Small and medium-sized enterprises play an important role for sustainable growth in Europe
Press Release from 2015-10-12 / Group
- KfW investigates SME sector in Germany, France, Italy and Spain as part of a joint study with promotional banks BPI, CDP and ICO
- Consequences of the financial and economic crisis still being felt by SMEs in Europe's four largest economies
- Weak levels of investment and innovation putting Europe's ability to compete in the future at risk
- National promotional banks playing an important role in efforts to overcome specific challenges in each country
Despite the different structural characteristics and framework economic conditions in each country, small and medium-sized enterprises (SMEs) are a central driving force for sustainable growth in Europe. According to a joint study conducted by the European promotional banks KfW, BPI, CDP and ICO, there were more than 13 million SMEs in Germany, France, Italy and Spain in 2013. SMEs make up more than 98% of all companies, employ more than half of the total workforce and make a substantial contribution to value creation in those countries.
In France, Spain and Italy in particular, SMEs appeared particularly vulnerable to the financial and economic crisis and are still suffering from its consequences. Many SMEs in those countries have significantly scaled back their investment and innovation activities due to the deterioration of their business prospects and persistent difficulties with financing. Investment and innovation by SMEs are also still far below their pre-crisis levels in Germany. While more than 36% of all SMEs introduced innovations in the years 2006 to 2008, between 2011 and 2013 the figure was less than 26%.
At the same time, the study makes it clear that European SMEs can only compete internationally on the basis of quality and innovation. The progress of digitalisation, the anticipated increase in energy costs and an ageing population represent substantial challenges, but also opportunities for companies. More investment and innovation is required from SMEs in order to take advantage of these opportunities and remain competitive in the long term.
Dr Jörg Zeuner, KfW's Chief Economist, said “The findings of this study make it clear that European initiatives such as the Juncker plan need to be complemented by targeted national measures for SMEs. This is the best way to take into account and overcome the structural differences in the various markets and the specific challenges faced in each country. National promotional banks such as BPI (France), CDP (Italy), ICO (Spain) and KfW can offer support in this respect with tailored financing instruments. They have successfully developed solutions for SMEs in their respective markets, and are in close contact in order to benefit from the experience of their European partners. In Germany, we will have to redouble our efforts to address the topics of innovation, corporate succession and business start-ups in particular.”