Archives For Eurozone

SMEsBy Rosana Mirkovic, head of SME policy, ACCA

What never ceases to surprise us here in the SME Team, is how similar small business issues are, no matter which country or region we go to.

Take access to finance as an example – lack of collateral, appropriate good governance and risk management, as well as the skills of owner managers themselves are more than likely to be brought up in the discussions whether they are taking place in Africa, Asia or Europe. It seems that SMEs across the world have many things in common and unfortunately most of these are likely to be problems.

However, on my recent visit to Cambodia and Vietnam where I took part in a series of events and meetings organised by ACCA offices in Hanoi, Ho Chi Minh City and Phnom Penh, I learnt something new. Export is actually a major source of SMEs’ economic contribution in these fast growing and open economies and this was not only apparent in the figures, but in the culture and the whole business ecosystem in which small business owners operate.

Here in Europe, we talk of exporting and SMEs as something marred with problems and actually quite a difficult proposition for small businesses. In Asia on the other hand, while SMEs are under acute pressure concerning demand, inflation and currency fluctuations, exporting itself is something that they see as business as usual.

Furthermore, it wasn’t just the business owners who seemed comfortable with the idea but also many of the key institutions that small businesses rely on – most surprisingly of all, banks. While over in the UK, financial products such as FX forwards, import documentary credit or foreign currency receivables financing are rarely marketed to small businesses, in Vietnam banks see this is as their key commercial advantage and advertise exactly this in their general SME marketing collateral, whereas in Europe, we are likely to view these products as rather niche. This made me think how far away we are in Europe from seeing SME exporting in this way, and it also made me wonder how much of this is actually tied to culture rather than actual practice.

This brings me to another interesting difference.  Opportunities for SMEs that will be created by the ASEAN integration were never far from the discussions. While many commentators doubt that the regional economic community will come together in time for 2015, the region is still heading firmly in that direction and SMEs are already discussing how they can be ready to make the most of opening up of regional trade.

At a time when the Eurozone is facing so much challenge and doubt in terms of its future, it was quite refreshing to spend some time in a region that is working on coming together and looking ahead to the economic potential that this represents.

Refreshing… but also depressing to come back to a Europe looking in the other direction…

XXII Economic Forum in Poland

accapr —  18 September 2012 — Leave a comment

By Rosana Mirkovic, head of SME policy, ACCA

Between 4 to 6 September European politicians and business leaders gathered at the 22nd Economic Forum in the spa resort town of Krynica Zdrój, southern Poland.

Under the title ‘New Visions for Hard Times – Europe and the World Confronting the Crisis’, leaders discussed current models of integration, the economic system, and the substantial reforms required to tackle the on-going economic crisis. Much of the debate was dedicated to the competitiveness of the region and how its businesses can make greater impact on the global stage.

And as the title suggests, this was a high level gathering, attracting regional heads of state, international organisations and the major regional and global business leaders. Most impressively, there was a feeling of a genuine need for the government, business and the NGO sector to work together to address some of the socio-economic problems that remain, despite the remarkable period of transition the region has witnessed. With such a rich audience, the programme provided a similar tapestry of topics; from health, pensions and the ageing Europe, to future energy sources, technological innovations and the social media.

Inevitably, with the Forum’s host being so close to the Eurozone (currently expected to join the Euro in January 2016), the various angles on the Eurozone crisis were debated at length.

I was pleased to take part in a PwC panel debate ‘CEE Goes Global – the Expansion of Foreign Companies in Central and Eastern Europe’, which discussed the chances and the perspectives of the private entrepreneurs with their efforts to expand abroad and the obstacles they have to overcome in order to conquer new markets. The panel also debated the importance of such enterprises for the growth of their home regions and national economies. With larger corporations usually dominating such gatherings, it was especially pleasing to see that smaller, growing businesses were recognised for their dynamism and their increasing presence in international trade.

There was agreement among the panel that while national governments are keen to help the SME sector internationalise, their efforts tend to be mis-directed. The participants, who included presidents of boards of some of the major Polish exporting firms, agreed that government actions ought to be targeted towards making trade easier and less costly and removing barriers to growth and innovation. Other than that, there was reluctance to promote further state interference, and a real sense that entrepreneurs simply need to be left alone to do what they know best. Most interestingly, the extent to which the international expansion of Polish companies benefits the national economy, and as such warrant government support, was raised a number of times – as well as the effect of the country’s branding in boosting the international prospects of its companies. It’s difficult to imagine that either of the questions would be asked if a similar event was held in the UK, for example.

The overwhelming sentiment to note from the Forum however is the general optimism about the region’s future. Having witnessed moderate but steady growth throughout the economic downturn, some degree of retrospection was a common thread that tied together much of the conference’s programme, showing how far the region has come and most importantly, the role of business in opening up the region’s potential and cooperation even further.