NAVIGATING ETHICAL CHALLENGES: HOW POLICIES AFFECT SMES GROWTH IN THE SOUTH-SOUTH DIGITAL ECONOMY

Abstract

In the rapidly evolving digital economy, small and medium enterprises (SMEs) are pivotal drivers of innovation, employment, and economic development. These enterprises are crucial for economic dynamism, particularly in developing regions like the South-South region of Nigeria. Despite their potential, the growth of SMEs in these regions is often impeded by stringent ethical policies. These policies encompass regulatory compliance, transparency, fair labor practices, environmental responsibility, anti-corruption measures, and digital privacy, and are designed to ensure responsible business conduct and protect stakeholders. However, while these policies aim to promote fair business practices and safeguard consumer and worker rights, they frequently pose substantial challenges for SMEs striving for growth in competitive digital markets. Globally, ethical policies present a dual-edged impact on SMEs. On one hand, they can enhance transparency, accountability, and trust, which can foster investment and growth. On the other hand, they may create formidable barriers, particularly for SMEs with limited resources. In developed economies, SMEs often benefit from robust support systems and resources to meet ethical standards, turning potential impediments into opportunities. Conversely, SMEs in less developed regions like Sub-Saharan Africa face increased operational costs and reduced flexibility, limiting their ability to innovate and expand. This study aims to analyze the impact of ethical policies on SME growth, identify specific impediments, and evaluate the challenges faced by SMEs in complying with these policies within the South-South region of Nigeria