Editor’s Notes.
Welcome to the latest edition of Business Circle for 2025,a year that continues to challenge conventions and redefine growth for entrepreneurs and SMEs across the globe. This quarter, we bring you a thoughtful curation of insights, expert analysis, and real-world strategies aimed at empowering business leaders through an increasingly complex economic environment.
We open with a feature on the democratisation of AI, which is no longer reserved for tech giants. With the right knowledge and support, small businesses can now tap into AI’s potential to streamline operations and stay competitive. We also examine the mounting pressure SMEs face from shifting global trade dynamics, particularly in the U.S., where tariffs are straining small supply chains and decision-making at scale.
This issue also explores the growing force of inclusive entrepreneurship, highlighting how women-led and minority-owned businesses are reshaping economies while pushing for equitable access to capital and opportunity. Sustainability remains front and centre, as SMEs strive to meet green mandates amidst practical challenges, calling for more adaptive and inclusive regulatory frameworks.
Further along, we trace India’s evolving startup journey, unpack the global credit gap suffocating small enterprise growth, and examine how regulation still disproportionately burdens SMEs. From upskilling initiatives that miss the mark to a worrying drought in early-stage innovation funding, this edition reflects the realities many entrepreneurs are facing, and the inventive ways they are responding.
At Business Circle, we remain committed to delivering insight that is timely, practical, and inspiring.
Thank you for reading, and here’s to a resilient and forward-thinking quarter ahead.
Sincerely,
Editor – Business Circle Magazine
AI Isn’t Just for Big Tech Anymore but are Small Businesses Ready?.
A decade ago, artificial intelligence lived in the realm of science fiction and Silicon Valley. It powered billion-dollar ad algorithms and quietly crunched data in back-end systems. For the average small business owner, it was fascinating, but distant. A tool for “them,” not for “us.” Fast forward to 2025, and the rules have changed. AI is no longer locked away in enterprise labs. It’s writing emails, forecasting sales, and answering customers in real time - sometimes better and faster than humans. It’s embedded in everyday software. It’s cheap. It’s accessible. And it’s here.
But accessibility isn’t the same as adoption. While AI is knocking on Main Street’s door, many small businesses are peeking through the blinds, unsure whether to invite it in. The tools are ready. The question is: are we?
AI Has Come to Main Street
Once the exclusive domain of tech giants, AI now sits quietly inside tools most small business owners already use. If you’ve typed into a search bar, scheduled a meeting via your inbox, or clicked on a product recommendation, you’ve already interacted with it.
Tools like ChatGPT, Shopify Magic, Microsoft Copilot, and Zoho’s Zia offer affordable, plug-and-play features that don’t require a tech degree. Small teams can generate blog posts in seconds, automate customer responses, and analyse months of data with a few clicks.
And small businesses are noticing. According to McKinsey, over 60% of SMBs have dabbled in AI in some form. That’s a seismic shift. But dabbling isn’t the same as integrating, and that’s where things get complicated.
The promise is clear: save time, reduce overhead, unlock new ways to reach customers. But for many business owners already maxed out on time and trust, AI still feels more like a gamble than a gift.
It’s Not Just Tech - It’s a Leap of Faith
Despite the buzz, a large number of entrepreneurs are still watching from the sidelines. And it’s not for lack of curiosity, it’s fear.
Fear of wasting money. Fear of “breaking” something. Fear of trusting a machine with something as personal as a customer interaction. Many small business owners didn’t grow up in the digital age. Their skills were forged in cash flow battles and late-night inventory checks, not in code. For them, AI feels like a black box, powerful, but mysterious. They ask: Will this replace my team? Will it talk to my customers like I do? What if it gets something wrong?
These questions aren’t trivial. They speak to something deeper than tech literacy, they speak to identity, control, and survival. And the stakes are rising. As larger competitors automate faster and customers begin to expect 24/7 service, the pressure on smaller businesses grows. Falling behind isn’t just a missed opportunity, it’s a threat to long-term viability.
What’s Working and What Still Feels Risky
There are glimmers of transformation. Lisa, who runs a small marketing agency in Atlanta, uses AI to draft campaign copy. “It cuts my time in half,” she says. “But I still
touch everything. I don’t let it go out the door without my voice in it.”
Rafael, who manages a family-owned restaurant in Austin, uses predictive ordering to reduce waste. “It’s not glamorous,” he says. “But we save hundreds a month just by knowing what we actually need to prep. That’s real money for us.”
Still, these success stories come with caveats. Business owners report frustrations: vague onboarding, glitchy chatbots, and tools that overpromise but require hours of tweaking. There’s excitement, but there’s also burnout.
AI, it turns out, doesn’t magically fix everything. It requires setup. It needs oversight. And it demands a certain amount of trust, not just in the tool, but in yourself to wield it wisely.
What’s Working and What Still Feels Risky
So what does readiness actually look like? It doesn’t mean hiring a data scientist. It means starting small. Automate a repetitive task, like appointment reminders. Let AI summarise your emails. Try a chatbot that answers FAQs. These aren’t experiments. They’re steps.
Second, invest in education. Not courses on how AI works, but how to work with AI. Many software providers now offer SMB-focused tutorials, demo videos, and live workshops. There are also local chambers, libraries, and accelerators that are rolling out AI upskilling programmes.
And then there’s partnership. Consultants, vendors, even fellow business owners are part of this learning curve. Don’t go it alone. The tools may be digital, but the journey doesn’t have to be.
Because here’s the tension: businesses that embrace AI today aren’t just streamlining, they’re buying time. Time to innovate, to strategise, to breathe. Those that delay may find themselves outpaced not just by competitors, but by customer expectations. Worse still, they risk being left behind in a marketplace where “smart tools” quickly become standard. The decision to wait could quietly become the decision to fall behind.
AI is no longer a luxury. It’s becoming table stakes. And while small businesses don’t need to become tech companies overnight, they do need to make a choice. Either let the AI wave pass by, or wade in, one tool at a time, with a plan and a purpose. The future won’t wait for perfect readiness. But it will reward boldness, curiosity, and a willingness to learn on the move. For small businesses, that’s nothing new. It’s how they’ve survived everything so far.
AI won’t replace the human touch, but it might just give you a chance to amplify it. And in a world that’s moving this fast, that might be your most competitive advantage yet.
Caught in the Crossfire: U.S. Small Businesses, and the Trump Tariff Landscape
Tariffs may sound like a geopolitical chess move, but for small businesses across the United States, they land much closer to home, right at the cash register, the warehouse, and the supplier invoice. Each time a new trade restriction is imposed or a longstanding agreement is rewritten, it’s not just diplomatic strategy being reshaped, it’s someone’s supply chain, someone’s margin, someone’s storefront being thrown into chaos.
While tariffs are often framed as necessary shields for national interests or leverage in global negotiations, their effects cascade unevenly. Large corporations can pivot, adjusting pricing, leaning on alternate suppliers, or passing costs down the line. But small businesses don’t have that kind of cushion. They operate with fewer options, thinner buffers, and tighter margins. And in today’s ever-shifting trade environment, they’re increasingly caught in the crossfire.
This article explores how U.S. small businesses are navigating the latest wave of tariffs, what it’s costing them, why they’re often left out of the policy equation, and how resilience is being forged amid trade turbulence.
Tariffs by the Numbers: A Shifting Terrain
The current tariff environment has been anything but static. In 2024, the U.S. reimposed and expanded tariffs on key sectors tied to China, particularly around technology components,
semiconductors, and clean energy equipment. Duties on steel and aluminum imports remain in place, and tensions with the European Union continue to simmer over digital services taxes and trade imbalances, sparking threats of retaliatory measures.
For large firms, this is an exercise in risk management. For small businesses, it can be existential. Take the case of a New Jersey-based tool distributor that sources precision components from Asia. After a new round of import duties came into effect in early 2024, their landed costs surged by 30% overnight. With no long-term contracts to buffer pricing and no domestic alternative in sight, the business was forced to cut planned hiring and delay its next inventory cycle just to stay liquid.
Sectors like manufacturing, automotive repair, consumer electronics, and textiles are especially vulnerable, many rely on imported materials or wholesale goods that are suddenly more expen-
sive or delayed. Unlike multinationals, SMEs can’t warehouse years of stock in anticipation. When tariffs hit, they hit hard, and immediately.
The Hidden Cost to Small Business Operations
The real burden of tariffs is rarely just about price, it’s about unpredictability. Most small businesses don’t have dedicated procurement analysts or legal advisors to interpret shifting trade codes. Instead, they face a rolling fog of uncertainty: Should they bulk order now? Should they switch suppliers? Should they eat the cost or raise prices?
This uncertainty often ripples outward. Owners hold off on hiring. Marketing plans get paused. Equipment upgrades are shelved.
One retailer in Colorado, which specialises in imported kitchenware, described the situation as “death by a thousand fees.” Over the course of 18 months, tariffs were imposed, then adjusted, then extended, each requiring recalculations, repricing, and difficult conversations with long-time customers. “There’s no time to plan, only react,” the owner said. “And it’s exhausting.”
Some SMEs try to “tariff hop”, shifting supply chains from China to Vietnam, from Europe to South America. But these maneuvers come with costs of their own: longer lead times, new compliance risks, and potential ethical trade-offs. What may look like adaptation on paper often feels like constant scrambling in practice.
Policy vs. Practicality: Are SMEs Being Considered?
Most trade policies are designed with national security, strategic sectors, or global leverage in mind. They’re crafted in the context of GDP, defence, and diplomacy, not with the rhythms of small business operations in focus. As a result, SMEs often feel invisible in the tariff conversation, not because their concerns aren’t real, but because they’re rarely at the table when decisions are made.
Even when relief mechanisms exist, like tariff exclusion request programmes, they’re often designed for firms with legal support and policy fluency. For many small business owners, navigating these systems is a bureaucratic puzzle that eats time and offers no guarantees.
This lack of inclusion has consequences. Tariffs can unintentionally undercut the very sectors
policymakers aim to support. A hardware startup may manufacture its final product in the U.S. but rely on imported subcomponents now taxed at a premium. A Midwest furniture maker may be boxed out of bidding on federal contracts because rising material costs made their pricing non-competitive overnight.
When policymakers treat tariffs as levers without accounting for ripple effects, the smallest players in the system absorb the biggest shocks.
Policy vs. Practicality: Are SMEs Being Considered?
Still, not all the news is bleak. Across the country, small business owners are quietly rewriting their playbooks. Some are banding together in cooperatives to pool import orders and reduce per-unit cost exposure. Others are investing in domestic supply chains, not just out of patriotism, but pragmatism.
One light manufacturing firm in Ohio shifted part of its component sourcing to a local supplier network. It was more expensive in the short term, but less vulnerable to global disruption. “We’re trading margin for predictability,” the CEO said. “And in this climate, predictability is worth gold.”
There’s also room for smarter policy. Governments can streamline exemption processes for small businesses, support industry-specific advisory hubs, and develop public-private partnerships to offset tariff transition costs. Trade diplomacy doesn’t have to exclude SMEs, it can actively include them by mapping their needs into broader strategic thinking.
Ultimately, the flexibility, ingenuity, and job creation that small businesses bring to the economy is too valuable to jeopardise through blunt policy tools.
Small businesses aren’t lobbying for special treatment, they’re asking not to be collateral damage. In a global economy shaped by shifting alliances and strategic tariffs, the resilience of U.S. small businesses depends on a trade policy that sees them not as footnotes, but as stakeholders.
Tariffs may be tools of leverage at the negotiating table, but on Main Street, they land like blunt instruments. The future of American competitiveness will be defined not only by what’s taxed, but by who’s left standing afterward.
From the Margins to the Map: The Rise Of Women-Led and Minority-Owned Businesses.
For decades, women-led and minority-owned businesses occupied the edges of the economy - vibrant, vital, but often overlooked. They built communities, created jobs, and fuelled innovation without the recognition, or resources, that larger, more traditional businesses received.
Today, that map is shifting. Driven by changing demographics, consumer expectations, and targeted investment, women entrepreneurs and minority founders are stepping into greater visibility, and shaping the future of business itself. But the journey from margin to mainstream isn’t a straight line. It’s a story of resilience, systemic barriers, new opportunities, and the unfinished work still ahead.
This article explores how women-led and minority-owned businesses are rising, what challenges they continue to face, and why their success redefines what growth looks like for the modern economy.
Momentum Building: Growth in Numbers and Influence
Across industries and continents, the surge of women-led and minority-owned businesses is not just a moment, it’s a movement. In the U.S., women-owned businesses have grown by 114% over the past two decades, according to the Women’s Business Enterprise National Council. Minority-owned firms now account for nearly one in five U.S. businesses, a number steadily climbing as entrepreneurship becomes an increasingly important vehicle for equity and agency.
These are not just businesses; they are acts of self-determination. From healthcare startups in Lagos to eco-design studios in Bogotá and tech platforms in Detroit, founders from historically excluded backgrounds are stepping forward to claim economic ground. The post-pandemic era in particular saw a spike in business formation among Black, Latina, and immigrant women, not only out of necessity but also out of vision, a drive to create models of work and ownership that reflect their realities and values.
And while this momentum is real, so is the need to sustain it. Growth is only the beginning; visibility must be met with investment, mentorship, and a structural rethinking of how we define success.
Barriers That Haven’t Disappeared
For all the progress made, the path remains uneven. Access to capital is still a stubborn ceiling, less than 2% of global venture capital goes to women-founded companies, and even less to Black, Latinx, and Indigenous founders. These statistics aren’t just numbers, they’re constraints on dreams, limitations on scale, and friction in what could otherwise be exponential trajectories.
Beyond funding, procurement bias continues to narrow opportunity. Supplier networks often operate through old relationships and opaque standards, sidelining qualified founders who lack access to elite business networks. Even when programmes for diverse suppliers exist, navigating them can feel like a maze designed without end-users in mind.
And then there’s the emotional tax. Many founders face the weight of representation, being the “first” or the “only” in rooms that weren’t built with them in mind. The pressure to outperform just to be perceived as equal can stifle energy and innovation. True support means not only removing technical barriers but also creating cultural and institutional spaces where inclusion is embedded, not exceptional.
Catalysts for Change: Funding, Policy, and Collective Power
Despite these barriers, a new economic terrain is being shaped, by policy, capital, and community. Venture funds like Fearless Fund, Arlan Hamilton’s Backstage Capital,
and Goldman Sachs’ One Million Black Women initiative are not just writing checks; they’re rewriting narratives. Public procurement policies are evolving too, pushing both governments and corporations to open their supply chains to underrepresented founders. But systemic change isn’t coming from the top down alone.
At the grassroots level, women and minority entrepreneurs are building their own tables: launching founder collectives, leveraging community crowdfunding platforms, and creating micro-funds powered by peer support. These models reject the myth of scarcity and instead build ecosystems rooted in mutual elevation.
Consumers are playing their part as well. Today’s buyer is more informed and more intentional, choosing to support businesses that reflect their identities, ethics, and communities. What was once an optional value proposition is now a competitive edge: authenticity, representation, and impact.
Mapping the Future: Inclusive Growth as a Strategic Imperative
Inclusive entrepreneurship isn’t just a social imperative, it’s an economic one. Studies continue to show that diverse leadership drives stronger financial performance, greater innovation, and broader market reach. Supporting women-led and minority-owned businesses is no
longer about optics, it’s about opportunity.
As we look ahead, several shifts are defining the future. One is intersectionality, moving beyond one-dimensional categories to support entrepreneurs at the intersection of race, gender, geography, and identity. Another is decentralisation. Innovation is no longer tethered to Silicon Valley or urban financial hubs. It’s happening in small towns, border regions, and diasporic communities.
Technology, too, is playing a critical role in flattening access. E-commerce platforms, digital banking, and remote-first business models are enabling more founders to launch and scale without proximity to power. But tech alone isn’t enough. Intentional design, through accelerators, education, and long-term ecosystem building, is essential to ensure that opportunity flows through all levels of the economy. Inclusive growth isn’t about doing better for some, it’s about doing smarter for all.
The rise of women-led and minority-owned businesses isn’t a footnote to the economic story, it’s becoming the headline. But true progress won’t be measured by headlines alone. It will be measured by the strength of ecosystems that nurture these businesses from launch to scale, from survival to leadership. From the margins to the map, the path is clearer, but it’s still being paved. And in the steps of every founder daring to redraw that map, the next economy is already taking shape.
Green Mandates, Grey Realities: How SMEs are Navigating the Sustainability Push.
Sustainability has become more than a buzzword - it’s the new anthem of progress, echoing from boardrooms to farm fields. Policies stack higher each year, promising greener futures. Certifications bloom like wildflowers across supply chains. Governments pledge net-zero targets with sweeping declarations. And yet, for many small and medium-sized enterprises (SMEs), the path to sustainability feels less like a sunrise and more like a storm cloud gathering.
They are not resisting change; they are standing in the downpour, trying to keep the lights on. Large enterprises have ESG teams and consultants to navigate the tides. Small businesses? They improvise - googling carbon calculators late at night, patching together solutions between customer calls, choosing between an energy audit and a payroll run.
The world’s green ambition weighs heavily, but the hands carrying it are often the smallest. They are the shopkeepers, the farmers, the café owners, and the local manufacturers. In the tension between mandates and means, the story of SME sustainability is being written, not in sweeping legislation, but in grey realities stitched together day by day.
The Expanding Scope of Green Compliance
The new rules of business are painted in shades of green, and no company, no matter how small, is left untouched. What once lived in glossy corporate reports now trickles down into invoices, packaging labels, and local contracts. In Europe, the Corporate Sustainability Reporting Directive (CSRD) calls large firms to account for their environmental impact, but it drags their suppliers, often SMEs, into the spotlight. A furniture-maker in Portugal may now need to track timber sourcing two tiers back. A software developer in Estonia might find new pressure to disclose server energy usage.
Across Canada and India, Extended Producer Responsibility (EPR) laws weave sustainability into every box, bot-
tle, and bag. In the United States, looming SEC climate disclosures send quiet shockwaves down supply chains. Even SMEs not legally bound by the rules find themselves under the expectations of larger clients and procurement partners.
For small businesses, the message arrives less as an announcement and more as a tap on the shoulder: comply, adjust, or risk being left behind.
The Strain of Implementation
Inside corner bakeries and small machine shops, sustainability is not debated, it is wrestled with. The challenge is not belief; it is bandwidth. There are no spare hands to draft ESG policies. There are no spare hours to decode emissions metrics.
Certifications glitter on government websites - ISO standards, green labels, energy benchmarks, but each one demands money, time, translation. In a fragile market, investing in sustainability can feel like trying to plant a forest during a drought.
Some SMEs try anyway, swapping materials, retrofitting equipment, attending webinars between deliveries. A tailor in Nairobi might source organic cotton but struggle to prove its certification to new buyers. A small logistics operator in Detroit might optimise routes but still be asked for emissions audits written in corporate language.
Without practical tools and local support, good intentions erode into quiet exhaustion. SMEs carry the green man-
dates on their shoulders, but often stumble through the grey in-between.
When Green Works: Bottom-Up Success Stories
Yet even in rough soil, green shoots emerge. Some SMEs are not just adapting, they are blooming.
A family-run coffee roastery in Wales found that switching to compostable packaging didn’t just meet new requirements, it opened doors to eco-conscious retailers they once thought out of reach. A regional courier service in Manila optimised their delivery routes with simple software tweaks, slashing emissions and saving fuel money in one stroke. In rural Ohio, a local grocer turned rooftop solar panels into marketing gold, drawing loyal customers who valued resilience over convenience.
In South Africa, a collective of small-scale farmers embraced regenerative practices not only to improve soil health, but to tap into premium markets hungry for verified eco-products. In Vietnam, a homegrown textile brand shifted to natural dyes, telling stories that turned sustainability into a marketing advantage, not just a compliance checkbox.
These successes were not born from pressure. They grew from possibility, where green made business sense, not just compliance sense. Where the grey realities were acknowledged, but not surrendered to.
Enabling a Green Transition That Works for SMEs
If policymakers want SMEs to thrive in a green economy,
they must start by speaking SME language: simplicity, proximity, practicality.
Tiered requirements that ease smaller businesses into compliance. Local grants that remove upfront costs. Templates that turn emissions reporting from a labyrinth into a checklist. Advisors who know the shape of a small business’s week, the constant shuffle between survival and ambition.
And larger corporations, too, must stretch a hand downward, not just demanding sustainability from suppliers, but building pathways alongside them: shared resources, bundled certifications, group trainings.
Because real change doesn’t happen in capital cities alone. It happens quietly, in backrooms, in delivery trucks, in community meetings, where small businesses stitch sustainability into their already crowded days.
The green economy cannot stand on headlines alone. It needs hands, millions of them, steady and resilient.
SMEs are not resisting sustainability. They are navigating it, often blindfolded, often barefoot, yet still moving forward. If we want a world built on greener foundations, we cannot simply scale ambition. We must scale access. We must offer not just roadmaps, but bridges.
The future of sustainability is not written in policy documents. It’s written every day, in the grey spaces where small businesses labour, hope, adapt, and, if given a chance, lead.
Icecream Cones or Chinese Clones: Mapping India’s Entrepreneurial Evolution.
“India needs more tech startups like China, not ice cream startups,” - said a senior Indian government minister earlier this year - a comment that sparked both laughter and backlash across the country’s startup ecosystem. The remark, though brief, exposed a deeper tension: between state expectations of ‘serious’ innovation and the lived realities of founders building across diverse sectors. It implied a hierarchy - where tech startups count, and consumer ventures don’t.
To some, it reflected ambition. To others, a disconnect. Founders pushed back, not on the call for scale, but on the tone. “Support us with infrastructure and capital,” one tweeted, “before dismissing what we build.”
The debate brought to the surface a larger story, one written into the title of this piece. Ice cream cones and Chinese clones aren’t just metaphors, they represent the two poles that have defined India’s startup journey. The former: lightweight, low-tech, instantly gratifying businesses often dismissed as trivial. The latter: a generation of ventures modelled after proven Chinese or Western platforms, efficient, scalable, and investor-friendly, but not always original.
The Clone Era: Pragmatism Over Pride
In the early 2000s, India’s entrepreneurial playbook leaned heavily on proven global models. Flipkart mirrored Amazon. Ola was built in Uber’s image. Zomato, Snapdeal, and Paytm all emerged with clear parallels to Chinese or American counterparts. This was not laziness, it was pragmatism.
India’s digital infrastructure was still developing. Consumers were just beginning to adopt mobile-first behaviours. Venture capital, especially foreign capital, was risk-averse and favoured familiar ideas that had worked elsewhere. Cloning wasn’t a shortcut, it was a strategy for de-risking innovation in an untested landscape.
These startups were never pure copies. They adapted ruthlessly to local conditions, solving for logistics, payments, and languages that their global peers never had to. In many ways, this era was foundational. It gave rise to India’s first unicorns, built a startup culture, and opened the gates for a generation of operators to learn, scale, and eventually dream beyond imitation.
The Turning Point: Identity and Intent Redefined
As India’s consumer base matured and mobile internet became ubiquitous, a shift began to take shape. Startups no longer sought validation through replication. They started solving problems native to India, messy, non-linear, and often invisible to outsiders.
Agri-tech platforms built for smallholder farmers. Vernacular content platforms targeting Tier 2 and Tier 3 users. Logistics firms optimised for unpaved roads and lastmile gaps. The pandemic only accelerated this trend, pushing digital adoption deeper into the population and spotlighting infrastructure gaps that needed real solutions, not borrowed ones.
This period saw the rise of “India-first” innovation. The UPI-led fintech revolution, affordable EV manufacturing, and AI tools for regional languages showed that Indian founders were now building for local conditions, with scale in mind, but not mimicry. The playbook was being rewritten in real time.
Capital, Confidence, and the New Generation
Part of this transformation was powered by money, but a different kind. Domestic venture capital began to grow.
Family offices and Indian fund managers started backing ideas that didn’t always check the Silicon Valley boxes but made sense in Indian markets.
Government initiatives like Startup India, coupled with platforms like Aadhaar, UPI, and ONDC, created a policy and infrastructure foundation tailored to local growth. With this came a new kind of founder, less obsessed with chasing exits and more focused on building enduring, profitable companies. Many were second-time entrepreneurs or operators who had lived through the clone era and knew what it lacked: a sense of ownership.
Confidence, too, became generational. Younger founders didn’t need to justify building “like” someone else. They had peers and predecessors who had proven the market, and now, they wanted to own the narrative.
Capital, Confidence, and the New Generation
Today’s Indian startups defy easy categorisation. They aren’t pure clones, nor are they singular originals. They
blend ambition with realism, drawing lessons from the world but grounded in Indian constraints, and strengths.
Some are now exporting their models outward: affordable SaaS platforms tailored to Southeast Asia and Africa; India Stack-inspired digital ID frameworks being studied by emerging economies; frugal tech that works just as well in Brazil or Nigeria as in Bihar.
This “third way” is subtle. It doesn’t reject global inspiration, but it doesn’t chase it either. It builds with confidence, constraint, and context, and in doing so, reframes what innovation from the Global South can look like.
India’s startup evolution can’t be plotted on a straight line from imitation to originality. It’s layered, looping, and often contradictory, much like India itself. The real story isn’t about choosing between ice cream cones or Chinese clones. It’s about recognising that value can be created at every level of ambition, in every corner of the economy.
The next chapter of India’s entrepreneurial story won’t be written in anyone else’s script. It will be scribbled in multiple languages, on a thousand dashboards, in co-working spaces and family-run shops alike. And that, precisely, is its power.
The $5 Trillion Credit Gap: Why Small Businesses Still Can’t Get Funded.
Ask any small business owner what keeps them up at night, and odds are, “funding” will make the shortlist. Whether it’s a bakery expanding into catering or a tech startup hiring its first sales team, access to capital is often the difference between surviving and scaling.
Yet, despite all the headlines about fintech revolutions and digital banking, a harsh truth remains: small businesses are still being left out. The International Finance Corporation estimates the global credit gap for small and medium-sized enterprises (SMEs) at $5.7 trillion annually. That’s trillions - with a T - in unmet financial need. And if you include informal businesses? That number jumps even higher.
This article isn’t just about big numbers, though. It’s about real people who are bootstrapping their dreams, and running into walls.
The $5 Trillion Problem No One Has Solved
Let’s zoom in. SMEs make up more than 90% of businesses worldwide. They’re the mom-and-pop stores, the corner coffee shops, the family-run factories, and they’re responsible for over half the world’s employment. But here’s the kicker: most of them either can’t get a loan or can only access a fraction of the financing they need.
If you’re a business owner without a polished credit history, property to use as collateral, or a formally audited financial report, the odds are already stacked against you. And if you’re a woman or minority entrepreneur, the barriers can be even higher.
Many businesses operate in the informal economy, selling on Instagram, delivering local services, or growing slowly by word of mouth. These are vibrant, essential parts of the economy, but traditional banks don’t know what to do with them. If you’re not in the system, you’re invisible to it.
Banks Are Still Playing It Safe
Walk into a bank with a solid business plan, and you might
still walk out empty-handed. Not because your idea isn’t sound, but because the math doesn’t work for the lender.
Traditional banks are risk-averse. The cost of reviewing and servicing a small loan is nearly the same as for a big one, but the returns are smaller. Add in regulatory pressures, like capital requirements that encourage lending to larger, established borrowers, and small businesses often don’t even make it past the first screening.
For many entrepreneurs, the process feels discouraging. Paperwork piles up. Credit score thresholds seem arbitrary. And the turnaround time? Weeks, sometimes months. By then, the opportunity that needed funding has passed.
It’s not just about rejection, it’s about feeling like the system was never built for you in the first place.
When “Alternative” Doesn’t Mean Accessible
Enter the rise of fintech and alternative lending. From peer-to-peer platforms to embedded finance through your favourite payment app, new options have changed the funding landscape. And for some, they’ve been game-changers.
But for many small business owners, these platforms can be a mixed bag. The interest rates can be eye-watering, the terms are complex, and the approval criteria, while different, aren’t always more forgiving. Some algorithms flag applicants based on cash flow volatility. Others require digital integration that not all businesses are ready for.
And then there’s the issue of digital visibility. If your business doesn’t leave a strong online footprint, whether through accounting software, e-commerce platforms, or
banking APIs, you’re less likely to qualify. Many small businesses operate offline or in low-tech ways. That doesn’t mean they’re bad bets. But it does mean they can’t access the sleek new world of digital finance.
Where Do We Go From Here?
Fortunately, there are efforts underway to chip away at the problem. Governments in over 100 countries have rolled out public credit guarantee schemes, programmes that back a portion of small business loans to give lenders more confidence. These have helped, but they’re not always easy to navigate.
In the UK, for example, the British Business Bank relaunched its Growth Guarantee Scheme to support loans in underserved regions. India has its own version through the CGTMSE, aimed at micro and small enterprises. These are important moves, but the paperwork can be dense, and awareness remains low.
Technology is helping too. AI-driven credit models now pull data from non-traditional sources, like utility payments or inventory logs, to assess creditworthiness. Open banking initiatives allow real-time access to business accounts, offering a clearer picture of financial health. These tools have the potential to level the playing field, if used wisely.
And here’s where the human part comes in. Access to
finance isn’t just about algorithms and balance sheets. It’s about trust. Many small business owners, especially in underbanked areas, rely on informal networks, family, friends, local lenders, not because they want to, but because they don’t see any other path.
Organisations like chambers of commerce, nonprofit lenders, and local business hubs are stepping up. They offer something fintech can’t automate: education, mentorship, and hands-on support. When combined with smart policy and fair lending practices, they can help bridge the final gap.
The $5.7 trillion credit gap isn’t just a statistic, it’s a barrier standing between millions of entrepreneurs and their next big step. It’s the bakery that can’t afford a new oven. The freelancer who turns down a contract because they can’t cover upfront costs. The startup that shuts down before it really starts.
Fixing this isn’t about giving out free money. It’s about building systems that recognise and nurture small business potential, especially when that potential doesn’t fit into a spreadsheet.
The way forward will require creativity, collaboration, and commitment. If we can redesign lending to meet entrepreneurs where they are, instead of asking them to fit a mold, we can unlock a wave of growth, innovation, and resilience that the global economy desperately needs.
Too Small to Scale? Why Regulation Still Overburdens the World’s SMEs.
For most entrepreneurs, the dream of running a small business isn’t about dodging rules, it’s about building something that lasts. But increasingly, that dream is being buried beneath a mountain of compliance checklists, tax filings, and licensing labyrinths. Across countries and industries, regulation designed for billion-dollar corporations is being applied wholesale to microenterprises and local startups.
From environmental audits to payroll systems, small and medium-sized enterprises (SMEs) are expected to meet the same standards as companies with full legal departments and policy advisors. And while compliance might be manageable for a 5,000-person firm, for a 5-person team, it can feel like a full-time job in itself.
This isn’t just a red tape problem. It’s a survival issue, especially in economies where SMEs power the majority of employment. For a neighborhood grocer, a craft manufacturer, or a solo tech consultant, the weight of compliance can feel like it’s designed to weed them out, not bring them along. And as governments add new layers of regulation to address global challenges, the risk is clear: policy built for scale may be pushing the smallest players out of the game.
A Global Weight on Small Shoulders
Small businesses account for between 90% and 99% of all firms globally. In many regions, they provide over half of total employment. Yet when it comes to regulation, they’re bearing a burden that doesn’t match their size or resources.
In Europe, GDPR compliance has challenged even well-established SMEs. The law, while vital for consumer privacy, assumes access to legal teams, data officers, and documentation infrastructure that many small firms simply don’t have. According to a Eurobarometer survey, less than 40% of EU SMEs feel fully compliant with GDPR,
mainly due to complexity and cost.
In emerging markets, digital tax systems, e-invoicing mandates, or formalised payroll structures are introduced with minimal support, leaving mom-and-pop businesses scrambling to keep up. In Mexico and Brazil, for instance, digital invoicing reform was rolled out nationally, but many small firms lacked both the software and the training to adapt quickly.
For many SMEs, the cost of staying compliant isn’t just financial, it’s existential. The systems are built for companies that scale. But most businesses don’t start that way, and some never intend to.
Time, Cost, and Complexity
Customer experience is fundamentally rooted in comRegulatory compliance doesn’t just cost money, it eats time. Studies show that small businesses often spend two to three times more per employee than large firms on compliance-related activities. That includes hiring consultants, preparing audits, managing licensing renewals, or simply understanding what’s required.
In the U.S., the National Small Business Association found that the average small business spends over 80 hours a year navigating federal regulation. In developing countries, this number can be higher due to lack of digitisation or centralised information.
For a founder running operations, marketing, and customer service, regulatory obligations often become an evening or weekend job. Some abandon plans to grow into new sectors or regions because the rules shift and the paperwork doubles. Others delay hiring just to avoid navigating another round of employment compliance.
As one small business owner in Brazil put it: “I spend more time on forms than forecasting.” That kind of administrative fatigue doesn’t just stunt growth, it saps energy from innovation.
When Intent Collides with Impact
Most regulations are created with good intentions, protecting workers, safeguarding data, or ensuring tax fairness. But when those rules are applied without scaling to firm size, the impact diverges from the original goal.
Take ESG reporting. As environmental and sustainability regulations evolve, more companies are being asked to disclose emissions data or implement sustainable procurement frameworks. But for a small supplier making packaging in Indonesia or a regional bakery chain in Canada, the tools, metrics, and guidance are often missing.
The same goes for data protection laws like India’s DPDPA or California’s CCPA. Without dedicated compliance staff, many SMEs are unsure how to interpret the rules, let alone implement them correctly. In trying to uphold fairness and accountability, we risk creating new inequities through technical overload.
When Intent Collides with Impact
Fortunately, some governments are beginning to recognise the gap. Singapore’s GoBusiness portal, for instance, consolidates licensing, grants, and regulatory filings into one simplified platform, built with small business usability in mind. The EU is also piloting tiered approaches to ESG compliance, easing burdens for firms under a certain revenue or staff size threshold.
More broadly, the future of regulation must be rooted in proportionality. That means tailoring expectations and designing rollout plans that include training, grants, or outsourced compliance support for SMEs. It also means involving small business voices during policy design, before mandates go live.
Better yet, digital tools can do more of the lifting. Auto-filled forms, AI-powered reporting tools, and free legal helplines could all become standard features if policymakers prioritise accessibility alongside accountability. The principle is simple: don’t scale regulation, scale support.
If small businesses are expected to compete in global markets, they can’t keep playing with a different rulebook, and a heavier one. Regulation is essential, but when it isn’t scaled thoughtfully, it stops being protective and starts becoming punitive.
T
he future of economic resilience depends not just on how governments regulate, but on how they empower the smallest players to comply, compete, and continue building. A business shouldn’t have to scale just to survive.
Training The Future: Are Government Upskilling Programmes Reaching SMEs?.
Walk into any government press conference these days and you’ll hear the same rallying cry: skills are the new currency. From AI fluency to cybersecurity basics, national leaders are pouring billions into upskilling initiatives designed to safeguard the future of work. On paper, the programmes sound transformative - an arsenal of free training, grant money, and digital toolkits ready to lift workforces into the next economy.
But look closer and the picture blurs. While multinational corporations snap up grants and partner with universities, small and medium-sized businesses, the ones accounting for two-thirds of private-sector jobs, find themselves lost in the noise. The forms are complicated. The eligibility rules are opaque. The support feels tailored for someone else.
It’s not that SMEs are resistant to learning. Quite the opposite. From family-run workshops to rapidly growing startups, small businesses often understand the need to adapt, but they’re too busy surviving to decode government strategy. And every missed opportunity deepens the gap between the companies shaping the future and the ones struggling to survive it.
The Policy Push: Big Ambitions for a Skilled Workforce
Governments are embedding skills development into national economic strategies with impressive scope. The U.S. CHIPS and Science Act earmarks funding for workforce development in semiconductor manufacturing and advanced technologies, channeling grants through community colleges and research hubs. Across Europe, the Digital Skills and Jobs Coalition mobilises public-private partnerships to boost digital literacy, cybersecurity resilience, and ICT competencies. In Southeast Asia, ASEAN’s SME Academy and the Go Digital ASEAN initiative offer mobile-first toolkits to bring microenterprises into the digital economy.
The ambition is bold: close the skills gap, create future-proof jobs, and ensure economic competitiveness. But ambition doesn’t always mean accessibility. Most national programmes favour scale, designing delivery around universities, sectoral bodies, or corporate giants. SMEs, despite making up over 90% of businesses globally, often remain an afterthought in the execution.
SMEs on the Sidelines: Time, Capacity, and Awareness Gaps
For most SMEs, the issue isn’t unwillingness to train, it’s capacity. A bakery owner juggling suppliers and payroll is not tracking government grants. A 10-person logistics firm cannot spare an employee to decipher eligibility requirements or manage reporting compliance.
In many cases, SMEs don’t even know these programmes exist. Even when they do, applying often demands administrative lift, gath-
ering documentation, demonstrating need, mapping skills frameworks, that smaller teams simply can’t spare the cycles to complete.
Unlike enterprise HR teams, SMEs don’t have built-in learning and development departments. They rely on lean operations, on-thejob training, and immediate returns. If a skills programme is not frictionless, it is functionally invisible.
This disconnect is especially stark in rural areas or underserved urban zones, where broadband access and intermediary support are already thin. In these regions, even digital-first solutions can feel out of touch.
What’s Working: When Upskilling Meets Small Business Reality
Some governments and intermediaries are closing the gap, and the patterns are clear. Simplified processes, direct incentives, and localised support consistently drive SME engagement. Singapore’s SkillsFuture Enterprise Credit (SFEC) offers a case study in successful SME outreach. Rather than blanket grants, SFEC gives SMEs a one-time S$10,000 credit to spend on pre-approved workforce programmes, with minimal paperwork and strong advisor support through EnterpriseSG. Uptake among SMEs has been high, proving that simplicity and trust drive participation.
Similarly, ASEAN’s SME Academy uses a mobile-first platform with self-paced modules in local languages, bypassing bureaucratic hurdles. Programmes that embed themselves in the daily flow of business, not above it, are the ones that stick.
In parts of the U.S., community colleges have piloted business partnerships where skills training is delivered on-site at SME facilities during work hours, dramatically improving participation. These flexible, locally embedded models prove one thing: design matters more than dollars.
Building Upskilling That Fits SMEs
The path forward requires more than bigger budgets, it demands smarter design. Upskilling programmes must meet SMEs where they are, not expect SMEs to navigate labyrinthine systems.
First, funding must be sliced into smaller, accessible tranches with simplified applications. Second, outreach must be community-based:
chambers of commerce, local trade groups, and microfinance institutions are critical bridges. Third, training must align with real business pain points, digital fluency, cybersecurity readiness, customer management, not abstract future skills divorced from operational reality.
Above all, programmes must treat SMEs as co-creators, not passive recipients. The most successful workforce initiatives will not be those that train workers for some distant, idealised economy. They’ll be the ones that equip today’s small businesses to survive, adapt, and grow tomorrow.
Upskilling is no longer a bonus, it is the base-
line for staying alive in an economy moving faster than policy can legislate. Governments are right to invest. But if upskilling programmes continue to be designed for scale instead of relevance, the businesses most at risk of disruption will be the ones least able to adapt.
The solution is not more press conferences or bigger promises. It is practical, accessible, human-centred training delivered through the networks SMEs already trust. Skills will define the next decade, but who gets those skills will define whether opportunity grows or shrinks. For small businesses standing at the edge of transformation, the message is simple: don’t just build for the future. Train the future to include them.
Venture Flow and Funding Famine: Is Early-Stage Innovation Being Left Behind?.
Venture capital - private funding provided to startups in exchange for equity, has long fueled the innovation economy. It is how Airbnb scaled from a sketchpad to a household name. It is how biotech breakthroughs leave the lab. For decades, this funding model has backed bold ideas and high-growth businesses before they had profits, or even fully working products.
But as of 2025, that same venture engine is sputtering where it once roared: at the starting line. While venture investment overall is rising again, especially for later-stage startups and those riding the AI wave, a funding drought is quietly straining the earliest phases of the startup ecosystem.
This is the stage where ideas are fragile and unproven, where founders are building MVPs, testing markets, and trying to raise seed capital to survive the next 12 months. This is where early-stage innovation lives. And right now, it is being left behind.
This article explores what’s behind the imbalance in venture funding, how it is affecting new founders, and what can be done to ensure the next generation of startups doesn’t stall before it starts.
The Rebound Isn’t Reaching the Roots
Global venture capital is technically in recovery. PitchBook reported a 14% year-over-year rise in total VC investment in Q1 2025. But that rebound is misleading. The money is flowing primarily to Series B and later rounds, safe, scalable businesses with predictable exits.
Seed and pre-seed deals, on the other hand, are stalling. Fewer rounds are being closed. Valuations are shrinking. And deals are dragging on for weeks longer than they did even two years ago. Many early-stage founders without significant traction, or a buzzy AI angle, are simply being told to wait.
The result? A growing number of early startups are caught in limbo. They’re too early for scale-hungry VCs, but too
capital-intensive to bootstrap forever. Some quietly pivot into service models or pause development entirely, not because the idea failed, but because the funding faucet never turned on.
Investors often cite “market timing” or “risk management.” But in reality, this capital constraint reflects a systemic drift away from the purpose of seed-stage investment: to test what is possible, not just fund what is already working.
Founders on the Edge
This slow-motion freeze is disproportionately impacting new and underrepresented founders. With fewer warm intros and more scrutiny, many are finding it nearly impossible to break into funding conversations, especially outside major startup hubs.
Founders like Fatima, who’s building sustainable packaging tech, report meeting dozens of investors who express interest, but demand traction that requires funding to begin with. “They want revenue, user growth, and market validation,” she says. “But how do I get that without the capital to build?”
Many first-time founders are maxing out credit cards or juggling consulting work to keep their ventures alive, stretching timelines and burning out before the real journey begins. Some report being ghosted mid-diligence; others feel pressure to rewrite their mission to match funder preferences.
Accelerators, once the gateway to first checks, have also slowed their intake or narrowed their scope to repeat
founders or those in already-popular categories. The barriers to entry have returned, and they’re higher than ever.
Innovation Risks Going Quiet
What gets lost in this squeeze is not just opportunity, it is originality. Early-stage startups are the chaotic playground where experimentation thrives. It is where someone builds something strange, scrappy, and potentially transformative. That is the real value of a healthy seedstage ecosystem.
Without funding, these ideas do not pivot or evolve, they disappear. We are already seeing a slow-down in categories like climate tech, local services, and health equity platforms. These aren’t copycats. They are mission-driven ideas that don’t look like traditional software-as-aservice, and often don’t get a second look.
Worse still, some founders are beginning to self-censor. Instead of pitching what they believe in, they chase “what will raise,” bending toward investor trends. The result is a wave of lookalike startups competing for a shrinking pool of capital, while truly novel ideas are left unexplored.
As capital flows only to what’s familiar, the risk is not that we’ll stop building. It’s that we’ll stop building anything new.
Making the Early Stage Work Again
The good news? Some founders and investors are rewriting the rules. Micro-VCs, community funds, and mission-aligned accelerators are stepping in where traditional venture won’t. Models like Calm Fund’s rev-
enue-based financing or TinySeed’s long-view investments are giving early ideas space to breathe.
On the founder side, many are getting creative: launching faster, proving traction before raising, and turning to crowdfunding or customer-first funding models. The message is clear, don’t wait for permission. Build proof, then build your pitch.
There’s also a rising call for local action. Cities like Tulsa, Omaha, and Buffalo are piloting first-check programmes and founder stipends to de-risk the earliest phase. These models may not replace traditional VC, but they can keep the doors open for founders the mainstream market overlooks.
But real change requires support beyond the founder hustle. Local governments, ecosystem builders, and universities can help by offering first-check grants, mentorship networks, and investment-readiness programmes that don’t rely on coastal capital.
Venture capital wasn’t built to fund safe bets. It was built to fund what comes next. And yet in 2025, it’s doing the opposite, rewarding predictability and starving innovation at its most fragile stage.
The early-stage crisis is not about startup failure, it’s about funding hesitancy. If we want a diverse, dynamic future of entrepreneurship, we can’t wait for scale to believe in new ideas. We have to invest in them when they’re still messy. Still risky. Still possible.
Because if we only bet on what is already working, we lose the chance to create what has not been built yet.
Why Small Businesses Cannot Fill Job Openings Despite High Unemployment.
Across the country, “Help Wanted” signs have become a permanent fixture outside small businesses - from bakeries and auto shops to childcare centres and boutique retail stores. These signs are a cry for relief. Owners are eager to hire, desperate to staff up. And yet, those job openings remain stubbornly vacant.
At the same time, the national unemployment rate remains elevated, with millions still actively looking for work, or at least saying they are. It is a contradiction that should not exist. A market where jobs are plentiful and workers are available should be humming along. But instead, we have a labour market stuck in neutral.
This paradox reveals a deeper problem: it is not just about job supply or worker motivation, it is about a mismatch of expectations, priorities, and perceptions. The hiring crisis is not a technical failure. It is cultural. And it is costing small businesses more than just empty shifts, it is challenging their ability to compete, grow, and survive.
Jobs Are Open, But the Applications Are Not Coming
In early 2025, the National Federation of Independent Business reported that 42% of small businesses could not fill open roles, despite posting job ads, raising pay, and experimenting with incentives. This is not anecdotal, it is national. And it is not just about niche skills. The openings span entry-level retail, mid-skill trades, and service-sector work.
Take Marcus, who owns a neighborhood café in Detroit. He bumped wages, cut shift lengths, and added meal perks, yet turnover remains sky-high. “We’ve done job fairs, boosted Instagram ads, even tried same-day interviews,” he says. “People just don’t show.”
Meanwhile, unemployment lingers around 6%. Some states are higher. We are not lacking workers, we are lacking alignment. Jobseekers are not matching with the jobs being offered, and it is no longer enough to blame a “skills gap.” What we are really seeing is a “desire gap”, a growing disconnect between the kind of work businesses need and the kind of work people are willing to do.
The Work Has Changed, But So Have Workers
The labour force that once filled small business roles has undergone a quiet evolution. Post-pandemic introspection, economic precarity, and rising cost of living have shifted what workers want, and what they will tolerate. They are looking for more than a paycheck. They want flexibility, dignity, purpose, and a sense of growth. And when they do not see those things in a job listing, they swipe left.
Frontline work is also facing an image problem. Fairly or not, small businesses are often perceived as offering less stability, fewer benefits, and more unpredictable hours. And while many large employers have responded with flexible scheduling, wellness programmes, or educational reimbursements, most small businesses simply cannot afford that kind of arms race.
But there is another problem: storytelling. Even when a small business offers a great culture, mentorship, or a mission-driven environment, jobseekers do not always know it. The job posting gets lost in a sea of generic listings, and candidates don’t get a sense of what makes the experience human.
Small Business vs. Big Expectations
Today’s jobseekers are not just looking for a job, they are weighing lifestyle packages. Large companies have learned to sell an “employee experience,” complete with perks, remote options, and career ladders. In comparison, small business job posts often focus on duties and availability, leaving potential hires wondering, “What’s in it for me?”
It is not that small businesses do not offer value, they do. They offer community, autonomy, trust, and access to
decision-makers. But they rarely brand those things as benefits. And in a hyper-competitive job market, being quiet about what makes your workplace compelling is a losing strategy.
Some small businesses are starting to catch on. A hardware store in Minneapolis now includes a “Meet the Team” reel with every job ad. A local bakery in Phoenix offers weekly paid skill-building sessions, like latte art or cake design, as part of the onboarding process. These are not budget-breaking moves, but they speak to what today’s candidates care about: learning, growth, and a reason to believe.
Bridging the Hiring Gap, Before It Becomes a Survival Gap
There is no single fix for this paradox, but there are clear signals for what helps. It starts with reframing how small businesses view hiring. It’s no longer about slotting a person into a role, it’s about making a compelling case for why that role matters, and why someone should care enough to show up for it.
That means better storytelling. Stronger internal cultures. More listening, less assuming. It means investing in apprenticeships, coaching, and internal mobility, especially when you cannot compete on salary. It means trading
“this is what we need” for “this is what we offer.”
And above all, it means acting now. Because every unfilled job doesn’t just stall productivity, it risks becoming a symptom of a deeper failure to adapt. In a labour market full of contradictions, the businesses that win won’t be the ones shouting the loudest. They’ll be the ones telling the most human, honest story, and backing it up with a workplace that lives up to it.
The hiring paradox facing small businesses in 2025 is more than a short-term labour market quirk, it is a wakeup call. While job boards stay full and interviews go unattended, the deeper message is clear: the old playbook no longer works.
To attract and retain today’s workforce, small businesses must evolve beyond transactional thinking. That means understanding what motivates modern jobseekers, telling a better story about what work with them feels like, and delivering on the human aspects of the job that people crave, respect, trust, growth, and meaning.
Small businesses do not need to match big-company budgets. But they do need to compete in creativity, culture, and care. The ones who adapt will not just survive, they will become magnets for the kind of talent that wants to build something, not just clock in.
