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Wednesday, 9 November 2011

Cut Small Businesses A Break Not A Push Overseas

The European Commission's SME policy launched today encourages European small and medium sized enterprises (SMEs) to seek their fortunes in emerging markets, like China, India, Russia, South East Asia and Latin America.  

The Commission Communication ‘Small Business, Big World - a new partnership to help SMEs seize global opportunities’ says that only 13% of EU SMEs operate outside the EU and shows examples like European SMEs active in chemicals in Brazil.  We really appreciate the Commission throwing their hat in the ring for us small businesses but what role can they really play in this?

As a European SME, Sustainability Consult is among the 13% of companies with business outside the European area.  We also have an international team and are very interested in bridging the gap between Europe and the rest of the world.  And it’s working well so far. 

What's more of a challenge to SMEs, particularly in Belgium is the sheer cost of employing staff.  Not all EU Member States are like that but Belgium is a real tough nut to crack.  Taxes on employers are heavy and the conditions act as a disincentive to employment.

At yesterday's Biotech SME Awards, Daniel Calleja Crespo, the EU's SME Envoy talked about the 23 million SMEs in Europe and the 23 million unemployed.  A shiver went down my spine as he said if every SME could just employ one more person, there would be no unemployment.  I know it’s a simplistic view but it speaks volumes to me as a potential employer.  So why is it so bureaucratic and expensive to take people on? 

In Belgium, bonuses are not based on performance like in any normal economy.  No, in Belgium, a thirteenth month is paid by the employer as an automatic bonus.  Add to that not just an entitlement to paid holiday which is reasonable enough but an additional month of pay for that holiday.  So, twelve paychecks become fourteen.  How can that be right?

SMEs in Europe account for two thirds of jobs in the private sector and have created 80% of all new jobs over the past five years.  In this economy, it’s great that the Commission wants to lend a helping hand but there are clear barriers to helping the SME sector become a serious player in lifting Europe out of this economic slump.

Commission strategy:

Commission press release:

Blog by Kathryn Sheridan

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