Working Through Violence: SMEs and the SDGs in Fragile Urban Spaces (UrbanSMEs)

In much of the world, small and medium-sized enterprises (SMEs) are the main providers of jobs and livelihoods. This is particularly true in large cities in poor countries that will in the future house a growing share of the world's population. Many of these cities are also places where violence is on the rise. SMEs are often victims of violence and crime, such as extortion and robbery. In addition, SMEs were particularly hard hit by the Covid-19 lockdowns. Yet SMEs can also be involved in violent activities themselves, for example when they collaborate with gangs or launder illicit money. In other situations, SMEs can even be key actors in creating peaceful and prosperous urban communities. This project studied these dynamics in seven violent cities to generate insights for research and policy that can help SMEs become more positive contributors to sustainable development. Led by the Center for Development and Environment (SUM) at the University of Oslo, our main partners included Universidad de los Andes (Bogota, Colombia), University of Stellenbosch (South Africa), CDA Collaborative Learning (Cambridge, USA) and the Peace Research Institute (PRIO), Norway. Together, we compared the strategies of SMEs in eight cities experiencing different forms of violence: Beirut, Caracas, Cape Town, Bogota, Kampala, Medellin, San Pedro Sula and San Salvador. We combined different research methods, using case studies together with in-depth fieldwork that brought the research team together around a common research agenda to identify both commonalities and context-specific findings. Data were collected through a telephone survey with 86,000 respondents, including owners of large and small businesses, as well as control groups. In addition, we conducted interviews with business leaders and representatives from business organizations. These focused on small businesses' relationships with violent actors and authorities, and on changes resulting from government responses to crises, including the Covid-19 pandemic. Our main findings fall into four categories. First, the quantitative data and the first round of interviews showed that in vulnerable contexts, SMEs that engage with their local communities are more likely to succeed as businesses. This engagement can be through socially conscious hiring processes, local organizing, or funding local activities. SMEs' ​​engagement with their local communities can also help strengthen local collective resilience to socio-political crises. Overall, this shows that for SMEs, there is no contradiction between economic performance and social engagement, but rather the opposite. The second group of conclusions concerns SMEs' ​​resilience to violence. The most common form of violence against SMEs is extortion with threats. However, our detailed case studies show that while "everyone pays" in some areas, in other contexts SMEs employ a range of strategies to deal with extortion, from avoidance (for example, through relocation or avoiding visibility), adaptation (by changing business practices), negotiation (either directly with the perpetrators or through intermediaries), and finally resistance. The latter depends on access to extraordinary resources, whether financial or social (networks). The third group of insights is that SMEs in vulnerable contexts cannot be understood solely as economic actors. They play multiple roles in society and must be understood as parts of complex social systems that include family relationships and power hierarchies in addition to commercial relationships. Without an analysis of such relationships, we cannot understand the ability of SMEs to survive and flourish in vulnerable contexts either. The final conclusion points to the relationship with state actors. Criminal organizations often coexist with, and are sometimes intertwined with, state presence in various forms of local and "micro-politics". But in weakly institutionalized contexts, criminal and state extortion can also be substitutes: the research identified several cases where extortion by criminal actors was reduced, but where state actors took over functions from criminal actors. In terms of project deliverables, we published fourteen academic articles as a project team, most of which were the result of collaboration between team members who explicitly aimed to deliver joint publications that united researchers from the global North and the global South. We also conducted a number of conference presentations, lectures, research stays and exchanges. We used these insights to describe how small businesses can contribute to several of the UN Sustainable Development Goals, including Goals 8 (decent jobs and economic growth), 11 (sustainable cities and communities) and 16 (peace, justice and strong institutions).