ECONOMY

The truth must be told to small and medium-sized enterprises

Since the 1980s all prime ministers and ministers have flattered small and medium-sized enterprises (SMEs), clearly because they are numerous and since it is not sensible for politicians to praise big-time entrepreneurs. This government, despite its pledges, has only managed to boost tax evasion by the SMEs and, due to its strict program of fiscal adjustment, to aggravate inactivity in the market. It is time the flattery ended and ministers told the truth to SME owners, making commitments about immediate solutions to problems. In the presentation of an Institute for Economic and Industrial Research (IOBE) survey «on SME competitiveness» at the Athens Chamber of Trade and Industry, Development Minister Dimitris Sioufas asked SMEs to become more active, but told no truths. SMEs suffer from low competitiveness, not in prices but in quality. The IOBE survey noted that «the main competitive advantage of SMEs is the quality of services and products offered to customers, while their prices are the third-greatest competitive advantage.» True, Greek enterprises make cheap products of low quality, getting swept away by foreign competition in products from cheap labor states. Even in services we are more expensive and worse in quality than other European SMEs. Greek SMEs lack quality in products and services because that means high technology, innovation and state guidance. «The utilization of community and national programs of technological development and training applies only to 3 percent of Greek SMEs compared to 20 percent in Europe,» the survey found. So, Minister, for SMEs to become extroverted and competitive you must include them in development programs and compel them toward innovations; a project only specialist institutes can undertake and complete. Sioufas asked SME owners to operate aggressively, using their comparative advantages: flexibility and adaptability. Yet if companies are to become aggressive they need more weapons, while flexibility is only theoretical as no manufacturer can work well within the bureaucratic environment of state companies. The survey confirmed that Greek SMEs’ competitiveness is low compared to the rest of Europe due to poor business climate conditions, the structure of a Greek economy oriented toward traditional manufacturing activities of low specialization and little added value, and insufficient legislation. It showed that only one in four SMEs in Greece adopt an aggressive strategy, through technological upgrading of products, production, and promotion of new products in the market, when one in two European SMEs react aggressively to a change in sales through upgrading productive activity. National Bank of Greece President Takis Arapoglou has said that most SMEs are uncompetitive and must reform or close. Since the government must tell the truth, it should tell SME owners their stores cannot be open just 72 hours per week in Athens (50 hours outside the capital), when in Spain they work for 90 hours and in Portugal 126 hours.