The Importance Paradox: An Analysis of the Microenterprise Landscape in Colombia

Even though microenterprises in Colombia represent approximately 80 percent of the national productive sector, accounting for 33 percent of the labor force and approximately 5 percent of the aggregated value, the microenterprise segment has many problems in productivity, formality and innovation compared to its bigger brothers. This is a paradox of utmost relevance as these structural problems have greatly influenced the COVID-19 impact on microenterprise, one of the most affected sectors during the crisis. Taking advantage of a new, detailed national microenterprise survey (EMICRON), this document sheds a light on the structural and institutional problems that affect the wellbeing of microenterprises in Colombia and characterizes the junctural impact of the COVID crisis in the sector. This document indicates that the direction of the economic recovery should not only focus on overcoming the crisis but should incorporate long-term and structural policies.