2021 – What challenges and opportunities are ahead for European SMEs?

The COVID-19 crisis has severely hit SMEs across Europe, many of which risk being swept out of business in its wake. While the impact of the crisis depends on the sector in which the SME operate and on the restrictions and financial support of the Member State, COVID19 continues to pose uncertainty to all. There is a clear risk that many SMEs lost due to this pandemic will be lost for good.

But as SMEs maintain a pivotal role in Europe's society and economy they cannot fail. Rather, they need to remain a springboard to success for people with low income and therefore contribute to poverty reduction and job creation, as 2 out of 3 new jobs are in SMEs and as they contribute to more than 50 % of European GDP.

The topic was discussed at the EESC SME, Crafts and Family Business Category meeting on 17 February. MEP Angelika Winzig, Co-Chair of the EP Intergroup on SMEs, Véronique Willems, Secretary General of SMEunited and Daniele Olivieri, Senior Advisor on Entrepreneurship and SMEs from BusinessEurope joined Employers' Group President Stefano Mallia, Diversity Europe President Séamus Boland and the newly elected SME Category Spokesperson Ms De Felipe Lehtonen to discuss the outlook for SMEs in 2021.

Central points to help SMEs through the challenges of 2021 are:

  • To successfully manage the twin transition, SMEs need an encouraging investment environment with subsidies, also for research and development. Furthermore, skill development is a key issue, e.g. through enhancing the number of STEM graduates.
  • Money needs to reach SMEs in a fast and reliable way. For a successful implementation and allocation of the Recovery and Resilience Facility, a cooperation of regional, national and European actors is crucial.
  • The continuing uncertainty posed by COVID19 leads to solvency-issues and thereby a lowered investment capacity for SMEs. Creative solutions need to be found to tackle the over-indebtedness of banks and give SMEs security.
  • An SME envoy with a strong position on the European level is needed, while staying in close contact with national organisations.
  • In all fields, SME-friendly policy making has to become the norm to help SMEs survive and recover from the COVID19 pandemic. This also includes taking into account the relatively higher burden that enhanced bureaucracy and costs pose on SMEs.

The conclusions were clear: In order to turn pandemic-driven challenges into opportunities, Europe needs an encouraging investment climate for SMEs. The 27-country bloc will only be able to recover from the COVID19 crisis, if it manages to help its SMEs to survive, recover and rebuild a more vibrant economy.