Small and medium-sized enterprises (SMEs) are the backbone of Europe’s economy. They represent over 90% of all businesses in the EU. They employ around 100 million people, account for more than half of Europe’s GDP and play a key role in adding value in every sector of the economy. SMEs bring innovative solutions to challenges like climate change, resource efficiency and social cohesion, and help spread this innovation throughout Europe.
SMEs have been at the front line of the economic shock caused by the COVID-19 pandemic. In early surveys, over 50% of SMEs indicated that they could be out of business within the next few months. Since then, many have gone bankrupt. And Brexit will provide more uncertainty for business, regardless of whether there is a deal or not. With many SMEs in its ecosystem, ‘food and drink’ is a sector especially hard hit by the crisis. The sector’s SMEs are looking at how EU policies, such as the Farm to Fork Strategy, can help them.
SMEs have generally less resilience and flexibility than larger companies in dealing with the costs these shocks entail. Costs for prevention as well as changes in work processes, such as the shift to teleworking, may be relatively higher for SMEs given their smaller size, but also, in other instances, the low level of digitalisation and difficulties in accessing and adopting technologies.
The European Commission has made liquidity measures available to support SMEs. It also responded to the COVID-crisis with the new SME Strategy for a sustainable and digital Europe. The SME Strategy aims to considerably increase the number of SMEs engaging in sustainable business practices as well as those employing digital technologies.
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2020 - The 'perfect storm' for Europe's SMEs?
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