Private Sector Partnerships – a Missing Key to an Effectual EU SME Strategy

Digitalization of Europe’s SMEs is making progress – just far too slow. Clear time limits must be laid down and best practices put to use. The EU SME Strategy aims to boost digitalization of European industry with a special attention to the traditional sectors, SMEs, and regional disparities; by mobilizing existing instruments along with the latest undertakings. At the same time, the active involvement of the entire business community and companies themselves will be key to reaching Europe’s bold objectives on the digital front. For example, making large business players part of the solution, will help small firms play bigger roles. Private sector initiatives could be combined with the efforts of the European Union to ensure an efficient, target led approach and prepare European businesses to navigate and lead in the digital era.

Moderated by HORST HEITZ, Chair European Steering Board, SME Connect, the Virtual Meeting saw such high-level speakers such as JOSIANNE CUTAJAR MEP, ITRE & TRAN Committees S&D Group Shadow Rapporteur for the ITRE Committee on the European SME Strategy SME Connect Board Member; MARKUS DIEKMANN, CEO Rose Bikes; Founder Händler helfen Händler Initiative; Co-founder Quickstart Online; PHILLIP MALLOCH, Director Economic and Social Policy, Facebook; MANUEL MAS, Founder & CEO; ULRIKE DOMANY-FUNTAN Secretary General Fit4internet – Member Digital Skills & Jobs Coalition of the European Commission; SEAN KELLY MEP, ITRE & INTA Committees EPP Group Shadow Rapporteur for the INTA Committee on the European SME Strategy SME Connect Board Member; ISABEL BENJUMEA BENJUMEA MEP, Vice-Chair REGI Committee, ECON Committee EPP Group Shadow Rapporteur for the REGI Committee on the New Industrial Strategy for Europe SME Europe of the EPP Board Member.

In her opening speech, JOSIANNE CUTAJAR MEP points out the great importance of paying attention and supporting SMEs in the long term as well, since they make a vital contribution to the economic development and are of strategic interest for our economy.  In particular, she believes that the digitalization of SMEs will be key to enhance European competitiveness. The problem is that many small and medium enterprises are left behind, which creates a huge gap between them and more developed companies in terms digital competences, skill and knowledge. It’s very important to fill this gap so that SMEs are fully aware of all the opportunities, or in other words, maintain a level playing field. One way to do this is to develop and strengthen the public-private and private-private sector partnerships, in that way we won’t have to reinvent, but just collaborate and share the knowledge and data in different areas to make sure that the data isn’t concentrated in the hands of the big tech companies. Collaboration and partnerships can be used as a useful framework to make the regulation fit for SME needs as well as to accelerate digital transformation. The private sector, if adequately involved can complement the efforts made by public institutions. They can also help in making research and innovation funding efficient across the EU by sharing financial, human and infrastructure resources.

MARKUS DIEKMANN makes a point by saying that the most important thing in being a successful business is the skill to make changes in the company really quick. He takes his company Rose bikes as an example: they are very fast in networking, fast in learning from other successful companies and they’re fast in implementing changes, which makes them very flexible and resilient. The support of the commission is very important here because it needs to help SMEs implement new business models and become more modern more quickly. He also brings up a platform that he uses which lets a number of businesses share their experiences and knowledge, it lets them communicate in order to solve different problems which arise quickly. Markus believes that “the knowledge is there, we just have to know how to use and implement it correctly”, and SMEs have to be aware of such platforms and help each other and solve problems by simply communicating.

On the behalf of Facebook, PHILLIP MALLOCH completely agrees with the statements made by the previous speakers and points out that Facebook is a hugely powerful spur to digital inclusion, innovative market entry and SME competitiveness. He explains how it’s one of those platforms, mentioned earlier that enables people to communicate, to help and build businesses on a daily basis across Europe. Facebook is very supportive of the SME strategy, so they have created numerous useful tools for the use of SMEs and have done everything during the pandemic to support small businesses, make it easier to sell online, reach new customers and generate revenue.

MANUEL MAS also brings up some quite important points that the EU should take to account based on the experience of his own company that sells carpets in Spain. Manuel thinks that one of the biggest problems which SMEs face is the lack of appropriate education, in particular the lack of digital competences and knowledge among employees and the entrepreneurs themselves, since nobody is taught these skills. As an example, his company even educates and helps their suppliers with digitalization, since they can’t keep up. Besides this, SMEs need to learn how to use and analyze their data wisely to improve both product and processes, they need to learn how to take advantage of all the opportunities that they are given. He also encourages SMEs to learn from the larger companies, in that way they can find a balance in order to be able to grow and at the same time to draw lessons from the experience of the biggest players on the market. Another factor that could imply growth for small companies is making the bureaucratic process simpler, so that managers of SMEs could start running their businesses without having to learn and to stop their process every time there is a form to fill.

ULRIKE DOMANY-FUNTAN, once again, speaks about the severity of the problem that revolves around the lack of digital competences in different areas. Then, she introduces her project, which is focused to tackle this problem in Austria by upskilling the citizens. For example, they work with the Austrian military service, where they do assessments in the recruiting process to find out the current level of digital skills. If they find out that the level isn’t high enough, they will do a tailored upskilling of digital competences during military service. The project also works with certain regions in Austria, since there are some economically weak areas that lack workers with advanced digital knowledge. They get in touch with public institutions to figure out what kind of upskilling programs they can tailor to strengthen the economy. Ulrike proves that such organized and precisely structured projects can be of great use in order to educate and digitalize SMEs as well.

SEAN KELLY MEP completely supports the points made by the speakers regarding the significance of digitalization and change in the bureaucratic system. He suggests the policymakers to think about this and come up with frameworks within Europe both from a regulatory but also from a supportive point of view. Since its impossible to advance without digital competences, the private sector has to be utilized much more often in order to strengthen the digital skills of citizens, especially in schools and educational establishments.

In conclusion, ISABEL BENJUMEA BENJUMEA MEP brings up an interesting thought, she thinks that the public sector has to let professionals from private sectors provide the services instead of trying to implement their own programs that simply aren’t good enough, wasting vast amounts of resources while barely earning any profit. What comes out of this is that public money needs to be invested in private sector companies that are delivering new technologies and training programs. People have to be taught from young age that becoming an entrepreneur is equally as significant and important as becoming a doctor, for example. Accordingly, they also have to be well educated in this area.