How Policy Ambition & Big Business Action can Help in Re-starting the Economy for SMEs
SME’s form the basis for a healthy and fair economy, but the pandemic has put many of them under pressure. Large businesses can be highly important to manage the crisis and revitalize SME growth. At the same time, such cooperation needs to be backed by an effective SME policy in order to maximize its leverage.
Moderated by Dr. Paul Rübig, President SME Connect, Ex-Member of the European Parliament, the Virtual meeting saw such high-level speakers such as Monika Hohlmeier MEP Chair CONT Committe, BUDG Committee, Board Member SME Connect; Ivonne J. Bollow, Global Director Corporate Public Policy, METRO AG; Markus Schöberl, Director Seller Services, Amazon; Julian Cacchioli, Vice-President Corporate Affairs EMEA & India, Herbalife Nutrition; Johannes Nitschke, Director EU Government Affairs, Siemens; Henna Virkkunen MEP, ITRE Committee, Co-Chair SME Circle of the EPP Group; Svenja Hahn MEP, IMCO Committee; Ondrej Kovarik MEP, ECON Committee, Board Member SME Connect.
After Dr. Paul Rübig introduced the topic, Monika Hohlmeier started the discussion by raising a concern: during the pandemic, member states will agree on certain instruments of resilience and investments, but at the same time they will not pay that much attention at the innovation and the research area. It’s important to invest in a wider spectrum of areas, not just digitalization and the health areas. She believes that this is very significant not for just coming out of the crisis, but for the future as well, as Europe is quite far behind compared to China and the USA. Another reason why large companies could and should contribute to helping SME’s is that small and mid-cap businesses are very often suppliers, partners and clients for the big businesses. If the infrastructure of the SME’s is suffering it will affect the big players as well, all this is quite crucial for the economic development.
Continuing the conversation, Ivonne J. Bollow, speaking for METRO AG, talks about how much METRO has contributed to help out the SME’s that are their customers. Then, she highlights the importance of the connection between the government/policymakers and the SME’s themselves: most of the time small businesses don’t even know how to get support from the government, without which they can’t survive. On their behalf, METRO informs their customers (restaurants, cafes, and others) about the government’s decisions that could be beneficial for them. For example, installing hotlines for restaurateurs by providing all the information, creating chats for them to communicate with others in the same area to get some help and advice. But big businesses can’t fix this issue by themselves, so it’s also very important for the EU to act and to show their understanding of the needs of the small players.
On the behalf of the industry committee, Henna Virkkunen MEP believes that speaking of recovery, they should highlight the role of SME’s much more than they do now. She also states that small businesses need to be equipped with both digital and also climate transistors in the future, because now we have seen how the lack of, for example, digital competencies has been a huge challenge for them. They have been forced to take big digital leaps forward in a very short period of time and in uncertain circumstances, which was a very difficult and costly transition. In conclusion, she says that the industry committee will now focus on making sure to have the right instruments and possibilities to support SMEs’ digitalization and the transition towards climate neutrality in the MFF and the recovery plan. SME’s also need more investments in innovation, education and the improvement of core skills.
Speaking for Amazon, Markus Schöberl states that their company is not just a retailer, but a group of different divisions and services that extensively partner with SMEs (ex. Logistics partners, web services, kindle authors, many sub-stores and others). A really important factor is Amazon’s selling service which invites independent third-party companies to also sell their products on the very same website, and now about 50% of the sales on Amazon are made by these independent sellers. This means that their marketplace is a very extensive partnership with tens of thousands of small and medium-sized businesses. The availability of these marketplaces was really important for a big number of SMEs not to get hit so hard by the pandemic even though it was really challenging for Amazon to keep their operations up and running. Amazon is really trying to facilitate the single market vision through not only the websites and the traffic, meaning the customers that are shopping on those websites, but also through physical infrastructure like the hundreds of fulfillment centers in the various countries. It’s a win-win both for sellers and customers, because customers appreciate the larger assortment through the 3rd party sellers, and the sellers can benefit from getting access to those millions of customers, all of which contributes to the success of Amazon at the same time. Besides this, firstly, they have launched many programs on their website for certain SME subgroups. Secondly, they have made many external partnerships, which also helps SMEs a lot.
Julian Cacchioli also supports the belief that SMEs and the entrepreneurs behind them are the lifeblood of any economy and that it’s important to create the environment for them to thrive. He brings up 4 points:
- The research and development sector within the food and nutrition industry is so packed with innovative SMEs, but they can’t make those innovations come true because of the incomprehensive policymaking.
- Training and development is very important for SMEs.
- Support from big businesses in the marketing area is often crucial for SMEs
- Since SMEs drive the innovation, large companies have to follow and stay in touch with them and not the other way around.
Julian states that Herbalife Nutrition is making substantial efforts to address these aspects.
Johannes Nitschke shares what Siemens has been doing to support SMEs in various sectors;
- They have opened their 3D printing platform to hospitals and medical organizations because there was a drastic shortage of medical supplies;
- They support the food and beverage sector with the help of digitalization to make the production lines much more flexible and resilient;
- They launched a booklet on cybersecurity education aimed at SME’
Svenja Hahn MEP, as a lawmaker from the European Parliament, supports the thought that there is a need to anchorage private corporation initiatives, create the right political framework for SMEs and reduce bureaucratic burdens. They want to legislate on new technology in a way that avoids red tape and high costs for businesses and also give the framework that fosters innovation with a technologically open legislation.
Ondrej Kovarik suggests to SMEs and other stakeholders that one of the areas where COVID-19 would work as a catalyst as well is building partnership between the public and the private sphere. He says that it’s very important to have a platform, an opportunity to exchange, discuss and debate information between the business environment and the policymakers.