New research from ACCA (the Association of Chartered Certified Accountants) highlights the pressing challenges and strategic innovation opportunities for small and medium-sized enterprises (SMEs). The study, SMEs: Business challenges and strategic innovation opportunities, reveals three main challenges: escalating costs, workforce and talent management, and the evolving ESG (Environmental, Social, and Governance) reporting agenda.
The SME sector serves as the backbone of Pakistan’s economy, with over 5 million SMEs operating across the country in both formal and informal sectors, engaging in diverse activities from manufacturing and trade to services.
Comprising about 90 percent of exclusive private businesses, the sector provides employment to 30 percent of the total workforce, contributing an estimated 40 percent to the annual GDP and 25 percent to the annual exports (with IT & ITES among major exports).
Head of ACCA Pakistan, Assad Hameed Khan, says “Despite playing a vital role in economic growth and poverty reduction, the SME sector faces numerous constraints that impede its optimal potential. “Professional accountants are in a unique position to make real, impactful changes and be at the centre of sustainable development. Accountants rounded, data-informed, ethical approach, along with their breadth of view, means that they have a pivotal role,” he added. The report emphasises the need for tailored strategies that can help SMEs navigate the evolving business landscape successfully, including embracing innovation, optimising resource management, and staying ahead of regulatory changes.
“In these testing times, SMEs must pivot towards innovative strategies to navigate the complexities of cost pressures, talent retention, and sustainable practices. Our research not only identifies the critical hurdles but also offers a roadmap for SMEs to emerge stronger and more agile,” Assad says.
