Journal of CyberTherapy & Rehabilitation
Fall 2011, Volume 4, Issue 3
“When you undervalue who you are, the world will under- value what you do and vice versa,” said financial guru Suze Orman. Is this true for small and medium sized enterprises (SMEs) that contribute to the attainment of information and communication technologies (ICT) goals in Europe? Read on, and judge for yourself.
According to UEAPME, the European association repre- senting crafts and SMEs, 99.8% of Europe’s 23 million enterprises are SMEs. The most recent survey of SMEs, ending February 2011, showed that 21% more SMEs showed declining vs. increasing profits. That same survey pointed to causes such as the increased cost of oil and com- modities, resulting in a 69% increase in production inputs, and an improving European economy resulting in a 46% increase in labor costs. Among the most common economic challenges reported by SMEs are finding customers, obtaining financing, and competition. The European Commission (EC), recognizing that SMEs provide 67% of all jobs in Europe, is committed to collecting these data to en- sure that SMEs have access to adequate financing.
Between 2002 and 2008, the SME job engine was churn- ing, increasing by 1.9% annually vs. 0.8% for large com- panies. In 2008, the Small Business Act for Europe (COM 394 final) was launched, just before the eco- nomic slowdown brought this powerful job creation engine to a temporary halt.
So-called “micro” firms, employing an average of two people, are the mainstay of the European economy. The 2009 EC report found that “For micro enterprises, gross investment in tangible goods amounts to 24% of value added, compared to 19% for all firms … higher than could be expected on the basis of their profitability, underlining their importance for the EU-economy.”
The value of SMEs to the EU is further underscored by the relative dearth of companies with revenue greater than €100 million. A 2008 article on ICT SMEs reported the number of large companies at 2,006 in the EU (for a pop- ulation then numbering 310 million) vs. 3,176 large com- panies in the U.S. (for 291 million people). The EU ICT community has its own association of SMEs formed in 2007, PIN-SME (see http://pin-sme.eu/): It currently rep- resents 50,000 ICT SMEs that provide approximately 200,000 jobs.
Another organization for SMEs, founded in 1996, is SME UNION (see http://sme-union.org/). It is the business organization of the European People’s Party, representing a network of pro-business politicians and political organizations. “Its top priority is to reform the legal framework for SMEs all over Europe and to promote and support the interests of small and medium-sized enterprises which, due to their willingness to take risks and responsibility, are the engine of the European economy, thereby contributing to eradicating unemployment and promoting economic growth in Europe.”
Efforts to promote economic parity made by the EC and organizations such as those mentioned above are essential to the economic security of SMEs. This is evidenced by the fact that although SMEs win 60% of public procurement contracts, the value of such contracts represents only 33% of market share. This EC study reported that the job- creating micro enterprises garnered just a 6% market share. Thus, SMEs are underrepresented by between 14-21% (based on 2006-2008 data) relative to their importance to the EU economy. This is not insubstantial when you consider that public procurement represents 19% of EU GDP.
As UEAPME Secretary General Andrea Benassi said in a recent statement, “The EU is not suffering from a shortage of entrepreneurship in ICT; but it is suffering from a shortage of ICT SMEs that are empowered to grow and innovate at international competitive levels.” As an owner of an EU SME, my future may depend on my willingness to take an activist role to ensure that my company is not undervalued, and I urge my colleagues to do the same.
Brenda K. Wiederhold, Ph.D., MBA, BCIA
Editor-in-Chief, Journal of CyberTherapy & Rehabilitation
Virtual Reality Medical Institute