Backbone of Economic Growth

Dr. Sarath Ranaweera explains the ways in which SMEs could unleash their immense potential to scale up

Around the world, SMEs within food systems play a critical role in shaping the growth and sustainability of the economy. This is particularly true for the food and beverage industry that is dispersed across the country.

It creates job opportunities across geographic areas, employs broad segments of the labour force – including low skilled workers – and provides opportunities for skills development while contributing to the GDP significantly.

A significant portion of SME manufacturers who have the capacity and uphold international standards, provide their goods to both exporters and local consumers. In the Chairman and Founder of Bio Foods Dr. Sarath Ranaweera’s view, this background provides a stepping stone to refine the industry in the context of processing raw food materials, manufacturing, packaging and distributing – as well as exporting to the global food and beverage (F&B) market.

As a prerequisite, SMEs must strive to stay on top of their competitiveness and continually adapt to changing circumstances to survive.

“The export oriented F&B industry in Sri Lanka offers a variety of goods across product categories such as processed fruits and vegetables, ready to serve food, rice and other cereals, concentrates and juices, and so on. These markets have shown a rapid growth potential over the past few decades – especially in the organic, environmentally friendly and sugar free product categories,” he elaborates.

Explaining on how conflict, fragility and weak governance can exacerbate already volatile conditions, Ranaweera explains that SMEs are easily susceptible to many obstacles as starting a business that complies with international regulations such as organic and fair trade standards is difficult and time intensive, and accessing finance can be an even greater challenge.

SMEs have also been greatly affected recently by the economic crisis and associated control measures that followed. “Despite some SMEs adapting admirably, more has to be done to support the majority. Helping SMEs navigate the current crisis, seize emerging opportunities, and strengthen future food system resilience will require both short and long-term initiatives,” he said.

Ranaweera continued: “Looking beyond the immediate challenges posed by the economic crisis, we should implement mechanisms and programmes that will help SMEs better absorb similar shocks in the future, enhancing the resilience of the local economy.”

“A holistic approach to reform national policies that promote SME sector growth, easing regulatory burdens, and financial institutions particularly reimagining their lending processes to SME and entrepreneurs, will undoubtedly create a conducive business environment and improve the viability of small businesses,” Ranaweera observes in conclusion.

“We should implement mechanisms and pro-grammes that will help SMEs better absorb similar shocks in the future, enhancing the resilience of the local economy