How SMEs can gain a competitive edge

Last week the European Union celebrated the so-called SME Week, which is the annual moment to promote entrepreneurship and, more in general, small and medium-sized enterprises. This is also an opportunity for European, Maltese and Gozitan businesses alike, the vast majority of which are SMEs, to share their experiences on competitiveness, innovation and their impact on the local community.

Those who know me know that I grew up in Nadur, Gozo. Growing up in Nadur, I witnessed various small businesses come and go. Those businesses which built for themselves an identity based on the authenticity of their products and quality of service, not only survived, but also thrived.

In today’s world, innovation and authenticity are a must. In this regard, I enjoyed visiting the premises of ZZZING last week. ZZZING is a Maltese company that helps property owners lease their property on a short-term basis via already established online platforms such as, Airbnb, TripAdvisor, Exepedia and Google.  When the ZZZING’s staff were recounting their stories, I could not help but think to myself that innovation and digitalisation was the key to their success. The company also managed to build up considerable resilience via digitalizing their business model, making sure that their mode of operation is secure, come what may.

ZZZING’s story is inspiring not just because of the idea behind their service, but because their thought process, and how they implemented their ideas, teach us that even old concepts can be transformed in contemporary times. After all, short-term rentals have been with us for centuries. And yet, this company took a centuries’ old service, and adapted it to today’s needs.

In my view, this is the kind of thinking that Maltese SMEs need to continue promoting, if they are to effectively compete with larger companies that include multinationals. Multinationals have their resources and their bank accounts. SMEs have their flexibility and their potential for fast innovation – factors that they must indeed use if they are to gain a competitive edge.

The European Union needs to continue assisting these SMEs to ensure that they will not embark on this journey by themselves. Countless funding opportunities are available for SMEs to tap into, including Horizon Europe, Digital Europe, as well as the Single Market Programme. These programmes all serve to help SMEs become more resilient and more innovative while supporting their needs of internationalisation through training, increasing digitalization and research. All these characteristics are essential to be successful in the digital and green transition.

Countless challenges remain, however. And the post-Covid scenario – we are still healing from the economic and social wounds of the pandemic – could also rightly be viewed as being a chaotic one given rising inflation in Europe and structural issues such as administrative burden and access to finance. However, where others see chaos, we should seek out opportunities. When studying history at Sir Mikiel Anġ Refalo Sixth Form in Rabat Gozo, I was taught that the Maltese had made the best out of chaotic times, offering care and related services to injured soldiers during both the Crimean War and World War I. The actions of the Maltese back then, benefitted both the British armies, as well as the economy of Malta itself, because our ancestors were able to adapt.

As the Maltese adapted back then, so too can contemporary entrepreneurs adapt when faced with crises as well as the challenges and needs of the future. This process, however, must be an ongoing one. For resilience to truly come about, SMEs need to continue streamlining their operations to be more innovative and make sure they have an edge over other players amid the fierce competition of the global economy. Will it be easy to do so? Of course, it will not. But with their tenacity, continuous efforts and passion, our entrepreneurs and SMEs can also get there!

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