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Reflections on the document “ Small Business, Big World – a new partnership to help SMEs seize global opportunities ” -

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, Hungary. Background 1 SMEs in NMS.

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Reflections on the document “ Small Business, Big World – a new partnership to help SMEs seize global opportunities ” -

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  1. Reflections on the document “Small Business, Big World – a new partnership to help SMEs seize global opportunities”- a viewfrom NMS Magdolna Sass Institute of Economicsof CERS HAS and ICEG EC, Hungary

  2. Background 1 SMEs in NMS • At the beginning of transition: a relative absence of SMEs; deregulation and support programs: a quick growth, though still lower share compared to EU-15 • Mainly small and micro enterprises • On 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 schemes

  3. Background 2 A tale of twocompanies An IT company („bornglobal”) 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 extensivelyfrom ITDH and MEHIBforoutside-EUmarkets 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) • Established in 2001, 40 employees • Software and related hardware production • Quickly growing, esp. exports (DeloitteTechnologyFast 50 in 2007) • Since 2006: also FDI • Affiliates in EU and in Russia, local partners in many Asian and African countries • Institutional support minimal, „problems” in foreign markets solvedmainly through hiring experienced personnel with local knowledge (CE, Russia, Africa)

  4. Dilemmas • The 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 efficientuse of publicmoney • Delicate issues for the „cleaning up” exercise: • The problem of vested interests • The importance of the bottom-up approach • Targeting versus general support

  5. Dilemmascont’d • Cooperation versus competition: differing interests of member states in • Geographical scope • Sector scope (if any) • Size/extent of support • NMS „specialties” - an illustration • Costliness and riskiness of outside-EU-markets (though quicker growth and opportunities)

  6. Thankyouforyourattention!

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