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On 22-23 February 2018, the OECD organised the third OECD SME Ministerial Conference on “Strengthening SMEs and Entrepreneurship for Productivity and Inclusive Growth”, hosted by the Mexican Ministry of Economy in Mexico City, Mexico. The event gathered over 300 participants, including Ministers, Vice Ministers, senior policy makers and high-level representatives from 55 OECD Member and Non-Member countries, the European Union and 12 international organisations. The conference was chaired by Ildefonso Guajardo Villarreal, Minister of Economy of Mexico. The Vice Chairs were Marie-Gabrielle Ineichen-Fleisch, State Secretary for Economic Affairs, Education and Research of Switzerland, Stuart Nash, Minister for Small Business of New Zealand, and Hasan Ali Çelik, Vice-Minister of Science, Industry and Technology of Turkey.
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SMEs are key players in national economies around the world. Representing 99% of all businesses, generating about 60% of employment and between 50% and 60% of value added in the OECD area, they can play a major role in delivering growth that is more inclusive and whose benefits are shared more broadly. This is particularly relevant at a time when many countries face the challenges of low growth and productivity, along with rising or persistently high inequality. As important drivers of innovation, SMEs are also instrumental to ensure that economies and societies adapt to major transformations, such as digitalisation, globalisation, ageing and environmental pressures. To enhance the contributions of SMEs, policy should work to address the inefficiencies and barriers that may be holding back entrepreneurship and the development of small businesses, and ease SMEs’ access to resources that are strategic in a global and digitalised economy, such as financing, skills and innovation networks.
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Stronger participation by SMEs in global markets creates opportunities to scale up and enhance productivity, by accelerating innovation, facilitating spill-overs of technology and managerial know-how, and by broadening and deepening the skillset. International exposure, whether through imports, exports, or foreign direct investment (FDI), goes frequently hand in hand with higher productivity, and can be an important driver of employment growth (Wagner, 2012).
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Business transfer Business transfers are commonly understood as the transfer of ownership of a company to one or more legal entities or natural persons. represents a critical stage in the life of many small businesses, which the ageing of the population of entrepreneurs has brought to the fore in many OECD countries. In Japan, for instance, more than 300 000 SME incumbents will attain the age of 70 within the next five years according to recent figures by the Ministry of Economy, Trade and Industry. In Italy, about 9% of entrepreneurs are over 70. In Austria, 27% of all SMEs in the industrial economy, accounting for 30% of employment, are expected to be handed over in the period from 2014 to 2023 (Ziniel et al., 2014). In Canada, approximately 50% to 60% of business owners will retire over 2017-27. In Switzerland, as of 2013, 22% of SME incumbents intended to pass ownership over in the next five years and 25% were seeking to hand the leadership position over (Christen et al., 2013). Furthermore, in former socialist economies in Central and Eastern Europe, the first generation of entrepreneurs is nearing retirement, leading to a significant proportion of the business stock having to be transferred in the coming years.
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Innovation is a key driver of productivity and long-term growth and can help solve social challenges at the lowest possible cost (OECD, 2015a). Innovation in small and medium-sized enterprises (SMEs) is at the core of inclusive growth strategies: more innovative SMEs are more productive SMEs that can pay better wages and offer better working conditions to their workers, thus helping reduce inequalities. Furthermore, recent developments in markets and technologies offer new opportunities for SMEs to innovate and grow. Digitalisation accelerates the diffusion of knowledge and is enabling the emergence of new business models, which may enable firms to scale very quickly, often with few employees, tangible assets or a geographic footprint (OECD, 2017c).
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Inclusive entrepreneurship is an important vehicle for achieving inclusive growth. Business creation by under-represented and disadvantaged groups helps create jobs and fight social and financial exclusion, while stimulating economic growth across the economy. However, while entrepreneurship plays an important role in stimulating innovation and driving job creation, only a relatively small part of the population is involved in starting a business, and not all people have the same opportunities to create and run a business. The objective of inclusive entrepreneurship policies is to ensure that all people have an opportunity to start up and operate in business or self-employment, regardless of their personal characteristics and background.
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A core justification for SME and entrepreneurship policy is the presence of coordination failures and information asymmetries, which may limit SMEs’ ability to contribute to economic and industrial development, innovation, job creation and social cohesion. SME and entrepreneurship support can come in various forms, including advice, training, and enhanced access to finance and can help both, the individual SME owner as well as the rest of society through positive spill-over benefits in terms of job and wealth creation, as well as economic growth.
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