2. Why SMEs Matter And Why Support Must Evolve
Lifeblood of the nation
This article is part of our Rethinking SME Support series, where we’re exploring how Central & Local Government, Economic Development Agencies, Chambers of Commerce and Business Associations could better support NZ’s SME community through collaboration, fairness and a new mindset. This is not about blame. It’s about possibility and how we can build a more connected, human, regenerative support ecosystem.
In our first article in this series, we talked about the opportunity and need to rethink how we support NZ’s SME community. This article takes one step back to ask - why does this matter so much? And why is evolution of the system now so urgent?
At RegenerationHQ, we spend every week listening to SME owners, walking alongside them and working with parts of the ecosystem trying to support them. The more we do this, the clearer it becomes -
👉 If we want a thriving, fair, regenerative economy in Aotearoa, SME support has to evolve.
Not because SMEs are fragile. They are remarkably resilient. But because too much of our current system is misaligned with how SMEs actually operate and what they truly need to thrive.
SMEs Are the Fabric of NZ Business Life
A few numbers to ground us -
✅ SMEs make up more than 97% of NZ businesses.
✅ They employ over 630,000 people.
✅ They contribute nearly a third of our GDP.
✅ They are often the backbone of local communities especially in the regions.
But these numbers only tell part of the story. What we see and hear is this -
👉 SMEs are not a single type of business. They are diverse, dynamic, deeply human enterprises woven through every part of Aotearoa.
They include -
multi-generational family businesses
sole traders and micro-enterprises
fast-growth startups
Māori and Pasifika businesses grounded in kaupapa
creative industries and social enterprises
emerging businesses in sustainability and circular economy sectors
high-export potential firms that don’t fit traditional sector models
In short - SMEs are the economy and the community. Supporting them well is about far more than driving economic outputs. It’s about strengthening the social and cultural fabric of NZ.
Why Support Must Evolve
So why does the support system need to evolve? Here’s what we see -
1️⃣ SMEs are not small corporates.
Many parts of our system still treat SMEs as if they are simply "smaller versions" of large companies with the same time, resources, capabilities and risk appetite.
They are not.
Most SME owners are deeply hands-on in their businesses. They juggle leadership, finances, customers, compliance and wellbeing daily, often with very little margin for error.
Support needs to be designed around that reality not an idealised version of it.
2️⃣ The “one size fits all” model is failing.
Too much SME support is delivered through one-size-fits-all programmes that miss the nuances of different types of businesses.
An export-ready Māori fashion label has very different needs to a local construction firm, or a sole-trader physiotherapist, or a tech startup, or a food and fibre micro-producer.
Great support systems flex to meet different journeys they don’t force diverse businesses into the same box.
3️⃣ The system does not meet many owners where they are.
Under-served businesses, Māori and Pasifika businesses, regional enterprises, women-led businesses, social enterprises, refugee and migrant-owned businesses often face higher barriers and receive less relevant support.
If we want fairness, equity must be built into system design not bolted on as an afterthought.
4️⃣ The landscape is becoming more complex, not less.
Digital transformation, climate adaptation, shifting consumer expectations and rapid market change are all putting new pressures on SMEs.
Support needs to help businesses build resilience and regenerative capability not just deliver compliance support or transactional advice.
5️⃣ Owners are carrying increasing mental and emotional load.
As we explored in Shifting Ground, owners are under huge personal pressure financially, emotionally and as leaders of their teams.
Support needs to recognise that leadership is a human endeavour and that sustainable businesses depend on sustainable leaders.
Support Is More Than a Programme It’s a System
One of the clearest insights we’ve seen from global examples is this –
👉 Great SME support ecosystems are not built from a menu of programmes. They are built from systems of trust, relationships and tailored pathways.
When owners experience the system as connected, responsive and human they lean in.
When they experience it as fragmented and transactional they lean out. Right now, too many owners in NZ are leaning out.
The Opportunity
This series is about possibility and there is enormous possibility here.
NZ has all the ingredients to build an SME support system that is -
✅ more connected
✅ more collaborative
✅ fairer and more regenerative
✅ better able to meet the real diversity of SME journeys
But we need to choose to evolve. That starts with shared understanding and shared willingness to try new approaches.
A Closing Word
At RegenerationHQ, we think - SMEs don’t live in silos so why should their support system?
Supporting SMEs well in 2025 and beyond will require a mindset shift across government, EDAs, Chambers and associations. It will also require humility, collaboration and a deep understanding of the human side of business life.
We believe that shift is possible. In this series, we’ll keep exploring how.
Stay Connected
If you’d like to follow this series and be part of the conversation about building a better SME support system for Aotearoa, or you’d like a quiet conversation about how to impact your business results now, here’s how to get hold of us –
📞 Phone +64 275 665 682
✉️ Email john.luxton@regenrationhq.co.nz
🌐 Contact Form www.regenerationhq.co.nz/contact
If you’d like to read more RegenerationHQ thinking on SME business and other things, go here – www.regenerationhq.co.nz/articlesoverview
🔹 RegenerationHQ Ltd - Business Problems Solved Sensibly.
Supporting NZ SME Owners to Exit Well, Lead Better and Build Business Value.
Coming next in the series -
👉 Why SMEs Matter and Why Support Must Evolve