Porto Business School, in partnership with Fórum de Gestores e Administradores de Empresas (FAE), welcomed the presentation session of the World Economic Forum Report on European SMEs and their role for a more sustainable and prosper.
Porto Business School and the Faculty of Economics of University of Porto were ranked with the “4 Palms of Excellence” in the most recent edition of the well-known Business School Ranking, an initiative of Eduniversal agency, which recognizes every year the one thousand best business schools worldwide.
On November 22, Olivier Woeffray, Manager Global Future Council on Innovation Ecosystems, World Economic Forum (WEF), was invited by the Fórum de Gestores e Administradores de Empresas to share some of the conclusions of the report “Future Readiness of SMEs: Mobilizing the SME Sector to Drive Widespread Sustainability and Prosperity”, launched on December, 1.
SMEs represent more than 90% of the global business universe and promote social mobility; out of 10 jobs, 7 are created by SMEs. Analyzed separately, SMEs are considered of low relevance, but Olivier Woeffray advances that, in Portugal and in the world, “collectively SMEs represent most of the economy”.
According to the report, SMEs tend to face a higher index of bankruptcy, in particularly, in its initial stage. The pressure from the clients and civil society SMEs deal within the field of sustainability is also higher. And the pandemic amplified the challenges to which SMEs are already exposed.
Future readiness comprehends three vectors. Firstly, it is important that the company prospers (economic growth). Secondly, it is important to do good and do the good (social impact). Thirdly, and most important, is the concept of adaptability. These last two years have been a unique example of how vital this skill is, which cover two dimensions: ability (absorb the impact) and agility (seize opportunities).
More than 350 CEO and founders participate in surveys, workshops, and discussions forums for this report. The data indicate the existence of three drivers of future readiness: business models, whose relevance within the level of SME’s readiness is as high as its flexibility; orientation, which is the Organization’s culture and style; and collaborative networks, which foster the companies’ capacity of create and be a part of networks through which they mobilize resources.
What do the data tell us?
Olivier Woeffray highlights the report covers the main regions of the world. And within this perspective of equal opportunities, Woeffrat considers “SMEs are not favored or disfavored for its geographic location”.
Many of the companies do not include in their business model well-defined strategies focused on environmental and social sustainability. We are living a time of recovery and a many of the companies are still operating in survival mode. In this level of survival, the company cannot move to the next level – “People, Profit and Planet”.
69% of the SMEs covered by this report bring environmental and social sustainability into their mission, vision, and values and 63% admit having policies sustainability oriented. However, only 41% say they have staff dedicated to sustainability.
The report highlights the vital role of the networks for SMEs, comparing to bigger companies. In a context of network, SMEs have a bigger impact in the social and adaptability dimensions rather than economic growth.
The CEO and founders who participated in the report consider that “factors that in the past were seen as a competitive disadvantage, today are fostering new opportunities”.
How data supports the journey of future readiness?
The next step demands moving from theory to practice; it is fundamental “understanding what we do with these data and where are we moving with the support of the data”:
1. Data (“intelligence”): gathering, analyzing, sharing, and thinking about data (case studies; access to analysis and diagnosis tools from WEF).
2. Building bridges: an excellent tool to mobilize resources. SMEs that join WEF access a community of peers, specialists, and big companies.
3. Visibility: promoting a bridge between companies and the exchange of best practices.
Fernando Alexandre, Professor at University of Minho, Manuela Vaz, Vice-president of Accenture, Paulo Barradas Rebelo, President of Bluepharma Group, and Rui lopes Ferreira, CEO of Super Bock Group participated in the debate that followed Olivier Woeffray’s presentation. And Paulo Carmona, Presidente of Fórum de Gestores e Administradores de Empresas (FAE) was in charge of the moderation.
Fernando Alexandre recovers the relation between geography and SME performance: “geography matters; it depends on infrastructures, resources, and institutions”. It depends on infrastructures, access, and connections, and how we use technology. And institutions play a fundamental role.
He stresses Carlos Oliveira Cruz’s research, from Instituto Superior Técnico, which, based on the World Bank logistic index, analized the performance of ports and airports. Connectivity between these two dimensions is positive, however, in an administrative dimension: “we have the worst customs of the world in terms of efficiency”.
Fernando Alexandre highlights Portugal, as other countries, should have a “star region” that captivates the attention of large international investors, big talents and entrepreneurship spirits and it is “essential, in particularly, for SMEs; should distinguish themselves through their excellent infrastructures, technology, talent, and critical mass, and institutional agility”.
Manuela Vaz highlights (SMEs) “are a relevant contribution for the big companies’ business” and adds “the fact that SMEs, at any given time, are threatened, also threatens large corporations”.
For Paulo Barradas Rebelo, “better than being an optimistic, is being an optimizer”. The strategic move of Bluepharma was set by a deduction towards the future: guiding research and development towards the manufacturing of generic medicines. Today 50% of the medicines discharged in pharmacies and 80% of the ones used in hospitals are generic.
For Rui Lopes Ferreira, the report indicates a few coinciding elements with the Portuguese reality and adds a factor: the big companies represent 0,1% of the national universe of approximately 1.290.000 companies. And in this universe only 7000 are medium companies and 40 000 are small; the rest of the business landscape is composed by micro-businesses. Aiming to leverage the growth of SMEs, it is vital to consider this reality, because our starting point is mainly composed by micro-businesses.
For Fernando Alexandre, coordinator of the study “Do Made in ao Create in”, is researching the impact of the partnership between University of Minho and Bosch; “a company that enters that ecosystem has to transform itself”. In collaborative contexts as this one, the supplier network is one of the most relevant dimensions, but the transformation is visible at all levels.
For Manuela Vaz, as a country, we should create the needed conditions for development centres. And to achieve it, networks as DTX (Digital Transformation Colab) are vital. Dedicated to digital transformation, DTX has associated, such as IKEA, Simoldes, Bosch and Accenture. Academia is represented by University of Minho, University of Evora, Universidade Católica de Lisboa, INL and CEiiA.
Paulo Barradas Rebelo highlights teleworking extracts from the equation the need of moving abroad, which in association with high salaries and competitive rewards, making talent retaining very challenging.
Rui Lopes Ferreira considers that salaries in Portugal will rise to face international competition and finishes with “high salaries are sustainable if productivity level rises. Aiming for more productivity, we need to retain talent. Everything is connected!”.
World Economic Forum is an independent non-profit organization, which, as a multistakeholder agent, contributes for a better world, promoting the public-private cooperation through the interconnection between the worlds of business, political, cultural, and civil society.
FAE, founded in 1979, is a non-profit organization that promotes the development, capacitation, and evolution of business management and scientific and technical valorization of its associates. It promotes studies, projects, and the exchange of experiences – promoted by FAE or through the collaboration with international organizations.
