09 August 2019 - 14:00
The SME’s skills in more industrialised countries
More flexible and adaptable in a global competition path
Small and medium-sized enterprises (SMEs) currently represent more than 95% of all companies in industrialised countries and account for 65-70% of employment, generating a large part of the new jobs created in the OECD economies. However, it should be said from the start that the subject of SMEs cannot be dealt with uniformly on an international level given that they only have certain characteristics in common and that there are considerable differences due first of all to the definition and classification used by statistical institutions in each OECD country based on variables such as employment, added value, etc. Furthermore, the SME definition varies according to the existing regulations in each country and is correlated to the different levels of development in each of them.
The spread of new automation and artificial intelligence technologies and globalisation processes in many production sectors has notably reduced the importance of two factors which in previous phases of the industrial economies played a central role in terms of competitiveness: product standardisation (limited variance for a specific type of product) and the so-called economies of scale, i.e. in those economies where there is an increase in the scale of production there is a corresponding reduction in the unit cost of the product.
At the same time, some typical characteristics of SMEs have become even more evident, including significant production flexibility and adaptability to the trend of the economic cycle, even if some traditional problems faced by SMEs persist (and in some cases are getting worse), including funding and self-financing difficulties, inadequate management capacity, and insufficient production levels, etc.
Most existing SMEs operate in the services sector, representing two-thirds of the economic activity and employment in the OECD area. SMEs are mainly found in wholesale and retail trade, the tourist industry, construction and business services. Those in the manufacturing sector make up one of the most dynamic areas in the high-tech sector: from information and communication technology, to biomedical and materials technology.
The growing trend of larger companies to subcontract certain activities or stages of the production process and the introduction of new technologies have allowed SMEs to gain new markets and enabled an annual growth of more than 10% (in terms of added value) in the “high-knowledge content services” (World Bank). It is estimated that between 30% and 60% of the activities broadly defined as “innovative” are concentrated in SMEs in the OECD area: one revealing example is the creation and redesign (re-engineering) of products and services able to respond to the demands of new markets or new organisational systems in order to increase productivity, develop and apply new production technologies, or increase sales.
In most OECD countries, there is a core of SMEs, which varies in extent. These SMEs are characterised by very high annual growth, are highly innovative and continuously expanding, thus guaranteeing a rate of new job creation that is much higher than that of large firms. These are mainly SMEs connected to the world of research and development, present in highly specialised sectors and located in regions characterised by sector or sub-sector networks and production districts, real or virtual. These SMEs play a central role in the development of new products, processes and markets, and are at the forefront of the so-called new economy.