What are the facts about small business
SMEs and digitization in Austria: data and facts
The family-run carpentry, the barber shop next door or the medium-sized industrial company - SMEs are equally affected by digitization, regardless of their size and industry. Due to the digital transformation, not only the production conditions are changing, but also customer behavior. To this end, they are not only forced to adapt their production and services, but also have to develop new sales and marketing strategies, for example, in order to remain competitive.
+++ “Digital Dossier 2018”: Small and medium-sized companies have a lot of catching up to do in digital terms +++
Studies on SMEs anddigitalization
The digital transformation requires putting business models on a new footing. However, this process is only progressing slowly in Austria: In the last two years, numerous studies and publications have pointed out that the domestic SME landscape needs to catch up digitally. These include, for example, the digital dossier and the SME report 2018 of the Federal Ministry for Digitization and Business Location (BMDW) or a digitization study from 2017 that was carried out among 1,700 Austrian SMEs from seven different sectors of the Austrian Chamber of Commerce.
What actually is an SME?
If you want to discuss the degree of digitization of the domestic SME landscape, it is advisable to first look at general data and facts about SMEs in Austria. This also includes the definition. In principle, the European Commission's SME definition applies in Austria, which is based on three criteria: number of employees, annual turnover and the annual balance sheet total. In concrete terms, this means that a company is counted as an SME if it employs fewer than 250 people, has an annual turnover of no more than 50 million or whose annual balance sheet total does not exceed 43 million.
What do SMEs do?
"SMEs are the backbone of the domestic economy." This often quoted sentence can also be confirmed on the basis of specific data. According to the SME Report 2018, which was published in November last year, there are currently around 328,900 SMEs in Austria. This corresponds to 99.6 percent of Austrian companies. In addition, almost two million people are employed in SMEs. This in turn corresponds to 68 percent of all employed persons in the market-oriented economy. The total turnover of SMEs is around 455 billion euros per year. According to the SME Report 2018, that's 62 percent of value added.
A long-term comparison shows that the relevance of SMEs has become increasingly important in recent years. The number of SMEs increased by 9.8 percent between 2008 and 2016, the number of employees in SMEs increased by 9.4 percent, and sales by 12.3 percent.
Which industries include SMEs?
It also shows that SMEs are not a homogeneous mass, but differ in terms of number of employees, turnover or industry. For example, 24 percent of SMEs go to “trade”, 20 percent to “professional, scientific or technical services”, 14 percent to “accommodation and gastronomy”, 11 percent to the “construction industry” and seven percent to the “production of goods ”. The remaining 25 percent are divided between “Information & Communication” as well as “Financial and Insurance Services” and other industries.
Where is the shoe pinching when it comes to digitization?
The digital dossier, which was presented by the former digitization minister Margarete Schramböck in December 2018, sees a lot of catching up to do with the digitization of the Austrian SME landscape: In the dossier, which is based on existing and published studies and statistics on the topic, it says: "More than every third SME does not yet consider digital technologies to be of great relevance for their own business model." Euro digital technologies play a "very important role" for their business model.
"Few digital champions"
A similar picture emerges with regard to the investment sums. Austrian industrial companies from medium-sized companies would spend an average of only ten percent of their total investments on digital technologies. In addition, there is a lot of catching up to do in terms of IT and data security, as well as business aspects such as the development of digital business models. It says: "A majority of SMEs are digital newbies or digital conscious, only a few participants in the study stand out as digital champions."
SME focus and roadshow
The brutkasten takes this topic as an occasion and will deal with the digitization of the Austrian SME landscape in a new series. To this end, we are starting a two-month roadshow across Austria on August 29th together with Austria Wirtschaftsservice (aws), Erste Bank und Sparkasse, Wiener Städtische Versicherung and regional partners. The aim is to network SMEs with startups and corporates. The focus is on the exchange of experiences, the presentation of best practice examples from the region and the identification of opportunities for digitization as well as cooperation with other companies. More information on the roadshow will follow in the next few weeks.
=> to the SME Report 2018
=> to the digital dossier
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