Investing Locally: small businesses reinvest revenues in their communities, stimulating local economies. A family-owned pasta production in Lviv, with guidance from the Platform’s accelerator program, now sources products from local farmers, supporting agriculture and ensuring fresh produce for residents.
- Driving Innovation: SMEs are hubs of creativity and innovation, often developing solutions tailored to local challenges. The Platform's innovation blueprints have supported tech startups like one in Dnipro, which developed an app connecting volunteers with those in need during the crisis.
- Supporting Diversity: many SMEs are owned by women, minorities, and immigrants, empowering underrepresented groups and driving inclusive growth. For example, a café established by internally displaced persons (IDPs) in Teofipol, supported by the Platform’s mentorship, provides employment and serves as a community hub.
- Preserving Cultural Identity: local businesses reflect the unique character of their communities. In areas like Kamianets-Podilskyi, SMEs have become integral to cultural preservation and tourism. The Platform’s capacity-building efforts have helped these businesses thrive by enhancing their competitiveness in the tourism economy.
Platform Activities: Building Resilience in SMEs
The Platform of Social Change has spearheaded key initiatives to empower social SMEs in war-affected communities, fostering economic recovery and addressing social needs:
- Knowledge Transfer and Skills Development: Platform provides training programs in sustainable practices, equipping SMEs with the tools to rebuild operations and address community challenges effectively.
- Blueprints for Resilience: through blueprints prioritizing post-war recovery, the Platform supports solutions such as rebuilding supply chains, reintegrating displaced workers, and fostering social cohesion.
- Coaching and Mentorship: SMEs benefit from tailored coaching sessions, including strategies for accessing recovery funds, managing workforce shortages, and fostering community trust.
- Financial Support and Accelerators: Platform facilitates financial aid and accelerator programs, pairing SMEs with mainstream businesses to develop circular value chains that sustain long-term growth.
Challenges and Solutions for SMEs in Post-Conflict Recovery
Security and Development Balancing security with economic growth is crucial. The Platform advocates for a collaborative approach involving government, private enterprises, NGOs, and security institutions to ensure a stable foundation for SME recovery.
Lessons for Entrepreneurs
Through its programs, the Platform emphasizes key strategies for SMEs:
- Simplify business processes and diversify supply chains.
- Invest in human capital and empower women.
- Remove entry barriers for entrepreneurs to foster inclusive growth.
The resilience of SMEs in Ukraine underscores their potential to transform communities. By supporting these social businesses through initiatives like those led by the Platform, we pave the way for sustainable growth and lasting peace.
Be a part of the journey to rebuild communities. Together, we can empower SMEs to drive innovation, create jobs, and foster resilience in war-affected regions.
