Business Management

Don Grantham (Europe) - Thrive or Survive: Will Small Businesses be Europe's Silver Bullet?

The popular consensus of the last few weeks is that the Eurozone hangs by a thread and that across Europe, many countries are on the verge of a deeper, more challenging recession than previously predicted. Without being dismissive of the seriousness of the situation, it is worth arguing that this is only one side of the story.  Over a quarter (28%) of small businesses located in Central and Eastern Europe (CEE) countries expect to be more successful in the next 12-18 months than they were in the previous. Of course, 28% of optimism is hardly a landslide – and it drops to only 8% if we look at Greece – but perhaps these statistics reflect a certain relief at being able to start afresh in 2012.

These bullish findings come from recent research commissioned from an independent party, Vanson Bourne, of 2,100 small to mid-sized business (SMB) owners in 21 countries across Europe including Czech Republic, Hungary, Poland, Romania, Russia and Ukraine. The businesses were sized from one owner-manager up to 250 employees and from multiple industries such as manufacturing, retail, automotive, financial, telecoms and IT. Given EU figures indicate 99% of all businesses in the European region fall into the small business category, this is highly statistically relevant.

Although small and medium sized businesses (SMB) New Year resolutions are geared towards positivity and success, they can’t do it alone. In Europe, large enterprises and local governments should strive to work together with the SMB population to find a way to tackle this economic situation with an eye to laying the foundations for the long term as well as the much needed short term solution. In these cautious days, it also seems there is a need for industries to make business critical technology for SMBs accessible and affordable. Regardless of size, business goal or industry, the goal of staying or becoming competitive, and using technology to do so, is a priority for SMBs. Serious consideration should therefore be given to the potential of SMBs as a major driving force of the economic transformation and recovery process.

The research results also show that the SMB owners are upbeat about the role they can play in the path to recovery, with 82% saying they believe SMBs are the backbone of their economy.  A clear majority, 63%, believe that SMB “will be most responsible for providing the jobs and innovation to bring back the good times”. Furthermore, 45% felt that the next 12-18 months would be tough, but that their country and economy will emerge stronger for the experience. It's clear these SMBs aren’t recklessly hopeful; their view is that while difficulties are ahead, they have a lot to offer and are confident in their ability to take a lead role in the recovery process.

Reach for the sky – or the cloud first?

The findings echo my own experience. In travels to more than 20 countries in Central and Eastern Europe, I have found that the majority of current and potential customers ask questions along the same theme. They ask; “In these difficult times, how can I find a better way of doing more with less, of being more productive, more efficient, more agile? How do I attract and retain the best talent and respond to an ever-changing market-place? How can I compete against the other companies in my industry? Tell me how technology can help me with that.”

The good news is that there are very positive answers to these questions:  cloud computing will be the catalyst to recovery – and provide opportunities for ground breaking business models of the future.  The profile of the IT landscape in CEE, having little legacy infrastructure in many CEE countries is a huge advantage, and advancing to cloud technologies ―either public or private ― is something that SMBs are on the journey to embrace. A key indicator of IT relevance is that 55% of all SMB owners in CEE markets confirm that use of IT will be the deciding factor in whether they just survive or thrive ... although only 18% then said they will invest in technology in 2012.

This represents the economic reality of the challenges that face SMB – a challenge to which the IT sector has a responsibility to respond. 48% of the SMB survey respondents in CEE confirmed that cloud computing is going to be very important for the SMB segment, and 42% indicated that they are planning to deploy cloud computing services in the next 12-18 months. That said, these SMBs were also were clear that they need help to make this transition. Approximately 83% expect the IT sector to take responsibility for guaranteeing that businesses and people can easily and safely adopt cloud services with regards to access, transparency, data privacy and security.

The appetite for growth among SMBs and the thirst for technology to fuel it is something that we dismiss at our peril in Europe. Collectively, we have an enormous opportunity to help stabilize economies by supporting the SMB community. Speaking purely from the perspective of a software provider, we will continue to initiate this conversation with regional and local governments, to stimulate programs and initiate actions to encourage these small businesses. Surveying the SMB landscape today, it is clear there is much more to do, and much more to come as we navigate the route back to prosperity.

By Don Grantham, Microsoft CEE


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