Challenges for SMEs in Tyrol and South Tyrol
Small and medium-sized enterprises (SMEs) are the backbone of the South Tyrolean and Tyrolean economy. With the present study - a joint project of the "Netzwerk regionale Wirtschaftsforschung Tirol-Südtirol" - the following questions should be clarified: What problems and needs do SMEs have? What economic policy support is necessary? Essential structural information on SMEs can be obtained from the business location censuses. An analysis of the scientific literature on SMEs provides the framework and specifications for the empirical survey, which was carried out in Tyrol by the Economic Department of the Tyrolean Chamber of Commerce on 391 small and medium-sized enterprises in Tyrol and in South Tyrol on 687 South Tyrolean companies by the IER - Institute for Economic Research of the Chamber of Commerce of Bolzano. In a postal survey the SMEs were asked about their problems and wishes. What the South Tyrolean and Tyrolean economy have in common, is the dominance of the micro (0 to 9 employees), small (10 to 49 employees) and medium-sized enterprises (50 to 249 employees) in the total number of enterprises (over 99%), an even distribution of the economic sectors and consistently low unemployment rates. However, the average size of enterprises in Tyrol, with 7.4 employees per establishment, is significantly higher than in South Tyrol (4.1). From the scientific literature no general superiority of larger companies compared to smaller companies can be identified.
−
−
−
SMEs create more jobs than larger companies, also in the course of start-ups. However, many jobs are lost due to (partly unnecessary) closures. SMEs cannot achieve positive economies of scale in production like large enterprises. On the other hand, they increase production efficiency through their flexible structure. If the degree of innovation is measured in terms of the extent of basic research (use for R&D, number of patents), the large firms clearly lead the field. When it comes to developing new products and services, however, small firms are at least as good as large ones.
Even though the majority of SMEs in South Tyrol and Tyrol consider the change in the political and economic framework conditions to be "stable", some problem areas are noticeable. The Tyrolean and South Tyrolean companies find it equally difficult to cope with the high tax burden, the heavy burden of bureaucracy and the lack of sufficient qualified personnel. These are also the areas where improvements are most desired and directed towards economic policy. Other problem areas are less pressing, but there are also differences within SMEs. For example, micro-enterprises face financial difficulties and access to new finance more often than larger enterprises.
Many SMEs (larger ones, stronger than smaller ones) are convinced of the importance of strategic corporate management, operational controlling and cooperation. To ensure their competitiveness, SMEs are proposing that efforts in the area of innovation and product improvement should be (further) strengthened. Conclusions The following strategies are essential for smaller companies in order to avoid size-related disadvantages: −
−
−
−
− −
Cooperation with other companies in the field of R&D and production as well as contact with other research institutions (technology transfer, etc.) could improve innovation capacity and hence productivity. By increasing the awareness of the importance of early succession planning, unnecessary closures and job losses could be avoided. Where necessary, mergers should also be supported. Increased use of controlling instruments and more initiatives in the area of risk capital (also through public participation) could ease the financing problems of SMEs (also with regard to Basel 2). Where necessary, companies should be supported. New concepts in e-government and greater predictability of economic policy could reduce the bureaucratic burden for businesses. At least beyond a given company size, systematic efforts must be made to attract foreign business as well. Better communication and transparency of funding opportunities would enable companies to benefit better from economic development.
Special attention should be paid to micro-enterprises, as they guarantee enormous economic stability. However, certain services cannot be provided internally, such as controlling. Therefore, it is important that the micro-companies have the opportunity to purchase standard services from outside at a favourable price.