Platform-Enabled Small Businesses and Inclusive Economic Opportunities

This paper looks at the ability of small online commercial enterprises to adapt to macroeconomic changes. The analysis is based on the European Commission’s study of how companies of different sizes attempted to rebalance their export destinations in response to significant relative decrease in export opportunities within Europe due to the recent economic and financial crisis. All size classes of European exporters attempted to expand their extra-EU exporting relative to intra-EU exports as demand from outside of Europe grew more rapidly relative to demand from within Europe.  All size classes of business achieved a rebalancing in favor of more pronounced extra-EU exports. However, the largest businesses were more adaptable and flexible. We have replicated this analysis for EU eBay-enabled firms and found that they showed the strongest rebalancing of export destinations: they exceeded even the rate of rebalancing toward extra-EU exports of the largest European businesses, and they were considerably more adaptable than the general classes of small business exporters. Government export support programs should take this learning into account. We recommend partnerships between towns or regions, the local businesses and online commerce platform providers to bring platform-based exporting to local MSMEs. 

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