Luciana Mancini: "Micro and small enterprises are the backbone of the BRICS economy"

In an exclusive interview with BRICS Brasil, the coordinator of the Working Group on Micro, Small and Medium Enterprises discusses the challenges faced by the Brazilian presidency as it leads the bloc’s first initiative on the topic.

In an exclusive interview with BRICS Brasil, Working Group (WG) Coordinator Luciana Mancini — who also serves as an international adviser at the Brazilian Ministry of Entrepreneurship, Microenterprise and Small Business (Ministério do Empreendedorismo, da Microempresa e da Empresa de Pequeno Porte/MEMP) — discussed the challenges of organizing the group’s first edition this year. She emphasized the significant role this segment plays in the economies of the bloc.

Considering the Gross Domestic Product (GDP) and employment figures across BRICS countries, micro, small, and medium enterprises (MSMEs) play a significant role in the bloc’s economies. In Egypt, for instance, MSMEs account for 80% of the GDP. In China, the figure is similarly high, with small businesses contributing 60% of GDP. In India, 95% of jobs are generated by this sector, a trend echoed in China (80%), Russia (72.5%), and Egypt (72%). These figures are part of a study conducted by MEMP to support the structuring of the Working Group.

“Micro and small enterprises are the backbone of the BRICS economy,” stressed Mancini.

Recognizing this potential, the Working Group aims to compile successful experiences already implemented across BRICS countries and identify strategies to further strengthen them through the use of technology. “E-commerce platforms now play a critical role in enabling small businesses to expand their reach both domestically and internationally,” noted the coordinator of the BRICS Working Group. The use of Artificial Intelligence (AI) is also part of this discussion.

Read the full interview with the BRICS Working Group on Micro, Small and Medium Enterprises, Luciana Mancini.

What does the Working Group on Micro, Small, and Medium Enterprises do?

Luciana Mancini: The MSME Working Group was created last year, during Russia’s presidency of the bloc. So now, with Brasil holding the presidency, we are the first to actually coordinate and structure this new group.

MSMEs have come up in BRICS discussions before, under previous presidencies, but not in a very organized way. Setting up a dedicated working group is something new, and it is giving us the chance to take the conversation to a deeper, more consistent level.

How is the WG, which is meeting for the first time this year, being structured?

Luciana Mancini: Basically, what we are doing under our presidency is putting together a strategy, an action plan, and a solid mechanism for it all to work. We are identifying the key priorities to include in the plan and figuring out how to implement them through concrete actions that will bring real benefits to small and medium-sized enterprises within the bloc. It is also about strengthening these businesses among both the original five members and the six new additions, which bring with them significant asymmetries.

The big challenge is figuring out how to structure a work plan, strategies, proposals, activities, and initiatives that can truly support these small businesses. It is not just about public policy, since governments are leading the conversation. We are also bringing together various governmental levels from the BRICS countries, along with the agencies responsible for actually implementing these programs and projects.

You mentioned the asymmetries among the BRICS countries. What do they look like in the context of MSMEs?

Luciana Mancini: Within BRICS, each country has a different approach for MSMEs. From a governmental standpoint, each BRICS country has a different structure and addresses the issue in a different way at different levels of each government.

To give you a concrete example, in the cases of Brasil, South Africa, India, and Indonesia, which are countries that have specific thematic MSME ministries at the national and federal levels, for example. This is different from other countries that address MSMEs in the context of ministries of trade, ministries of finance, ministries of industry, and other arrangements.

And what are the similarities among the BRICS MSMEs?

Luciana Mancini: Small, micro, and medium enterprises are the backbone of literally every one of the BRICS countries. For instance, from the standpoint of participation in the BRICS countries’ Gross Domestic Product, it is remarkably high. From the standpoint of job creation, it is remarkably high.

In fact, these businesses represent a dominant presence in the social and entrepreneurial fabric of all BRICS countries. We are focusing on this characteristic and using it as a foundation to establish our new priorities for action, which are very much based on this reality.

And what are the priorities of the MSMEs WG?

Luciana Mancini: Our focus was on trying to structure the working group. So we started by mapping out who is who, learning which governmental levels within the structure of the BRICS countries work in this area. Then, we worked on structuring the working group itself, establishing terms of reference to describe how we will work from now on, under all presidencies, to ensure a sense of continuity under future presidencies.

The third and most central issue in this structuring strategy, since we are the first country and the first presidency that has assumed the role of structuring the working group, was precisely to propose an action plan to our partners. This action plan is structured around three large pillars.

What are the pillars of the action plan?

Luciana Mancini: The first pillar is information and best practices exchange. We want to know what the BRICS countries and our partners do, what their policies are, what their strategies are, what their initiatives are, and how, in practice, they implement public policies addressed to MSMEs.

The second pillar of this action plan is fostering interaction and synergy among the countries. We are proposing the creation of an MSME forum, with frequent meetings and the participation, for example, of Brazilian MSMEs at events, initiatives, and congresses that are happening in other BRICS countries. There is a big focus on the need to work on training, on business-to-business cooperation, promoting research, joint studies, and support to sustainable business initiatives.

A third area of focus is trade. When you look at the reality of small, micro, and medium enterprises in the BRICS countries, there is a clear imbalance—a significant asymmetry—in their participation in international business and trade volumes.

Which countries can exemplify these international trade issues?

Luciana Mancini: If you take cases like China, for instance: 60% of China’s export volume comes from MSMEs, which is surprising, isn’t it? I mean, the way China can engage the participation of these businesses.

There is a full set of policies to internally bolster and build capacity in these businesses to export. And nonetheless, we have the case of Brazil, in which our volume, or the participation of Brazilian MSMEs in the total volume of exports, is very small, below 1%.

I believe this is a priority for our government—to support, train, and prepare these companies, and to create an environment where Brazilian small enterprises can take a more active role in international trade. This is particularly important as we work toward building truly expanded trade among BRICS countries.

And for this integration of small and medium enterprises into trade, the digital world plays a crucial role.

Luciana Mancini: Especially today, when we are fully immersed in the digital economy. Digital platforms, particularly e-commerce platforms, are central to this process. We know that e-commerce platforms today have an absolutely essential role in driving small businesses forward, both nationally and internationally.

We are also placing strong emphasis on the importance of identifying key sectors that are either ready, nearly ready, or in the process of preparing to engage in this type of trade through e-commerce platforms. This is a crucial concern—pinpointing the sectors and businesses that are equipped to take part in these initiatives and to use digital platforms to sell and export. That includes selling within their own countries, of course, but also expanding their participation in global value chains more proactively.

And, in this sense, artificial intelligence was one of the issues proposed by the Brazilian BRICS presidency. How is this issue being discussed?

Luciana Mancini: We brought to the MSMEs Working Group a deeper discussion on how the digital transformation and the use of artificial intelligence technologies can boost productivity and innovation, actually serving as an advantageous tool for small businesses.

How can artificial intelligence be more effectively adopted by small businesses? How are the BRICS countries working to enable small businesses to take ownership of this technology? How can we better promote digital competencies so that these businesses can really participate in these platforms and boost their sales? And our main concern was to try and discuss the challenges faced by small businesses in the context of the digital transformation, particularly in the aspect of training the workforce to adopt artificial intelligence.

One of the key initiatives of the MSME Working Group was the organization of two webinars titled “Digital Transformation in the Age of Artificial Intelligence: How to Empower BRICS MSMEs for a Competitive Future.” We invited representatives and experts from all BRICS countries, including officials from the ministries responsible for small enterprises, as well as international organizations—particularly from the United Nations system—to discuss the impact of artificial intelligence on BRICS MSMEs and how small businesses can benefit from and better adopt this technology to improve productivity and competitiveness.

We are looking into the possibility of creating programs and projects, and joint initiatives to bolster this agenda within BRICS. Several countries have had very successful experiences in training, technology adoption, and boosting the productivity of small, micro, and medium enterprises through the use of these technologies.

When we talk about BRICS, we are talking about developing countries where inequality remains a major challenge. How do you view the issue of access to artificial intelligence in member countries such as Brazil, Indonesia, and Ethiopia, for example?

Luciana Mancini: That is true. What we have seen in the discussions held within BRICS and in the context of the Working Group on Artificial Intelligence is that none of the countries are disconnected from this conversation. All of them are working internally to develop national strategies and policies—even those with a relatively lower level of development, like the countries you mentioned. They are actively seeking development and forming partnerships because they have already recognized some key issues at stake.

Artificial intelligence technology, every study shows, is an instrument without which it is absolutely impossible to reach the productivity leap and the development leap that these businesses are looking for.

There is also the fact that a large share of these countries have already reached a certain digital maturity. Despite the differences in the levels of advancement and access to digital technologies in each of the BRICS countries, we can observe one common element. Every country today is concerned with and has national digitalization policies and policies to promote access, develop digital competencies and digital talents, and foster the use of technology.

Are there examples of the use of these technologies in BRICS countries?

Luciana Mancini: Indonesia, for instance, is a country where digital technologies are widely spread, and with a very large population. China, too, without a doubt, uses digital payment. These technologies are widely spread throughout all BRICS countries. This in itself ensures a very strong and important foundation. Moreover, we can also see that there are several platforms, especially for e-commerce, in all these countries. Some are more regionalized, others less. These platforms are greatly associated with government action, providing more and more access for small enterprises.

So this is a characteristic that is widely disseminated across various BRICS countries, some of which have gigantic projects. We are talking about India, with millions and millions of small businesses, 170 million small businesses already acting on digital platforms, and with access to artificial intelligence technologies. I believe this is a reality that is also growing more and more in Brasil. It is a reality that is also present in virtually every BRICS country.

It is an investment in the future of these countries.

Luciana Mancini: The fact that artificial intelligence will have a great contribution is very clear, with the injection of trillions of dollars in the global economy by 2030, contributing to the increase of the GDP of every country, and necessarily generating an increase in productivity. This is what the studies we are based on have been showing, and every country is following this direction, moving towards this.

And how can MSMEs, through the use of technology, help reduce inequalities in BRICS countries??

Luciana Mancini: Without a doubt, the discussion around small and medium enterprises is closely linked to the inclusion agenda. It is a fundamental part of any effort to build capacity, promote participation, and include more people in the economy and the marketplace. In that sense, it is a very positive and constructive agenda across all countries.

All BRICS members recognize and approach policies for small enterprises as instruments of inclusion. This is a shared concern among us. What we are aiming for now is to give more structure and direction to this agenda moving forward.

What are the expectations for the next discussions of the WG?

Luciana Mancini: The challenges are immense, but we see them as a great potential and will seek to advance with concrete actions. More than anything, we want to ensure sustainability so that this theme can continue to be discussed under the rotating presidencies to come. BRICS has a mechanism that foresees a succession of presidencies, and our goal is to ensure that the next presidencies can build upon the foundational structure that our Brazilian presidency is building this year.