B20: businesses and the winding road to sustainabilityBY GIUSEPPE ARLEO
- 8 November 2022
- Posted by: Competere
- Category: Senza categoria
Taken from the blog “Econopoly,” from Sole 24 Ore, to which Giuseppe Arleo is a contributor.
The B20 is the business forum of the G20, underway this year in Indonesia. Established in 2010 and reserved for companies and business organizations, it aims to make concrete and actionable policy recommendations to stimulate economic and development growth.
“Making substantial resources available is ineffective and therefore futile if businesses face difficulties accessing these funds due to high regulatory and transactional costs, inherent risks, and fragmented ecosystems. Such difficulties are most tangible for SMEs, which seem to have been left behind in the 2030 Agenda, despite being the world’s largest employer.”
I echo the words of Rick Johnston, President of Business at OECD, on the occasion of the presentation of the paper: “To achieve the sustainability agenda, liquidity and productivity obstacles must be overcome” jointly written by the B20, BIAC, the Business Forum of the OECD, and the International Organization of Employers (IOE), the global organization representing employer and business associations.
A MODEL FOR SUSTAINABLE ECONOMIC GROWTH
A document was released a few days ago that continues the work of the Italian B20, led by Confindustria and chaired by Emma Marcegaglia, proposing an innovative and inclusive model of development, a “driver for sustainable economic growth,” that would enable the achievement of ambitious environmental goals while maximizing social sustainability.
The paper was edited by Gianluca Riccio and featured the collaboration of experts such as Salvatore Zecchini, Fabio Pompei, Raffaele Jerusalmi, and Matthew Gamser.
An effective regulatory environment is critical to ensuring a significant growth opportunity for firms. At the macro level, regulatory inconsistency is often overlooked: it creates additional and unnecessary costs for the public administration and businesses and hinders good practices on public financing. Therefore, in this regard, one of the first challenges to be addressed is that related to bureaucracy, avoiding duplication of administrative steps that are an obstacle to the free flow of people, capital, goods and services, and the global economy. It is crucial to look at investment management comprehensively, that is, reconciling aspects of the regulatory, productivity and growth phases. Only through integrated solutions of the three phases, and not through a single analysis of them, can we have a good outcome in economic and financial policies and concretely help potential beneficiaries.
Therefore, an aspect that should not be underestimated is laying the groundwork for enterprises to have sufficient and convenient access to funds. Otherwise even the potential incentive opportunities available would not have the desired growth effects.
ECONOMIC GROWTH, FINANCIAL STABILITY AND PRODUCTIVITY
The publication focuses on the necessary balance between economic growth, financial stability and business productivity from a global and social perspective. The paper calls on governments to support firms’ working capital by removing obstacles and cumulative burdens that prevent them from accessing funds, which would otherwise hinder their desired growth prospects.
As Gianluca Riccio explains “in order to help businesses, an important first step is to have a more streamlined financial regulation that finally overcomes the major hurdle of bureaucracy and is effectively supportive of business growth. It is essential to have: a stable and consistent regulatory environment in order to concretely support an overall growth in business productivity; greater investment in electronic data verification and the digitization of documents in order to facilitate, (both in terms of timing and cost) business growth including through the use of financing; strong investment in the use of digital platforms; and support for productivity by tapping into capital locked up by bureaucratic regulations.”
LOOKING AT INVESTMENTS ACROSS THE BOARD
It is clear, then, that it is pointless for governments to commit or promise so much funding if companies (particularly SMEs) find it difficult to access or otherwise be part of using it. The risk is to create only “flash fires,” whereas what is desired from sustainability is a lasting and inclusive development that also has an effect on sustainable growth over time.
The great merit of the paper is to propose a “framework,” which has as its fundamental concept the need to look at investments across the board, i.e., regulatory, productivity, and growth. The solutions that bring results are those that look at the set of factors in an integrated way, not those that look at each factor independently of the others (as in practice is the case today) because then eventually companies will have to deal with them in an integrated form.
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