Small Enterprise Competitiveness
Malta.
May 2011.
Small Enterprise Competitiveness
RESTRUCTURING ECONOMICS:
Redefinition due to Technology Changes
Globalisation
Information Era
From Indivisibility of Resources to Individual
Choice
From Equilibrium to Managing Change
From Henry Ford to Bill Gates
2
Small Enterprise Competitiveness
TRADE LEADS TO A WIN-WIN
SITUATION
TRADE DEMANDS SPECIALISATION
(ADAM SMITH -1776)
MALTA:TRADE A NECESSITY NOT AN
OPTION
THE “VULNERABILITY COMPLEX” VS
SPECIALISATION
3
Small Enterprise Competitiveness
KEY QUESTION :
HOW TO SPECIALISE,
MAINTAIN DIVERSIFICATION
SO AS TO MINIMISE
VULNERABLITY?
(MALTA ‘S WORKFORCE = 140,000)
4
Small Enterprise Competitiveness
THE ECONOMY
AGRICULTURE
MANUFACTURING
TOURISM
FINANCIAL SERVICES
TRADING
TRANSHIPMENT ETC.
MANUFACTURING
ELECTRONICS
CHEMICALS
CLOTHING
FOOD & BEVERAGES
FURNITURE ETC.
5
Small Enterprise Competitiveness
PROTECTIONISM:
EVERYTHING TO EVERYONE- FRAGMENTATION
VERTICAL & HORIZONTAL INTEGRATION
INDIVIDUAL/COLLECTIVE INEFFICIENCIES
HIGH COST STRUCTURES
TRADE LIBERALISATION
BETTER RESOURCE ALLOCATION
REWARDING STRONG PLAYERS NOT LAME
DUCKS
CATALYST FOR SPECIALISATION- the value chain
6
Small Enterprise Competitiveness
Competitiveness:
*A dynamic process- “war of movement”
*External focus- the Competition
But who are our competitors?
Segmentation.
At what level and on what basis should we be competing?
Market positioning.
STRATEGIC THINKING & PLANNING
7
Small Enterprise Competitiveness
“Ultimately only companies themselves can achieve
and sustain competitive advantage”
M.E.PORTER
E.U. : SMEs = 99.8% of all Companies
= 66% of total Employment
= 65% of Business Turnover
SME definition :
Micro
Small
Medium
< 10 employees
10-50
51-250
8
Small Enterprise Competitiveness
SMEs : Key role in Economic Development
“SMEs play a decisive role in JOB creation, and more
generally, as a factor of social stability and
economic drive”
EU COUNCIL 1995.
Reliance on Direct Foreign Investment
Exploiting Factors of Production(incl.labour)
Technology Transfer and Innovation
9
Small Enterprise Competitiveness
RESTRUCTURING
from
stand-alone,
relatively static enterprises
operating in a confined market,
to
“value creating” units
within a whole system (or value chain)
dynamic and sensitive consumer needs
export-oriented.
10
Small Enterprise Competitiveness
The need to :
UNDERSTAND AND ADAPT TO CHANGING
BUSINESS ENVIRONMENT
GET FIT
LEARN TO COLLABORATE
NO BLUEPRINT
CHALLENGES NOT INSURMOUNTABLE
BEWARE OF MIND-SET
11
Small Enterprise Competitiveness
THE OPERATING ENVIRONMENT
COLLABORATION
THE ENTERPRISE
MACRO-
INSTITUTIONAL
ECONOMY
SUPPORT
THE
MARKET
OPPORTUNITY
KNOWLEDGE
COMPETENCIES
RESOURCES
12
COMPETITION
Small Enterprise Competitiveness
THE OPERATING ENVIRONMENT
COLLABORATION -(BUILD BRIDGES)
•VALUE CHAIN
•SECTOR
•COMPETITION
MACRO-ECONOMY
INSTITUTIONAL SUPPORT
•MONETARY
•TRANSPORT
•FISCAL
•OTHER
(CO-ORDINATION & SYNERGY)
•PRO-BUSINESS PUBLIC SECTOR
•PEOPLE DEVELOPMENT
(EDUCATION/ETC)
•OTHER
COMPETITION KNOW & CHOOSE YOUR COMPETITION
13
Small Enterprise Competitiveness
THE ENTERPRISE
BEST
MARKET
OPPORTUNITIES
SEGMENTATION
SPECIALISATION
POSITIONING
HOME/ABROAD
MATCH
KNOWLEDGE
SKILLS
CREATIVITY
KNOW-HOW
COMPETENCIES RESOURCES
STRENGTHS &
WEAKNESSES
IDENTIFY
PRIORITISE
14
Small Enterprise Competitiveness
THE WAY FORWARD:
THE STRATEGIC PLAN
A STRUCTURED APPROACH TO
INFORMATION
BUSINESS INTUTION NOT ENOUGH
GIVE DIRECTION & HELP PRIORITISE
PLAN IMPLEMENTATION REQUIRES
COMMITMENT
ENHANCES FLEXIBILITY, ADAPTABILITY
THE POWER OF VISIONS
15
Small Enterprise Competitiveness
CONCLUSION:
“It is not the strongest species that
survive, nor the most intelligent, but
the ones that are most responsive to
change”.
Charles Darwin
“The Origin of Species” (1859)
16
Small Enterprise Competitiveness
Thank
you
Joseph Vella Bonnici
fms18@onvol.net
17