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Time to internationalize

Competition is growing for medium-sized companies. Marc S. Tenbieg, Managing Director of the German Association for Small and Medium-Sized Enterprises (DMB), recommends increasing trade in export.

What companies are considered small and medium-sized enterprises (SME) and what are they focused on today?

Marc S. Tenbieg: For a company to belong to the SME category, it must have up to 500 employees and a maximum annual turnover of 50 million euros. That is the definition of the Institut für Mittelstandsforschung (IfM) Bonn, the institution that guides us as an association for SMEs. Current topics of interest include tax burden, shortages in personnel and technical specialists, enterprise financing and, increasingly, the Transatlantic Trade and Investment Partnership, or TTIP.

Marc S. Tenbieg was elected to the Executive Board of the DMB in 2011.
Marc S. Tenbieg was elected to the Executive Board of the DMB in 2011.

How do you take advantage of the benefits of TTIP while mitigating the risks?

This is a multi-layered and extremely complex question, and ultimately we will have to reach a compromise in terms of give and take. On the one hand, it’s about the oft-cited chlorinated chicken, on the other hand there is a lot being said about social factors such as trade unions, employer rights, and safety and security standards as well as further liberalization of public utilities and educational and health services. We have a lot of controversial discussions ahead of us.

Will this increase pressure on SMEs when it comes to competition?

It certainly will. As we know, competition can be a real energizing factor, but that means that German SMEs will be encountering more pressure on the national market. Many operations will have to be prepared for that. Companies will have to rely on exports more than ever before to ensure that they don’t lose their edge. In the next 50 years, 90 percent of global demand will be outside of the European market.

Should SMEs be racing to internationalize?

Definitely! Large companies and groups are decades ahead of SMEs in this regard. They have large, global networks and know all the rules of the game. A lot of SMEs will have to gain some experience in this area. My advice is that it’s time to internationalize and start thinking in larger terms and dimensions. A good first step, for example, is to begin participating in selected trade delegations. That way you can get a first impression of a particular market in a compact form and start working on building your own small networks – and maybe even start a cooperation.

Does the DMB organize these types of trips?

No, but we can pass contacts and give plenty of tips. In addition to the national and state ministries there are a number of organizations and institutions that offer these types of trips, for example the Euro-Mediterranean-Arab Association (EMA). SMEs need to take these kinds of offers into account.

Which industries are looking good for SMEs at the moment?

From talking with our member companies, I can say that there are currently a lot of branches where things are going well. That applies particularly to the supply industry and the range of specialized solutions. Chemical and medical products are also in high demand. Consultation, design, and engineering services are always classics, followed by solutions for renewable energy sources. Reliability, creativity, and precision are all attributes that continue to be associated with German companies.

What would happen if SMEs were to disappear from Germany?

Our country would be in a completely different position than we can imagine today. It would lose its unique character – it would lose its very soul. Our small and medium-sized enterprise structure is the subject of some envy and our economy is not dependent on just a few large industrial operations, as is the case with many other countries. Ours rests on a number of different major pillars. These pillars aren’t likely to crumble just because of a little wobble. That is how we managed to survive the last big economic and financial crises in such good shape.

Complete the sentence:

If I were Economic or Finance Minister...

...then I would be willing to make unpopular decisions that would result in more justice when it comes to taxes and intergenerational equity.

Without its family-owned companies, Germany would be... a house without a stable structure. It would simply crumble in on itself.

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