In Europe, there are approximately 23million SME’s, which is about 98% of the business and provides 2/3 of the private employment. The number of enterprises in Malta, grew from just over 72,000 in 2012 to nearly 95,000 in 2016. The National Statistics Office indicated that the bulk increase in business units in Malta was due to small- and medium-sized entities. In fact, 99% of the overall increase was amongst firms that employ fewer than 10 persons, so-called micro firms. Thus, contributing significantly to countries’ gross domestic product. SMEs are crucial to the health, stability, and sustainable economic growth of both developed and developing economies.
SMEs speed up economic growth. They are more flexible and have simpler structures, making them more responsive to change. Yet despite this, it is important that they keep up to speed when it comes to the advancements and implementation in relation to new developments such as digitalisation, as this enables them to remain competitive. Statistics clearly indicate that SMEs are still in the early stages when it comes to ICT adoption and usage in their business, with no real alignment to their business objectives, and limited applicability to their business processes. There are many areas that are of concern to SMEs, but when taken seriously and exploited wisely they can translate into significant opportunities. An SME should initially assess the business situation and identify ways how going digital will improve the entity’s status, thereafter an entity.
A very important regulation that will come into effect on the 25 May is the GDPR. This is not optional and is a business concern that can have significant repercussions if not abided with. It must be seen as an integral part of businesses, it is all about good business and the obligation to respect and protect personal data. Any organisation that conducts business within the EU that collects, or processes personal data needs to be GDPR compliant, regardless of its size.
A key element for the success of an enterprise is talent management. As a business owner, one must learn to attract, select, develop, reward and retain people. Research confirms that SMEs can provide a creative environment that encourages new ideas and innovation. It also states that employees perceive working in an SME as better job quality, less bureaucracy, higher flexibility leading to better job satisfaction and a better working environment. These are all key points that SMEs must use in their favour, as talent management in SMEs is valid and valuable.
Malta is rapidly gaining international recognition as a brand denoting excellence in several sectors, including the pharmaceuticals, life sciences, advanced manufacturing, fintech, aviation and ICT amongst others. In order to assist enterprises, particularly SMEs to improve their competitive edge, Malta Enterprise has developed various incentives for the promotion and expansion of industry and the development of innovative enterprises. A series of new schemes have been launched and a number of other schemes are work in progress.
SMEs’ demand for advice is influenced by various factors, which include external factors, such as competition and regulation, and internal factors, such as the size and nature of the entity, and the relationship and level of trust between the small and medium-sized practices (SMP) and the SME owner-manager. SMPs are considered an important part of the profession. The vast majority of accountancy practices worldwide are believed to be SMPs and it is well recognized that professional accountants are often the preferred source of advice for SMEs, typically forming long-term relationships founded on trust. Here in Malta we are no different and having myself been for a long time an SMP, I can confirm that SMPs are a preferred source of advice to SMEs and the more the work relationship grows and the SMP understands and assists the SME through his advice to develop his aspirations, the more the SMP will become the Trusted Advisor of the SME.
Finally, I am happy to say that the Institute wants to be a catalyst and help its membership with these challenges. In this regard, our SMP Committee is organising the annual SME Forum which amongst other topics will deal with GDPR issues. We are also slowly building up to the Biennial Conference which will this year revolve around Digitisation and how this will be affecting our work. I would like to encourage all SMPs to participate and be active in our activities. With your help we will continue to make the Institute relevant to you, its members in today’s world. We want all activities, communications, and events to focus on adding value to our members, but also on ensuring that our members add value to their clients. However, let us not forget our values of independence, diligence and integrity when we are offering our services and in our lives as professional accountants. If values are not given their due importance we cannot on the other hand add value. Participate, call us and speak to us about your concerns or needs. The Institute is there to serve all its members and professional accountants.
William Spiteri Bailey