SMEs are the real growth engine behind the impressive performance of German economy. Economic activities in Germany are dispersed and not concentrated owing to the SME sector. In an interview with Relin Hedly, New Media Communication, Mario Ohoven, President of the BVMW (Federal Association of Small and Medium Enterprises) highlights the strengths of the SME sector below…
1.What is the contribution of SMEs towards German economy?
There is a big contribution of SMEs towards German economy. It is not for nothing called the “German Mittelstand”. SMEs represent 99.6 percent of the German companies. They create 58 percent of the jobs subject to social insurance contributions and add to 58 percent of the net value added of all companies.
2. Are German policies business-friendly? How do these policies help in promoting small businesses?
In general, German policies are not business-friendly. The burden of bureaucracy for small and medium-sized companies is much too high. In 2018, costs of bureaucracy increased to 50.2 billion euro from 45.14 billion euro in 2017. Visits to the authorities cannot be carried out online, there are long legal retention periods and outdated depreciation rules. Laws for the reduction of bureaucracy cannot provide a remedy.
3. Is there any impact of the current economic slowdown on the SMEs?
Yes, there is an impact. 92 percent of the SMEs do have difficulties to occupy vacancies in their companies. First the industrial sector, now the service sector is also negatively affected by the recession. The exact impact of the current economic slowdown depends on the regional sales structure of the SMEs.
4. What would be your message to aspiring entrepreneurs?
Do not be discouraged, it is desirable do be an entrepreneur. Germany needs additional entrepreneurs for creating jobs in future areas of the economy. German policy must encourage entrepreneurial culture and self-employment.
5. What are the different sectors that India and Germany can collaborate on?
Companies from India and Germany cooperate in the initiative “Digital India” in the sectors “Industry 4.0” and “The internet of things”. In addition, Germany supports the Indian economy with its ambitious reform programs concentrating on the sectors energy, sustainable city development and environmental and resource protection.