The importance of SME’s for the Luxembourg Economy
While globally 70% of smaller businesses close before their tenth business-year1, between 2013-2017 Luxembourg SME’s created solid growth with a value-added increase of 18.4%. Today, “SME’s generate 67.2% of total value added in Luxembourg, which is 10% higher than the EU average.”2 These statistics show that SME’s are becoming increasingly important for the economy and are today of greater importance to the non-financial business economy in Luxembourg than on EU-average with productivity twice as high as the EU average3.
How can we ensure the competitiveness of the SME’s?
With rapid changes and increased digitalisation, what are the main challenges SME’s face and how can they be managed pro-actively to ensure future success?
As a local SME with 20 years of experience in Change Management, MindForest has first-hand experience. Always questioning the status-quo, MindForest took up the challenge of identifying affordable solutions to SME’s in response to their immediate needs for transformation, optimisation and diversification. Hence, Den PME Beroder was born to help in the most critical areas:
A strategy for tomorrow
One top reason why companies run into difficulties is a lack of clear vision and strategy.4 With time and daily business, clarity of vision and strategy fall behind, creating uncertainty for all stakeholders. A vision should be your North Star – your GPS – without which you will miss your goals. Often – like a GPS recalculating routes – the strategy needs to be revised; in most cases, the original company strategy is not appropriate for further growth.
Finding the right employees and keeping them engaged
Finding and training people with the right skills and mindset is time-consuming and tough. With 68% of Luxembourg’s workforce employed in SME’s5, the importance of having engaged and talented employees is obvious and leaders need to adapt to trends and demands. Today, no industry can avoid modernising to remain attractive to employees. New preferences for flexibility and well-being by the younger Generations Y, Z and alfa require revised HR approaches and managerial skillsets.6
Growth and cultural change
SME’s need to embrace cultural changes to remain both competitive and trustworthy. Company growth, new talents and work-methods increase the need for a cultural review and re-organisation. This includes (re-)definition and (re-)integration of values and a reinforcement of a shared vision to lead towards a joint goal. Two areas companies often neglected are those of process optimisation (informative or workflow) and internal communication (information sharing, collaborative spaces and communicative tools for remote workers)7.
Digitalisation and Cybersecurity
Last but not least, the digital transformation is of critical importance. Even the most traditional industries need to move towards digital support systems, such as CRM systems, responsive websites with chatbots or more complete internal work-systems. While digitalisation opens doors and makes workflows quicker and easier, smaller firms often neglect the questions of information- and cybersecurity, especially the importance of both technical protection and awareness campaigns and training is often underestimated8.
Embrace the change
As they play such an important role for the economy, it is crucial to support local businesses to continue to boost both employment and profitability across all sectors. The challenges are many and to remain efficient, competitive and financially lucrative, more often than not, change management is a necessary prerequisite for continued success. Why? Because employees are the best ambassadors for your company. When happy employees have the right tools to work efficiently, the right information and work flows, they will automatically engage and ensure happy customers.
Do you want to know more about Den PME Beroder? Visit MindForest Website
2 European Commission: 2018 SBA Fact Sheet Luxembourg, p.1
3 European Commission : 2018 SBA Fact Sheet Luxembourg, p.2
5 European Commission : 2018 SBA Fact Sheet Luxembourg, p.2
6 Bénédic, Michaël (MindForest): “The Pivotal Role of HR during a Period of Digitalisation”; in: MF Essentials – Is Your Company Future Proof: https://www.mindforest.com/wp-content/uploads/2019/10/Essentials-21_EN.pdf [26.10.2019]
7Kamba, Geoffrey; Weiland, Perine (MindForest): “The Workplace of the Future”; in MF Essentials – Is Your Company Future Proof: https://www.mindforest.com/wp-content/uploads/2019/10/Essentials-21_EN.pdf [26.10.2019]
8 Pedersen, Lene (MindForest): “Cybersecurity : Developing a Pro-active Culture”; in MF Essentials – Is Your Company Future Proof: https://www.mindforest.com/wp-content/uploads/2019/10/Essentials-21_EN.pdf [26.10.2019]