Smaller firms, greater risks

“Smaller firms greater risks- How Strait of Hormuz disruptions could trigger an exclusion effect for  small and medium-sized enterprises” was published by the United Nations Conference on Trade and Development (UNCTAD) on September 8, 2026, and explores the heightened risks faced by small and medium-sized enterprises due to disruptions in the Strait of Hormuz.

It highlights how such disruptions do not affect all businesses equally: while large companies can diversify their risks across suppliers, markets, and financing sources, SMEs are far more exposed to rising costs and supply chain interruptions. As energy, transport, and financing expenses increase, SMEs often find their profit margins squeezed, sometimes forcing them to scale back operations or even exit the market entirely.

This exclusion effect is particularly concerning because SMEs are fundamental to the global economy, accounting for 90% of businesses, 70% of employment, and half of global GDP. The document details how recent trade shocks, such as spikes in crude oil prices and shipping disruptions, have disproportionately impacted smaller firms, especially in developing economies where the cost of importing goods and accessing finance is significantly higher for SMEs.

The analysis also draws on the experience of the COVID-19 pandemic, showing that smaller firms were more likely to suffer sales declines and greater financial vulnerability. Ultimately, the report underscores the need for targeted policy responses to ensure SMEs remain resilient and included in global value chains, as their exclusion can lead to increased unemployment, reduced household incomes, and greater social vulnerability.

Read more: https://unctad.org/system/files/official-document/osginf2026d5_en.pdf