Over the past few years, European SMEs have faced significant challenges, navigating through an unprecedented pandemic and subsequent global supply chain disruptions. As the world moves into the post-pandemic era, the new European Industrial Strategy, emphasizing a green and digital economy, along with the Open Strategic Autonomy (OSA) paradigm, presents both challenges and opportunities that warrant specific attention. OSA, a concept gaining prominence in EU policy discussions, aims to ensure that the EU can pursue its interests and values independently while maintaining openness to global cooperation and interdependence. This approach responds to increasing global uncertainties and dependencies, seeking a balance between self-reliance and international collaboration. SMEs stand to benefit significantly from this new paradigm, although it also introduces notable challenges.
Despite these challenges, SMEs have demonstrated remarkable resilience and growth. Between 2021 and 2023, SMEs have shown improvements across all indicators, with real value added rising by 4.5% by the end of 2023 compared to 2021. Employment within SMEs has fully recovered from the pandemic and continues to grow steadily. Furthermore, the number of enterprises has increased by 5.4% since 2021. On all these indicators, SMEs have outperformed large enterprises, highlighting their critical role in driving post-pandemic recovery, particularly among micro-enterprises.
In response to strategic autonomy goals, the EU, its Member States, and many non-EU countries have implemented various policies. These measures include trade initiatives and traditional industrial policy instruments such as direct subsidies and loans to bolster production in strategic sectors. However, existing OSA policies have placed limited emphasis on supporting SMEs, despite their essential role in economic recovery and competitiveness. SMEs can significantly contribute to the success and long-term sustainability of OSA initiatives.
Policymakers need to recognize SMEs as catalysts for the necessary change to meet the objectives outlined by the OSA paradigm. Turning SMEs from followers into leaders of radical change requires embedding SME policy at the heart of EU policymaking. By doing so, Europe can ensure that SMEs play a central role in achieving strategic autonomy and driving the twin transition to a green and digital economy.
Once again, European SMEs have proven their resilience and potential for growth in the face of significant challenges. As Europe moves forward with its Industrial Strategy and OSA initiatives, it is crucial to place SMEs at the forefront of policy considerations, enabling them to lead the charge in Europe’s economic and strategic transformation.
Source: INSME Secretariat
