שם הכותב: תאריך: 20 פברואר 2013

Macro-level statistics illustrate that SMEs account for over 98.6% of enterprises and 55% of employment in Israel and such a picture is comparable to American and European data. OECD figures show that firms that remain in business have a 60-70% chance of surviving for at least five more years after the first two years[1].

SMEs are the most frequent sector that collapses[2] [3]among the firms that fail. In Israel approximately 12% of the total number of firms fail, mostly SMEs; specifically in the areas of construction (approximately 18.5%), business services (approx. 18%), commerce (approx. 17.5%) and transport, storage and communications (approx. 14.5%)[4]; with the highest percentage of negative change (net) of total businesses in wholesale trade (-6.0%), accommodation services and restaurants (-5.4%), transport, storage and communications (-5.1%) and real estate and rental services (-4.6%)[5].

These figures support a supposition that at a macro level the constraints SMEs face have a higher impact than their inherent advantages as small firms.

While global market access has become a strategic necessity for SMEs and entrepreneurship enterprises, Israeli SMEs' participation in international markets lags significantly behind that of American and European SMES as well as behind Israeli larger firms, whose command of resources and global reach can be significant. Some great innovations have come from Israeli SMEs, particularly in technological fields; while increasingly; foreign companies have also been recognizing the competitive benefits of integrating leading Israeli high-tech innovations into their strategic plans[6]. Despite such potential, many Israeli entrepreneurs and SMEs' owners-managers are seizing these opportunities and their firms collapse. One main reason, insufficiently discussed in the research, is attributed to the lack of a national declared policy regarding education, training and ongoing managerial, marketing and networking support for SMEs.

Several agencies and institutions are dedicated to the business and industry communities while neither focuses exclusively on SMEs or entrepreneurship except of the Israeli SMEs authority, which represents the business community. The Israeli Manufacturers’ Association established an economy department which handles SMEs, among other projects.

These findings certainly point on constraints derived from the governmental and regulative aspects of the Israeli SMEs labor market; specifically the lack in providing: easy access to information in the areas of tax, establishing regulatory frameworks and trade rules, and in setting other legal and advisory services as well as governmental programs that could assist SMEs in gaining access to finance – a major hurdle for SMEs. It also proves a deficit in encouraging entrepreneurial firms to startup and in facilitating existing SMEs for survival and growth at a national level.

Setting the concepts of innovation, creativity and risk-taking at the core of the national agenda can be achieved by: educating to entrepreneurship, training existing SME workers and managers towards success and constructing reliable databases that could present an updated picture on SMEs on an ongoing basis.

These, in turn, can and will create a promising means for progress, improvement and growth.

Governments should mobilize a coherent mix of instruments covering research, innovation and other related policies in order to meet SMEs' managers and entrepreneurs' needs. Moreover, a classification should be conducted of the types of SMEs with the list of each type's needs in order to furnish the relevant and effective support, this rather than providing general, widespread programs which their effectiveness represented at both the result and the process dimension, is questionable.

 


[1]  The OECD Observer, November, 2004. Entrepreneurship Centre Takes Off. Organization for Economic and Development, (25), 32.
[2][Report, 2002-2003. Firms' failure-  a longitudinal overlook, Israeli Ministry of Industry, Commerce and Employment.
[3][2] Israeli Bank, 2005. Report
[4] Report, Business failure 2002-2003 and a longtitunual perspective The Ministry of Industry, Commerce and Employment, the Authority for workforce planning (Hebrew).
[5]  CBS, the Israeli statistical annual, 2004, Number 18.4.