MSME Day: How Startups And MSMEs Can Collaborate To Drive Innovation

Last week, we acknowledged world MSME Day. This stands for Micro-, Small and Medium-sized Enterprises Day. This was on 27 June, and was set up by the United Nations General Assembly to recognise how much smaller businesses contribute to the world economy and everyday life.

These businesses make up 90% of all companies globally and are responsible for 60 to 70% of jobs, according to the World Bank. They also contribute half of the world’s GDP. In places with fewer resources, such as low-income countries, smaller companies often create most formal jobs and offer work to women, young people and marginalised communities.

Sabby Gill, CEO of Dext and Chair, Digital Leaders, said, “This MSME Day, the picture for small businesses is bleak. With corporation tax for small businesses now accounting for 40% of the £46.8bn tax gap, it’s clear that cash flow is a serious concern for SMEs.

“What’s even more clear is that this isn’t about deliberate tax evasion; small businesses across the UK are simply struggling to balance their books in a challenging economic environment.

“Amid soaring costs, changing tax policies and uncertainty around global trade, businesses are fighting just to survive. Thriving isn’t even on the agenda for many. With SMBs making up 99.8% of the business population, something needs to change – and fast.

“If we want to support our small businesses, and unlock their potential, we need to empower them to improve their financial planning and support the use of modern tools, ultimately lifting the burden on overstretched leaders.

“By addressing these challenges, MSMEs will be better placed to navigate uncertainty and shifting demand, moving from survival mode to driving economic growth.“

 

 

What Are Experts Saying?

 

We have asked experts how startups and Micro, Small and Medium-sized Enterprises can work together to bring innovation to the UK. Here’s what they said…

 

Our Experts:

 

• Adam Brinn, Regional Head, Growth Lending
• Chris Mears, Regional Head, Growth Lending
• Gary Warner, Marketing Manager, Joloda Hydraroll
• Leury Pichardo, Marketing Director, Digital Ceuticals

 

Adam Brinn, Regional Head, Growth Lending

 

 

“The past three years have been turbulent for business owners with a revolving door of pandemic, global supply chain issues, the war in Ukraine, the cost of living crisis and domestic political instability.

“Yet despite this uncertainty, it is pleasing to note that two thirds of business owners are confident in their growth prospects for 2025. This resilience has become the fuel for many entrepreneurs who are focused on moving forward.

“Our report identifies an increasing understanding from business owners on the part that digital transformation has to play in maintaining competitive advantage, which, combined with investment in innovation, will create sustainable value. But “investment” is the key word.

“Business leaders need to press boldly forward when it comes to fundraising – make preparations early and start conversations with funding partners now – so that competitive edge can be maintained and continued growth becomes a firm reality.”

 

 

Chris Mears, Regional Head, Growth Lending

 

 

“There is no substitute for a well thought-out plan, alongside proactive market engagement when it comes to securing funding for growth.

“While many businesses report that access to funding remains an issue, this is sometimes due to ineffective interactions with a highly fragmented and confusing funding market.

“For example, we often meet businesses that are convinced debt funding does not exist to support their plans and that equity is the only choice. We always enjoy coming up with options that unlock their brilliant plans – so the solution is usually out there, the challenge is just finding it!

“In order to secure the right funding package it is crucial to build a plan that is credible, flexible and detailed. Embrace the risks and make them central to your planning. How will these risks be managed? What will you do if they play out badly? What is your plan B?

“In Mike Tyson’s words – everyone has a plan until they get punched in the face – so then it’s all about how you react. If you can show flexibility in your planning, alongside active market engagement, then you will have a winning formula.”

 

Gary Warner, Marketing Manager, Joloda Hydraroll

 

 

“One of the simplest ways for businesses of all sizes to support each other and drive growth is by leveraging each other’s audiences.

“Every individual company has a customer base that already trusts and supports them, whether it is in the early stages or well-established. That audience can be engaged in various ways, through social media (including LinkedIn), email campaigns, POS, direct mail, blogs, or events.

“Collaborating enables the passing of that trust to the partner, as customers perceive the partner as credible and legitimate for working with their beloved brand.

“Cost savings can be realised by sharing media or content, and ideas can be generated through joint product, sales, or marketing initiatives.

“Larger companies may be admired for helping smaller ones grow and gain exposure, while also benefiting from a fresh perspective on their approach or product.

“Combining products, designs, services, and ideas in a partnership can expand reach, increase awareness, boost sales, and lead to exciting new ventures.”

 

Leury Pichardo, Marketing Director, Digital Ceuticals

 

 

“From my experience building digital growth systems, the best startup MSME collaborations function like a direct trade of high value assets.

“The most effective model is a “Growth Swap”. The startup offers its specialized, cutting edge system, while the MSME provides its established distribution channels and market credibility. It’s a symbiotic trade of digital innovation for market access.

“At my agency, we act as the startup partner for more established companies. We implemented our systematic digital PR approach for a B2B service firm that had a strong brand but zero search visibility. They gave us industry authority, and we gave them a growth engine that increased their qualified leads.

“This avoids vague partnerships and creates a clear win win where both sides exchange a core strength for a core weakness.”