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University of Athens Centre of Financial Studies

University of Athens Centre of Financial Studies. SME vs large companies (looking into the crystal ball) CROSSING BORDERS Venturing into the European Research Area Six countries programme, Eisenstadt, 30 Oct. 2003. Prof. L. J. Tsipouri. Historic evidence.

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University of Athens Centre of Financial Studies

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  1. University of Athens Centre of Financial Studies SME vs large companies (looking into the crystal ball) CROSSING BORDERS Venturing into the European Research Area Six countries programme, Eisenstadt, 30 Oct. 2003 Prof. L. J.Tsipouri

  2. Historic evidence • Reemergence of the small firm sector in the ’80s after a long period of relative decline • Reemergence related to technology, firm strategy and (sometimes) cyclical effects • Reemergence reinforced by policy support measures (sometimes effective, others not) • Will this trend continue? Be amplified? Or reverse?

  3. There are not only economic but alsopolitical, psychological and social considerations in favour of SME development.The effort here is to discuss economics only!

  4. Targets and measurement • How do we measure convergence/divergence? (share of total employment, profits, radical innovations) • Do we want the number of SMEs to grow? • Do we want their average size or profitability to grow? • Do we want them to become more innovative relatively to big companies?

  5. What are SMEs? • Limited resources • Owner/management structures • No influence on their environment

  6. Theoretical assumptions

  7. Which changes will the ERA bring (or at least we hope it will) • More R&D financial resources • More and more mobile human capital • More effective R&D • Shift towards innovation support (plus open coordination effects) • More transeuropean networking (R&D, large infrastructure) • All this leads to more competition?

  8. Types of SMEs

  9. Big companies and SMEs

  10. SME needs unlikely to be covered by the ERA • Amplification of messages for the low and medium tech range • Increasing entrepreneurship • Changes in corporate governance

  11. SME needs likely to be covered by the ERA • Human capital/labour market • Access to infrastructure • Networking • IPRs (?) All aspects addressed to already sensitive SMEs

  12. The most probable scenario:the ERA will reinforce vibrations in the market but it is unlikely by itself alone to affect the overall balance of SMEs/big companies.It is very likely though it will reinforce NTBFs

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