The study analyses how the current inflation levels are affecting SMEs in terms of late payments, bankruptcies, investment, the adoption of digital and green technologies, participation in public procurement, access to skilled labour and ultimately – profitability.
The findings suggest that high inflation played a certain role in prompting bankruptcies, reducing participation in public procurement and making access to skilled labour more difficult. Also, stronger adverse effects are expected in the short-term regarding SMEs’ payment practices, though the impact remains heterogeneous across industrial ecosystems, depending on SMEs’ access to financing, ability to pass on higher costs to customers and other factors. On the other hand, high inflation may have accelerated investment for the digital and green transition.
Policywise, this has a number of important implications: first, as inflation remains an important additional threat to SMEs, national governments should monitor the ongoing economic developments as regards inflationary effects with the help of a central monitoring unit. Second, measures opening up alternative sourcing options for energy as well as raw materials can be very effective even in the short run. Finally, given SMEs are impacted so differently by the high-price environment, the study strongly suggests that policymakers should refrain from broad-based policy support measures that do not distinguish sufficiently between SMEs, such as blanked energy price subsidies.
The study was published on 15 December 2023.
Documents
SMEs and high inflation - final report
Details
- Publication date
- 15 December 2023
- Author
- Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs