• 4 Reasons Why This is The Golden Age of SMEs

    Despite their small size, SMEs (small- and medium-sized enterprises under 250 employees) account for two thirds of employment in the EU’s private sector. Moreover, between 2002 and 2010, net employment in the EU increased by 1.1 million jobs (around 0.9%) each year with 85 percent of growth seen in the SME sector (Eurostat). What factors are enabling SMEs to thrive in the 21st century?

    The Internet

     

    With digital technologies taking over our lives, ever more people are teaming up to start their own small enterprises online. E-business models stepped in to solve issues in regions with development limitations - be it geographical isolation or high youth unemployment. Now, tech-savvy youngsters can offer their products and services online to the whole world, even if they cannot find an offline employment opportunity. Apart from providing one solution to the youth-unemployment problem, e-business retains talent within the economy. At the other end of the spectrum, established family businesses in isolated areas can both preserve their traditions and extend their business opportunities by offering their goods online through solid platforms like China’s Alibaba. In this way, the Internet gives people the chance to continue doing what they are good at and opens a whole new world of opportunities where traditional employment options fail.

     

    Changing public perception

     

    There is a large shift in society’s view of small enterprises and self-employment. It is no longer viewed with skepticism and an increasing number of fresh graduates consider it as their first career choice. Public events such as Small Business Saturday have improved public awareness and attitudes toward SMEs. Small Business Saturday was established in 2010 in the US with the UK and other EU countries following in 2013. Its purpose is to promote, inspire, and support small and local businesses. The SMEs are encouraged to network and collaborate, while the consumers are invited to spend in small local stores. Together, these factors inform and inspire people with an entrepreneurial spirit to form their own legal entities instead of working for big corporations.

     

    Creating impact

     

    Working in a corporation means being just another of X-hundred employees. Tasks are often narrowly defined and if you call in sick or quit, the replacement will be found within a couple of days, if not hours. In SMEs it is different – your opinion is valuable and you create a direct and undeniable impact on the business. Not only does this increase engagement, but it can bring a colossal sense of satisfaction. In addition, SMEs often offer employees more flexibility, since the results achieved are more important than hours spent in the office.

     

    Small business = large benefits

     

    Being small gives enterprises a lot of overlooked advantages. Firstly, small companies can often adjust to new market circumstances easily because of their flexible internal structures. In a world of constant change fueled by rapid technological developments and unstable economies, it is extremely important to be ready to adapt to the new rules of the game. On the other hand, being small also means that companies are close to the clients and the real people out there, whereas large corporations sometimes lose touch with reality. Moreover, having fewer customers but offering them a warm personal approach and care is a great plus in the era of social media and growing distances between people.

      

    However, this is not to say that it everything is positive for SMEs. On average, productivity is decreasing in SMEs and the proportion of startups that fail is high. Numerous improvements in education and legislation are required to create a better environment for businesses and alleviate some SME-related issues, such as limited access to finance and talent. Creating high-value entrepreneurs and giving them the tools for success will help ensure the continued prosperity of SMEs in the future.

     

     

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