ARTICLE27 February 2019

SME-companies in the digital economy

There are 24 million small and mid-sized businesses, so called SME businesses, in Europe. These companies are a great ‚Äď if not the greatest ‚Äď asset when it comes to tackling todays economical and social challenges.

BusinessEurope
Photo: BusinessEurope

The vice president of the Confederation of Swedish Enterprise and president of Uniguide, Anna-Lena Bohm, is also the chairman of BusinessEuropes SMEs and Entrepreneurship committee. February 19 BusinessEurope arranged a seminar in Brussels on the subject of what SME companies can and should expect from the upcoming EU SME-policy.

BusinessEurope states that small and midsized businesses need the opportunity to work in a modern legal and administrative environment. The inner market needs to be more accessible for these companies, and they need help to do business outside the EU and take better advantage of the free trade agreements. The SME companies need an easier way to find financing, fine tune their innovations and find both talents and external advice. And of course it’s important to be able to take advantage of the digitalisation process, which is what Anna-Lena Bohm dedicated her speech to.

Seen to today’s trends it is obvious that a large part of the future economic growth will be coming from digitalisation. It can give smaller companies the opportunity to act on a larger market, which can in turn be opened up and create opportunity for both innovation and commercialisation.

But thought this development seems bright, it might need a helping hand.

‚Äď First of all it will take better regulation to protect the competitiveness that is a consequence of the market economy. Smaller companies have more issues with complicated and time consuming regulation; there is a risk that they simply find an expansion too complicated to go through with. Therefore the regulatory framework needs to be stable, technology neutral and predictable. A good regulatory framework, on the other hand, will give businesses even better opportunities. It should be as easy to sell a product in the whole EU as it is to sell it in the native country.

European traders face 28 different sets consumer rules, ranging from legal warranty period to rules on the recognition on goods. It takes a lot of time and money for a company who wants to take advantage of the single market.

‚Äď The key word is harmonisation and simplification. Harmonisation of consumer rules, payment solutions, certifications and so on to apply to the whole single market. Simplification of the information duty is absolutely necessary; today an e-retailer needs to leave 39 points of pre-purchase information for a purchase.

Access to the data itself is crucial, not in the least for the tourist industry, hotels and platforms, and retail. When access is limited a hotel might lose access to information and knowledge about their customers and their behaviour, which makes it harder to create new offers.

‚Äď This is also a bigger problem for the smaller companies than the very large ones, and once again EU regulations contribute to an imbalance of the market. This must be dealt with to give SME companies the opportunity to reach their full potential.

Digitalisation and a top quality infrastructure for data communication go hand in hand. Here too there is room for improvement, not in the least concerning speed and bandwidth. EU should focus serious effort in this area if we are to be able to compete against the rest of the world. But here too it is important not to overregulate, warns Anna-Lena Bohm.

‚Äď We need to let principles such as transparency, non-discrimination, consumer choice and interoperability guide us and only regulate when and where the EU competition rules fail to prevent monopolies or when the marker forces are put out of play. We need to create conditions where all companies can compete on equal terms. If we handle the digitalisation process correctly it will be an enormous success factor for European small and midsized businesses. If we don‚Äôt we‚Äôll soon be taken over by our competitors.

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Contact our EU Office

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Publisher and editor-in-chief Anna Dalqvist