SMEs AND ENTREPRENEURS ARE KEY IN SPEARHEADING THE EU’S ECONOMIC RECOVERY

SMEs are the beating heart of Europe’s economy, accounting for over 90% of all businesses in the EU and for more than half of its gross domestic product (GDP) while employing about 100 million EU workers before the pandemic. Prior to the pandemics there were about 23 million SMEs generating a higher added value of 3.9 billion EUR. Different to large corporations, SMEs are highly flexible, revealing a superior flexibility to technical shifts, higher promotion of income distribution and better adaptability to fluctuations in the market and new customer requirements, while their organizational structure allows for quicker decision making.

European small and medium enterprises (SMEs) have the potential to drive the  recovery post-COVID-19, but a collective effort from governments, businesses and consumers is needed to help them thrive.

While government support has allowed some SMEs to continue operating, support schemes alone are not enough. Therefore, we need a collective effort from governments, SMEs themselves, and consumers, to lead the economic recovery.

SMEs contribute significantly to the economy, employment, and sense of community, and are crucial to Europe’s recovery, yet the challenges faced by these businesses are often overlooked.

Not only do consumers believe SMEs contribute to positive economic outcomes, which are comparable to national and multinational companies, they also see SMEs as providing additional value by creating positive social and environmental outcomes. Compared to larger companies, citizens believe SMEs are more transparent, ethical, and accountable, as well as being more responsive to the community and balancing the needs of various community subgroups.

While financial support is crucial, governments must provide SMEs with the tools needed to create a sustainable future. Support is needed to help SMEs adapt by  particularly transitioning to online and digital marketing channels. Supporting SMEs to establish a digital presence will provide a sustainable pathway to attract and engage customers.

Government support is not enough. It is equally important that SMEs work to create sustainable strategies for themselves, such as adapting products to fit with evolving local community needs. Alongside the adoption of digital technologies, SMEs must create a compelling reason for consumers to choose them over larger businesses. While SMEs do not have the economies of scale to compete on price, they can look to leverage local connections, close customer relationships, and create unique offerings based on their local knowledge to become embedded in the community. SMEs should also look to create networks, work together and cross-promote.