3 lessons from China on how to create strong and sustainable SMEs and mid-sized businesses

Small- and medium-sized enterprises (SMEs) and mid-sized companies are considered the 'backbone' of the global economy, creating close to 70% of jobs and GDP worldwide.

Their mission-driven leadership propels them forward and holds the potential for greater collective impact.

SMEs, which have fewer than 250 employees, and less than €50 million in annual revenues, alongside mid-sized companies, with less than 5,000 employees and revenue of $50 million-$1.75 billion, possess the potential to foster extensive growth, drive innovation, and promote sustainability across global, regional and local economies.

But they are often the most affected by economic shocks and turbulence, perhaps more than any other companies. It is, therefore, crucial to examine how SMEs’ ecosystems and growth capabilities can be improved to achieve success. Governments and international organizations are developing various programmes to support their growth and help them become more significant drivers of social and environmental progress.

The World Economic Forum offers a range of opportunities designed to support the growth of both SMEs as well as mid-sized companies. Within the mid-sized business community, known as the New Champions, leaders from purpose-driven organizations across various industries are brought together to foster inclusive, trusted and sustainable transformations in both business and society through the facilitation of new connections, sharing of insights, exchange of knowledge and promotion of collaboration.

What truly defines the value of the community is when regional stories take global stage, insights inspire action and their resilience and passion inspire a new generation of change-makers.

“In order to achieve a meaningful global societal and environmental impact, it is imperative that we actively engage with these companies. Their collective contributions play a significant role in driving societal change. We understand their importance and are on a mission to provide them all with the resources needed to thrive and become the sustainable champions of tomorrow,” says Julia Devos, head of the New Champions’ community.

As part of the Annual Meeting of the New Champions being held in Tianjin, China, from June 27–29, here are three stories from the New Champions community in China on how leadership can help create long-lasting change.

Zhang Xiangdong, Founder and CEO, Organic & Beyond Corporation, Beijing

At Organic and Beyond Corp. (OABC), we have and will always align our vision with the shared future for all life on Earth. The value of food is embodied in various aspects: social, cultural, environmental and so forth. We strive to make SDGs an inseparable part of people’s daily life, social interaction and economic development through practices such as but not limited to: 1) focusing on sustainability, building a production system that benefits the soil, ecosystem and mankind and reduces pressure on the environment; 2) sharing delicacies that are high-quality, carbon-neutral and eco-friendly to help our clients take part in climate action, contributing especially to the protection and restoration of biodiversity; and 3) improving efficiency in communication and collaboration across the board from production to consumption.

Key to building strategic resilience and sustaining growth in a mid-sized organization is maintaining your strategic focus: adhere to the business principle of bringing value and innovation to your clients. For improving products and services, focus on providing eco-friendly products and services. We upgraded our OABC Taste Gift Box in 2023 to increase its value in embodying carbon neutrality and protecting biodiversity.

We also recommend building a comprehensive evaluation system for the ecological value of products. Take Cavell Geisha Coffee from the OABC Taste Gift Box as an example, where we evaluated methods of sustainable production, monitoring several species, population density and positive impacts on birds and other endemic species to carry out protection.

Xu Wei, CBO, Dalian Bingshan Group Co Ltd

Reviewing the course of social and economic development over the years, it can be found that the path of a well-developed enterprise at each stage will highly overlap with the development trajectory of each era; that is to say, only by conforming to the development trend of the era can we achieve better development. At the same time, we can only achieve better development than other enterprises by leading the trend of the era.

In the current complex environment, as a manufacturing enterprise, ensuring the bottom line of safe production and environmental protection, ensuring profit with cash flow and profitable income, maintaining and increasing the value of assets, having the ability to prevent risks, and winning the trust of investors are the basis for sustainable growth and the premise of shaping a resilient strategy.

How to promote these changes: first, we adhere to the blueprint to the end, adhere to the right direction of development, and do a good job in the business we are good at, which is to focus on the refrigeration and heating business, broaden the career field but do not change the career field, and champion some specific market segment; second is to try our best to build a leading brand in the traditional business and new business segments, and win customers and the future by constantly improving quality and innovative services.

Jiang Xipei, Founder and Chairman of the Board, Far East Holding Group

Regional development is inseparable from industrial support, and it is also inseparable from high-quality enterprises. Enterprise development will drive regional progress, and regional development will bring more resources to enterprises. Give full play to the demonstration and driving role of leading enterprises, carry out industrial cluster development, and achieve regional development through the upstream and downstream synergy of the wire and cable industry. By expanding the wire and cable industry and integrating the upstream and downstream industries, Yixing has become the centre of China’s wire and cable industry.

The critical parameters for shaping a resilient strategy for sustained growth is fostering talent mechanisms, system norms, management systems and cultural guidance. Leaders must have an entrepreneurial spirit, while controlling the overall business strategy, attract business-oriented partners to join, and give full play to the advantages of all talents to drive the long-term development of the enterprise.