Small Business Big World a new partnership to help SMEs seize global opportunities a view from NMS Magdolna Sass Institute of Economics of CERS HAS and ICEG EC ID: 661475
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Slide1
Reflections on the document “Small Business, Big World – a new partnership to help SMEs seize global opportunities”- a view from NMS
Magdolna Sass
Institute of
Economics
of
CERS
HAS and ICEG EC,
HungarySlide2
Background 1 SMEs in NMSAt the beginning of transition: a relative absence of SMEs; deregulation and support programs: a quick growth, though still lower share compared to EU-15Mainly small and micro enterprisesOn average less developed in human resources (e.g. language, managerial)Still many „too weak-too small-too isolated”Lower level of internationalisation compared to EU-15, though some successfully internationalising, even „born globals
” in innovative sectors
Institutional framework for support, incl. for internationalisation less advanced, though differing from country to country
Cases of overlaps, parallel structures, complicated organisational systems and irrelevant programs
Missing evaluations on existing support schemesSlide3
Background 2 A tale of two companiesAn IT company („born global”)
Established in 2001, 40 employees
Software and
related
hardware
production
Quickly growing, esp. exports (Deloitte Technology Fast 50 in 2007)Since 2006: also FDIAffiliates in EU and in Russia, local partners in many Asian and African countriesInstitutional support minimal, „problems” in foreign markets solved mainly through hiring experienced personnel with local knowledge (CE, Russia, Africa)
An innovative company in the medical precision instruments sector
30 employees, established in 1990
In some small market segments among the top 5 companies worldwide
Around half of its exports go to the EU, the other half to many countries in the American and Asian continent
Used support
extensively
from ITDH and MEHIB
for
outside-EU
markets
Barriers to internationalisation: language (Japanese and Chinese), info on markets, lack of foreign partners and lack of financing
Sector specific: import licences and need for local permits (Argentina, Brazil, USA, Canada, China, Japan) Slide4
DilemmasThe present „labyrinth” of support: reason and room for cleaning up for giving better access to SMEs to support and to information on support and for a more efficient use of public money
Delicate issues for the „cleaning up” exercise:
The problem of vested interests
The importance of the bottom-up approach
Targeting versus general supportSlide5
Dilemmas cont’dCooperation versus competition:differing interests of member states inGeographical scopeSector scope (if any)Size/extent of support
NMS „specialties” - an illustration
Costliness and riskiness of outside-EU-markets (though quicker growth and opportunities
)Slide6
Thank you for your attention!