SMEs embrace “knowledge society”

The survey found globalisation was helping smaller firms attract specialist staff Keystone

Small and medium-sized enterprises (SMEs) are optimistic about the "knowledge society megatrend", according to a major Credit Suisse survey.

Economists at Switzerland’s second-largest bank surveyed nearly 1,600 SMEs about their views on selected important trends, general shifts in thinking and approaches affecting countries, industries and organisations.

The main focus of this year’s survey, Opportunities and Risks for SMEs, was the “knowledge society”, where knowledge is the primary production resource instead of capital and labour.

The SMEs’ efficient decision-making channels and good networks gave them a competitive advantage in the modern information age, the survey found. The researchers pointed out however that SMEs were not making the best use of their advantages.

In the first place, they were still not fully exploiting their employees’ knowledge and ideas. Secondly, the SMEs concentrated primarily on technological product innovations and underestimated the potential for improving processes.

The researchers found that SMEs saw even greater opportunities in technological advancement than in the knowledge society. But changing values and, in contrast to last year, globalisation, were also identified as opportunities by most SMEs.

Globalisation advantages

“We’re not surprised about the result because already in the first study there were some trends that were well known to our association. We knew that technological progress was the most important thing for SMEs,” Patrick Lucca from the Swiss association of SMEs told swissinfo.

“The only surprise was the positive reaction to globalisation. I think SMEs realise that this process has some advantages – for small enterprises it’s now possible to export to new markets. There’s also globalisation on a personal level. Most firms are looking for new workers, for specialists, and thanks to globalisation there is a better possibility to get new workers.”

In contrast, SMEs largely view the scarcity of resources as a risk. Overall, SMEs now have a more positive outlook for the future than last year.

“Companies that adjust well to change and identify attractive business opportunities early on are the ones to enjoy lasting success,” said Hans Baumgartner, head of SME Corporate Clients Switzerland at Credit Suisse.

Knowledge society

In the days before the internet-driven information age, data and information used to be scarce commodities, often the reserve of research and development departments.

When research resulted in a profitable-looking innovation, it was protected by a patent wherever possible. This model is largely redundant in an information society in which Wikipedia, Google, open source and time-to-market have long since become everyday terms.

Thanks to virtual networks and global data sharing, it is no longer the information itself that is a scarce resource, but rather information filtered and processed by human intelligence: knowledge.

Innovations for handling knowledge are therefore the success factors of the future, according to Credit Suisse, explaining that almost two-thirds of SMEs have a fundamentally positive view of the contribution of the knowledge society megatrend towards this development.

General optimism

The survey also shows that, in general, SMEs believe that the future holds more opportunities than risks – and not just with regard to the knowledge society.

Of the six megatrends surveyed – demography, globalisation, changes in values, scarcity of resources, technological progress and knowledge society – technological advancement is seen to promise the greatest opportunities of all the megatrends. This megatrend inspires optimism in nearly 80 per cent of SMEs.

A qualified workforce is an essential prerequisite for a knowledge economy, and workers in Switzerland certainly have a lot of knowledge. In the survey, almost four out of five SMEs rated the level of education of their staff, measured by their activity or function, as good to very good.

But workers are thin on the ground at the moment. According to the survey, 84 per cent of SMEs struggle to fill a vacant position within a reasonable period of time. Almost half rate the difficulties involved as very serious.

swissinfo

Key facts

A record 36,427 firms started up in Switzerland last year – up 6.3% on 2006, according to market research company Dun & Bradstreet.
At the same time bankruptcies dropped by 3,991 or 3.3%.
A 2005 study by St Gallen University on entrepreneurship in Switzerland showed 6.1% of adults in the country had been involved in the creation of a firm within three-and-a-half years of the survey.
Nearly 10% of the adult Swiss population was an owner-manager of a company more than three-and-a-half years old.
About 40% of new firms were created by women, the study found.
The average age of Swiss entrepreneurs in 2005 was 39.

SMEs in Switzerland

Small and medium sized enterprises (SMEs) are characterised by employing up to 250 staff – but nearly 90% have fewer than ten employees.

The European Union defines such firms as having between 10 and 249 employees.

SMEs account for 99.7% of Switzerland’s 307,000 companies and 66.8% of the workforce.

The World Bank’s “Doing Business 2008” report, released last year, ranked Switzerland as having the 16th best regulatory system for SMEs out of 178 countries.

The report compared the time and cost involved in setting up, running and closing down a business. In 2007, Switzerland was ranked 15th.