[Economics]Rain of euros to observe the growth of SMEs

[#Wittels-]

The EU funds represent a great opportunity to tackle two endemic problems of a large part of the Spanish business fabric: its difficulties in gaining size and the lack of digitization. They pave the way for companies with fewer than 50 workers to play a leading role in the economic recovery

 

The word is used too widely, but in this case it is inescapable: May 28, 2021 was a historic day. The 27 countries of the European Union agreed to put their wills and reputations together to obtain and invest 800,000 million euros with a clear objective: that coming out of the brutal recession caused by the covid pandemic was an opportunity to modernize the continent, solving its deficiencies and allowing it to maintain its role as a great economic power in a world that changes rapidly and whose focus moves from the Atlantic to the Pacific. But from the dreams of Brussels we must move on to the realities of Irun, Vigo or Arrecife: convert European manna into real jobs, real companies, real social and ecological changes. And that is only possible if it is supported by small and medium-sized companies. It is to discuss this historic opportunity that EL PAÍS, sponsored by Sabadell and the Spanish Chamber of Commerce and in collaboration with the Ministry of Economic Affairs and Digital Transformation, is organizing a meeting in Madrid this week.

 

Without a base of small businesses, no great economy can develop, as Lorenzo Amor, president of the National Federation of Self-Employed Workers Associations (ATA), explains. “Spain is a country where companies work in a network. Hundreds of SMEs and thousands of freelancers hang from each large company. "SMEs and the self-employed have to play a leading role," says Vice President Nadia Calviño.

 

And that includes incorporating them into large planes powered by European funds. "In the PERTE [Strategic Projects for Economic Recovery and Transformation], SMEs play a fundamental role," Calviño points out. “Both in those that are already underway, such as the automobile, the agri-food industry, and energy storage and green hydrogen, as well as the upcoming Artificial Intelligence, circular economy, and naval and space industries. Within the PERTE of the electric and connected vehicle, it is required that in the projects presented there be 40% SMEs. In some calls it is a requirement, in others it gives points”.

 

But ensuring the success of small businesses on these big planes takes more than just regulations. Structural reforms are a demand from Brussels. “There is labor, pensions, but as much or more, the reform of the bureaucracy, the promotion of the startup ecosystem, the bankruptcy reform, with the second chance law, are important,” Calviño lists. "It's about creating a regulatory environment that favors the business climate." Another challenge, according to the minister, is “the recapitalization and modernization of the Spanish public administration”. "We must put the 060 at the service of SMEs and entrepreneurs," he says.

There are high hopes pinned on the power of the internet. "The economic recovery can only be seen in a digital key," considers Carme Artigas, Secretary of State for Digitization and Artificial Intelligence. “The digital economy is now 22% of GDP. We want it to be 40% by 2025”. But to achieve this goal it is essential to integrate SMEs. "The lack of digitization and the lack of digital training hampers us as a country, hampers our competitiveness." And although on a website companies are more equal to each other than on the street, the pandemic has revealed that, in practice, this is not the case. “Digital commerce grew 50% during the pandemic; that of SMEs did so by 9%”, says Artigas. "Thousands of freelancers participate in a program in which a telecommunications company participates," explains Amor. "There is talk of Wi-Fi in the villages, but who installs it?"

 

The digital kit, a package of aid for the digitization of companies, has the potential to be a tool to make this qualitative leap. "It is an instrument at the service of competitiveness," says Inmaculada Riera, general director of the Spanish Chamber of Commerce. But the internet is a means, not an end, as Amor makes clear: “The digital kit should not be just that. We must take advantage to train, maintain and strengthen the self-employed within that space”. “It is not enough to provide service companies, they must be trained, guided and networked”, confirms Calviño.

 

Voices that ask for realism
All this is very nice, but there are voices that ask for more realism. Many Spanish companies are going to be left out because the sectors in which they operate do not fit with the lines along which the European Commission wants to develop economic recovery. The result, in the words of Amor, is that "the funds have not reached the self-employed, a large part of the business fabric." "It is essential that the aid reaches the reality of the SME", considers Luis Aribayos, general secretary of the Spanish Confederation of Small and Medium Enterprises (Cepyme). “Two out of three small companies do not believe that they receive money from European aid. Many SMEs struggle to survive. And funds are a perishable product: if they are not distributed they will rot. We need to change the perception and invest in distribution.”

 

How to get money from the hands of the state to the needs of small businesses is possibly the biggest challenge of all. ”Financial institutions play a key role, first because of co-financing and the solutions we can provide, but also because of the knowledge part: what we know about companies, capillarity and also the ability to screen projects so that they go further” , points out Albert Figueras, deputy general manager and director of Companies, Businesses and the Self-Employed at Banco Sabadell. “We need the collaboration of the financial system”, considers Amor.

 

Link: https://elpais.com/economia/2022-02-21/lluvia-de-euros-para-regar-el-crecimiento-de-las-pymes.html