The role of SMEs: opportunities and challenges Dr. Juan Tugores Universitat de Barcelona EC-DGEUP Seminar, March 13th, 2014

Towards a solid foundation of the recovery: the role of SMEs Quantitative and qualitative role Strategic role: complementarity – not contraposition – between competitiveness and social cohesion Hidden champions (Mittelstand) Extensive margin Innovation, creativity, productivity: a “gaudinian” approach: manuservices

It’s not a social problem but a crucial economic/efficiency issue! G20, communiqué, February 22-23, 2014: “a climate that facilitates higher investment, particularly in infrastructure and small and medium enterprises” (point 7) EC, Communication, on the prevention and correction of macroeconomic imbalances, March 5th 2014: “...foster the flow of credit to the real economy, particularly to SMEs...”

Hidden champions (Levitt, Simon): a wide(r) interpretation The role of Mittelstand: a solid and extensive network of firms: foundation of competitiveness but also of social cohesion and a “way of life”, a sense of community. Hidden champions (versus…or not) National champions: differences in strategic – economic and sociopolitical – priorities Connection with the European model (complementarity among economic progress, political democracy and social welfare)

Margins: the extensive agenda Source: Fontagné et al. (EFIGE)

Size: “Second level” Source: EFIGE Report (2, 2011)

Quality Quality ladders as a key dimension in global competition Productivity: a main challenge, of course, but a poliedric one: a)Technological issue; b) Creativity issues: “discovery”, “creation” (not only “adaptation” to the changing rules of global consumers A “Gaudianian mix”

Problems Presence in the political process of decision-making Access to credit: availability and cost, especially in Southern Europe Overcoming the costs of access to foreign markets: role of public-private cooperation

Discrimination in finance Source: IMF, GFSR, October 2013

Fragmentation...against SMEs (IMF, Febr 20, 2014)

Better environment… Financial System: efficient transfer of savings to productive uses Complementarities: an essential role for SMEs…in a essential question for the European socioeconomic model. Not only social but also efficiency! Classic and alternative financial mechanisms