Across the OECD, SMEs account for about 60% of employment and between 50% and 60% of value added and are the main drivers of productivity in many regions and cities. They are a major target of public policy as they are at the core of the policy agenda of many governments that seek responses to the challenges raised by globalization and digitalization. The new OECD SME and Entrepreneurship Outlook presents the latest trends with regard to the performance of SMEs and an overview on current business conditions and policy frameworks. The report highlights that:
- Enterprise creations are back to pre-crisis level, even though most new entries and job creation took place in low-productive sectors. More lower-productivity jobs mean more lower-paid jobs. SMEs usually pay employees around 20% less than large firms. This points out a wage stagnation observed in many OECD countries in a context of recovery and rise of employment;
- Innovation is key to boost productivity and digitalization offers a wide range of opportunities to SMEs in terms of: 1) open sourcing and open innovation; 2) creation of innovative financial services; 3) access to skills through better job recruitment sites, outsourcing and online task hiring, or by connecting them with knowledge partners; 4) reduction of size disadvantages in international trade, by reducing the absolute costs associated with transport and border operations; access to higher quality public services, as it allows for a more efficient interaction with public administration and a more user-centric approach to policy making;
- SMEs must be better prepared for the digital transition. They lag in digitalization as the report stresses that they are less likely to adopt digital-enhanced business practices, they do not possess proper skills for managing the digital transformation as well as to engage their employees in ICT training. In addition while there are opportunities related to outsourcing, this can also exacerbate SMEs difficulties in finding talents and trained workers in the long term.
Against these developments, the Outlook emphasizes the importance for innovative policy and the need for a whole-of-government approach, which includes efficient multi-level governments arrangements across national and subnational levels, regions and cities, international peer learning and enhanced monitoring and evaluation capacity.
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Source: The Organisation for Economic Co-operation and Development - OECD
