Main focus of the present analysis is on the situation of the SME sector under the conditions of economic crisis today. The key research question is: What is the connection between competitiveness factors and capability of the enterprises to cope with the crisis?
The analysis is focused on selected key factors for sustainable development and competitiveness, namely internationalization, innovation, patents activity, best practices, access to finance, and introduction of standards,. For each of these factors, an index, measuring level of factor development within each enterprise is constructed and calculated on the basis of 300 Bulgarian SMEs Survey at the beginning 2011. These indexes provide for comparisons and evaluation of connections between competitiveness factors and economic performance of firms through econometric modeling.
The estimation results clearly shows the sustainability among different groups of enterprises during the crisis: compared to all other SMEs the enterprises with greater access to financing and well established good management practices have undergone less negative effects in terms of personnel cuts, loan repayments, and reductions in turnover and profits. Vice versa, the enterprises with a more limited access to finance and less developed good managerial practices incurred negative effects in a larger scale.
An interesting observation in the times of crisis is that the survival of SMEs in current crisis conditions depends mainly on the accumulated human capital. Experiencing difficult access to financing, high intercompany indebtedness and considerably reduced sales (both domestically and internationally), the successful short-term business strategy includes predominantly efficient utilization of available human capital.
The innovative activities and the internationalization, which are the fundament of the medium-term success of enterprises, cannot lead to an immediate improvement in the turnovers (which are extremely important in the times of crisis). Hence, we observe unwelcome cancellation of investment plans and increased personnel layoffs in the innovative and internationalized enterprises. This phenomenon is a significant obstacle for the post-crisis business recovery, because exactly the innovative firms can be the engine for SMEs sector growth. Therefore, we can identify two major approaches for policy intervention: short-term policy measures aiming at facilitating access to finance of the enterprises, and medium and long-run policy measures targeting companies’ practices leading to the human capital increase and improvement, as well as supporting the innovation and internationalization activities.
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Датум:
02.07.2011.
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