The Brussels-based Association of European Chambers of Commerce and Industry (EUROCHAMBRES) has an extensive membership of over 20 million businesses across Europe, of which 93% are SMEs. Secretary General of EUROCHAMBRES, Mr. Arnaldo Abruzzini, met with KITE Invest to discuss the significance of communications vis-a-vis giving adequate representation and a voice to all businesses. To this we focused on the concept of the Global Value Chain and the launch of EUROCHAMBRES European business information hub, the European International Platform, which is set to launch later this year.
KITE Invest: Eurochambres identifies four main factors that are affecting the European market: the global recession, the impact of emerging markets globally, climate change and a shifting EU demography. As the global recession comes to an end, have there been any surprising occurrences and have any sectors made unexpected strides as the economy bounces back?
Mr. Arnaldo Abruzzini: Eurochambres published at the beginning of this year our economic survey, which is based on the results of interviewing 55,000 entrepreneurs from around Europe on their expectations in terms of economic indicators for the upcoming year. An interesting geographic element from this research was that the Baltic countries – Estonia, Latvia and Lithuania – scored very high in terms of expectations, while the South Western countries, like Portugal, scored at the bottom of the ranking. This is not necessarily a new finding, but what is important is the confidence of the business communities is better prepared in the Nordic dimension than in the Southern dimension to take on the challenge of an economic turn around this year. Geographically, the Nordic countries are recovering much faster due the pace of implementation of reforms, which has a strong impact on the economic recovery.
KITE: How does Eurochambres manage these different levels of ‘confidence’ amongst the members?
AA: Our role is to try and pressure member-state governments to deliver on the ground. There is a widening gap between the European aspiration in terms of macro-economic targets and the implementation rate of measures that should be conducive to achieving those targets. The current discussions of targets on regularization, CO2 reduction emissions, energy efficiency, renewable energy use, et cetera . . . These targets, besides being a political push by policy makers to produce, have had very little interest by the business community in Europe. First of all the business community is not even aware of this discussion on targets, and second, should they be aware of the targets, many are not interested in actions by the member-state that should help reach those targets. This is the gap that Eurochambres is seeing, a lack of discussion and communication.
KITE: Eurochambres states that 90% of the world’s economic growth will be generated outside of Europe by 2015, how does Eurochambres specifically engage, negotiate and facilitate trade and investment for your European members?
AA: I strongly believe we should move away from the specific indicators or where the value added or the growth is generated. We should look more closely at what is called the Global Value Chain. If we consider the Global Value Chain, small business are generally not exposed to foreign markets but if they are included in this Chain, they may not export directly to foreign markets, but they will be part of a system that will deliver products and services on the global scale. Eurochambres takes part in this Chain from two different approaches. One is with negotiations, meaning that Europe is active in free trade agreements with third countries or regions around the world and to make sure those SMEs concerns are taken into account. The second angle is the implementation of these trade agreements.
For instance, Europe signed a capital trade and association agreements last year with Central America, Colombia and Peru. The disconnect arises with the fact that the large majority of Eurochambres’ 20 million members are unaware that the signing of those agreements have opened and created many more potential relations and benefits. Following the signing of agreements there needs to be greater communication, because without the disintegration of such communications companies will be unaware and unable to reap the benefits of such agreements.
KITE: As you just mentioned the role of communications plays a very important role in trade and investment. How does Eurochambres communicate on behalf of some of your members that are in lesser known and / or harder to reach markets in order to expose and uncover them?
AA: There are three networks I would like to mention. The first example is from 20 years ago when the internal market process was being launched, which meant for many of our members, especially the SMEs, international expansion to even other European member-states. At that time, we launched The Euro Info Centres, consisting of organizations working in a network, at a European level, with the objective to deliver practical information to businesses located in member-states, as a result of the benefit of being integrated in a single market. Since then this concept has been able to really grow and evolve, and now there is a network called Europe Enterprise Network. This is a network of more than 600 organizations around Europe, which delivers practical information to business about not only the internal market, but also opportunities arising from foreign markets.
Lastly, the third entity is the European International Platform – to be finalized by the end of this year. The Platform is a hub for the European business market, where information about opportunities on third markets will be gathered and redistributed. It is a platform of opportunities, such as trade, recruitment, and specific sector businesses. This is specifically resourceful for the small and medium size businesses that do not have the capabilities or have enough resources to screen the foreign markets to find opportunities.
KITE: As the voice and advocate for a massive number of Eurochambres businesses – 20 million, 93% of which are SMEs– what does Eurochambres identify as the greatest opportunities and challenges?
AA: I would say that the main challenge is to give a voice of the millions of business members heard throughout Europe. If you are a large business it does not take a long time to start your office and to have your team fully dedicated to represent your interest vis-a-vis the European institutions. If you are a small business, however, you do not have resources to connect to institutions or even see interest of doing so. Therefore, these smaller businesses rely a great deal on the representation capacity of the business organizations, like Eurochambres. This is the number one greatest challenge for Eurochambres, to ensure that the voices of those millions of businesses are heard in Brussels.
Politically speaking, greater attention needs to be awarded to SMEs. The importance of the SME environment is growing, as large businesses continue to loose ground in terms of GDP output and in terms of employment for decades because of the growth of SMEs. For instance, in terms of statistics, SMEs accounts for 65% of European GDP growth, SMEs make up over 70% of the employment growth and new job creation is the most impressive with more than 80% of new jobs in the past 5 years have been created by small business. Consequently, having the specific regard for the small business environment is a guarantee that our economy will continue to perform correctly and will continue to have a socially acceptable business environment.
KITE: Eurochambres has a European focus, but has the organization incorporated lesson learned or partnerships from around the world?
AA: Europe is by far the champion for the SME policy, no doubt. Irrespective of the European country, the European capacity to care about the SME environment is by far the best experience that exists.
It is a result of this capacity level, by which we aim to incorporate the European threshold at the negotiation table with a third country. We can exchange our experiences with North America, Latin America, Asia et cetera, as the European SME policy is recognizable worldwide. For instance, the Global Value Chain is composed of a limited number of large businesses and a huge number of small and medium businesses and it is this capacity to work towards a better environment of small business is what will guarantee the welfare our economy in the future.