THE WINNERS Worldwide SME Research from 2015 to 2018 Part I Executive Summaries 5th edition – 9/01/2018
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Worldwide SME Research from 2015 to 2018 Executive Summaries by Prof. Dr. Norbert W. Knoll von Dornhoff
I.
SME strategies for success A global study that reveals the key drivers of success for SMEs in 2017 and beyond- OXFORD ECONOMICS 2017
Results and conclusions for the SME policy The 2017 American Express Global SME Pulse Report, conducted by Oxford Economics, reveals that SMEs are entering a new realm of optimism, determined to deftly navigate through challenges as they plot their path to growth. Our inaugural Global SME study, which surveyed opinions of 3,200 business leaders around the globe, showed that while business leaders are concerned about economic and political volatility, they are resolute about readying themselves for expansion, with their sights firmly set on entering new domestic and overseas markets
SME strategies for success SMEs are responding to uncertainty by developing effective strategies that build their competitive strengths. They are also developing strategies to build from this strength and expand into new domestic and export markets (see Fig. 2).
Conclusions and recommendations SMEs are particularly exposed to growing political and economic uncertainty. Each SME’s circumstance will be unique, but the analysis suggests some recommendations all should consider: ■ Don’t be deterred by an uncertain business landscape. A volatile environment can actually play to the agility and risk appetite of SMEs, which often can respond more quickly in a changing world than large corporations. SMEs should assess their specific appetite for risk, and act accordingly. ■ SMEs should assess their current strength in the Four Aces and determine where investment is needed to build their capabilities in Applying technology, Agility, Accelerating innovation, and Attracting talent.
■ Building capabilities will not be simple for many SMEs. Smaller and younger companies don’t have the resources to invest in all areas, and will have to develop the Four Aces over time, while managing a growing business. More established businesses can use a structured change programme to tackle entrenched ways of working and shift organisational culture. ■ SMEs should focus on particular market niches to expand into new market segments. For some firms this can also encompass international expansion. ■ To build these operating capabilities, SMEs will need to find new financing. SMEs should look beyond traditional bank lending and see if the range of new sources could better meet their needs for flexible and cost effective finance. ■ Government policy interventions need to look beyond the tried and tested and focus on the support SMEs will need for future development. To do this, they need to understand the evolving needs of their diverse SME community.
SMEs play an essential role in generating wealth, providing employment and sustaining communities. There is a strong case to be argued that, more than ever, they need to play their full role in economic development. This study has highlighted the many opportunities opening up to SMEs and the actions successful SMEs are taking to take advantage of them. Financial providers, governments, and regulators also share an important role in nurturing and helping them thrive.
II. Innovation in SMEs - Work Programme 20182020 Europe's entrepreneurs have always been at the cutting edge of innovation and invention. And this is all the more true in the 21st century. Europe's human capital, deep science culture and solid technological base hold great potential for delivering major progress in fields of societaland economic relevance. Exploiting this potential has become more challenging than ever however, in particular for many SMEs. The globalisation, the high degree of interconnectivity and new technological advances have forced many SMEs to reinvent not only their productsand services, but also their business and organisational models, in view of staying competitive in a fast-paced economy. In the last years, Horizon 2020 has helped to develop a more performant SME innovation ecosystem through a series of capacity-building, network and other support actions. But there is ample evidence – including from the Horizon 2020 interim evaluation – that it could do more help SMEs to innovate and grow. Many SMEs continue to struggle to adopt the righ strategy, business process, skills, or other resources. More: http://ec.europa.eu/research/participants/data/ref/h2020/wp/20182020/main/h2020-wp1820-sme_en.pdf
III. Small and Medium-Sized European Regions and Cities
Enterprises
in
Scope The main objective of this research activity is to map and analyse the territorial patterns and performance of SMEs in Europe, and to propose territorial development strategies that can be considered in different regions and cities to further strengthen the development and sustainability of the SMEs. Further reading.
Policy questions What are the distribution patterns of SMEs across European regions and cities in terms of size, employment, sectors, and economic weight? Can specific territorial patterns be identified concerning the location of new SME start-ups, their survival rates and growth development? To what extent and in which ways do the SMEs contribute to business development, job creation and innovation in European regions and cities, in particular in the areas of the creative/knowledge economy, ICT and the low-carbon economy? What are the key dynamics and drivers for the growth of these SMEs, especially after the crisis? What are the main opportunities and obstacles for SMEs to grow? Does this differ across the European territory, and if so, how? Are development conditions better in dense urbanised areas? How does international connectedness and globalisation affect SMEs? How could SME development best be supported in different types of regions/territories? What type of territorial development strategies should be considered in different regions and cities to further strengthen the development and sustainability of the business environments for SMEs? What is the particular role of the public sector and where can public money be spent most efficiently?
Download the study: https://www.espon.eu/sme
IV- Incrementality Study of the Canada Small Business Financing Program, March 2018 Conclusion The aim of this paper was to measure the level of incrementality of the Canada Small Business Financing Program (CSBFP). The CSBFP is a statutory loan loss-sharing program governed by the Canada Small Business Financing Act (CSBFA) and administered by Innovation, Science and Economic Development Canada (ISED). Under the CSBFP, the Government of Canada and the private lenders share the burden of risk on loans in order to facilitate access to financing for small and medium enterprises (SMEs). Data suggest that SMEs that are young, smaller in size and in some specific industry sectors such as accommodation and food services, may suffer from credit rationing.
A program is said to be incremental if a sufficient proportion of SMEs would have had their financing request denied if the program did not exist. In this study, the incrementality of the CSBFP was measured based on the following methodology, consisting of a twostep approach: Estimating a model similar to a bank's credit scoring model, applied to non-CSBFP borrowers. The model used is a logit model where the dependent variable is a binary variable that relates to the approval or refusal of a business's debt financing request; and Using the previous estimated model to predict which CSBFP borrowers would have had their debt financing request approved or denied. The estimated proportion of businesses that would have been denied is the level of incrementality for the CSBFP. Using the Survey on Financing and Growth of Small and Medium Enterprises, 2014 linked to the Canada Revenue Agency General Index of Financial Information 2010–2014 and Payroll Account Deduction (PD7), we obtain a level of incrementality of 69 percent. Thus, the proportion of CSBFP borrowers whose debt financing requests would have been rejected is 69 percent if the program did not exist. Finally, if partial incrementality was included as part of this analysis, it is expected that almost all CSBFP loans would be considered incremental. Download the http://www.ic.gc.ca/eic/site/061.nsf/eng/h_03072.html#a09
study:
V- A Comparative Study on Development of Small and Medium Enterprises (SMEs) in A Abstract This research paper explores the role of small- and medium-sized entreprises in the economy of different countries, with a particular focus on Azerbaijan. The purpose of the research is to support and intensify the development of small- and medium-sized businesses
in the country by determining the effectiveness of programs held by the government to encourage greater SMEs activity, as well as presenting successful examples from international practices in order to adopt them to Azerbaijan's conditions. In the current period, the improvement of the entrepreneurship culture and enhancing the scope of small- and medium-sized businesses are important for the future economic growth, employment and income of the country’s population.
Conclusions Given the above, it can be concluded that although SMEs have not developed properly in Azerbaijan, certain steps are already being taken to change this – these steps are mainly related to the simplification of business registration procedures and improvement of tax administration. However, based on statistical indicators, we can say that these steps are still not satisfactory and through taking advantage of world experience, it is necessary to implement more incentive methods. Recommendations to be considered for the greater development of SMEs in Azerbaijan are enumerated in the following section. CESD – Center for Economic and Social Development
Download the study: http://cesd.az/new/wpcontent/uploads/2017/11/CESD_SME_Research_Paper.pdf
VI. KfW Research Focus on Economics Digitalisation in German SMEs: state of implementation and investment Conclusion The analysis of digitalisation activities across the SME sector shows that, with a share of 26%, fewer SMEs are expanding the digitalisation of their business than previously assumed.
Small enterprises and construction enterprises are least likely to implement digitalisation projects and spend comparatively small amounts on digitalisation. The highest shares of enterprises with completed digitalisation projects are found among the large SMEs, as well as in knowledge-based services and in R&D-intensive manufacturing. However, many enterprises are not aware of the benefits of (further) digitalisation. In addition to measures aimed at tackling the above barriers to digitalisation, an important starting point is to raise awareness about the opportunities
and advantages provided by digitalisation. Not least, measures that accompany the support of R&D while providing financial support for digitalisation projects could be helpful as well. More‌. https://www.kfw.de/PDF/DownloadCenter/Konzernthemen/Research/PDF-Dokumente-FokusVolkswirtschaft/Fokus-englische-Dateien/Fokus-2018-EN/FokusNo.-202-March-2018-Digitalisation-in-German-SMEs.pdf
VII. Innovative green-technology SMEs as an opportunity to promote financial de-risking Abstract The authors recommend that the G20 target innovative greentechnology SMEs as an opportunity to promote financial de-risking while addressing Paris Agreement commitments and UN Sustainable Development Goals. This should be achieved by creating signals for private investors through: (1) a reporting system that can help monitor the scale-up of green-technology SMEs; (2) the use of public funds to signal innovative green-technology SMEs to investors; and (3) the inclusion of SMEs in the design of green finance platforms. By implementing these recommendations, the G20 will ensure that innovative, low-carbon SMEs become attractive, low(er)-risk investment opportunities for the private sector.
Citation Elena Verdolini, Céline Bak, Joël Ruet, and Anbumozhi Venkatachalam (2018). Innovative gree n-technology SMEs as an opportunity to promote financial derisking.Economics: The Open-Access, Open-Assessment E-Journal, 12 (2018-14): 1–12. http://dx.doi.org/10.5018/economics-ejournal.ja.2018-14 More: http://www.economics-ejournal.org/economics/journalarticles/2018-14
VIII. OECD: Enhancing the Contributions of SMEs in a Global and Digitalised Economy, Paris, 7-8 June 2017 This document provides a synthesis of the current state of knowledge about small and mediumsized enterprises (SMEs) and their contributions to economic and social well-being. It describes the diverse characteristics of SMEs and th opportunities and challenges they face in a globalised and digital economy.
It also identifies areas where knowledge or data gaps exist and where more analysis is needed. The document presents the case for launching the future development of an OECD Strategy for SMEs, to help Members and Partners take a coherent approach to policies which impact and/or target SMEs, including across levels of government; enhance policy synergies; and address potential trade-offs. The future development and implementation of an OECD Strategy would help governments level the playing field for SMEs and enable them to enhance their contributions to inclusive growth in different economic and social contexts. Full version: https://www.oecd.org/mcm/documents/C-MIN-2017-8-EN.pdf
IX. WUSME World Union of Small and Medium Enterprises International SME Convention in New Delhi, April 22nd – 24th 2018, Business Beyond Borders Title: The Indian Economy: GDP (PPP) per capita, Exports, Trade Balance, FDI - Foreign Direct Investments and Economic Growth in a country comparison
Statement of WUSME General Secretary Dr. Norbert W. Knoll von Dornhoff, Professor of economic and fiscal policy, International University of Entreprenology, Hawaii, USA Abstract The primary goal of each country is to increase the prosperity of its people and to alleviate poverty. The most important measure of success is the GDP (PPP) Gross Domestic Product per capita. A decisive contribution to economic growth is been generated by exports, FDI - international direct investment and economic partnerships. As the vast majority of companies are SMEs (including crafts and farms), they contribute significantly to the prosperity of the population and employment. I thought it useful to have a closer look at the economic development of the Indian economy in comparison to BRICS Countries and smaller European Countries (west: Austria, east: Poland). In my brief contribution, I would like to present three examples of recommendations on how governments could further improve their support of the international economic relations of SMEs and Crafts in their Countries. 1.) The Austrian Model for the Promotion of External Economic Relations and its financing. It is one of the most successful export promotion systems in Europe. 2.) Cooperation of domestic banks in India with the European Investment Bank (EIB), taking use of EU programs available in non EU Countries for SMEs and working together with United Nations Agencies, e.g. the UNIDO. 3.) Additional funding for associations promoting SMEs: A very interesting initiative in Hungary: The “1% Law�
X. State of the Small & Growing Business Sector: 2017 Impact Report by the Aspen Network of Development Entrepreneurs Since 2009 ANDE has been tracking the state of the small and growing business (SGB) sector to assess its growth and impact on emerging market economies. This year’s report begins with an overview of SGB intermediaries in 2017. including data on capacity development services, direct investments into SGBs, and donor funding. Next, the report focuses on trends and activities at ANDE’s seven regional chapters that were active in 2017: Brazil, Central America/Mexico, East Africa, East and Southeast Asia, India, South Africa, and West Africa. Here are some report insights. Check out the report to get the full picture:
https://www.andeglobal.org/blogpost/737893/PublicationsLibrary?tag=SME