Building Resilience in the EU Entrepreneurship Agenda

This essay was submitted to the European Commission SME Week Youth Essay Competition, in which it was awarded a place at the SME Week Finals.

SMEs are of a great importance in the European landscape, accounting for over 99% of
European businesses and representing a wide variety of sectors such as hospitality, tourism,
travel, retail, IT, food service and manufacturing. COVID-19 has highlighted the weaknesses
of many SMEs, with over 90% of SMEs reporting a decrease in turnover since the beginning
of the pandemic (SME United, 2020). Whilst in recent years, emphasis has been placed on
the sustainability of SMEs in an increasingly globalised world, the current pandemic has
shifted the emphasis to concentrate on the resilience of SMEs. Broadly speaking, resilience
refers to the ability to manage adversity, which in the context of SMEs, refers to the ability of
an organisation to avoid, absorb, respond to and recover from situations that have the
potential to threaten their existence. In the current climate, this includes increased global
competitiveness from globalisation, technological advancements, shifting consumer
demands and environmental or ecological disasters, such as COVID.

Whilst resilience and sustainability are the new buzzwords on the block when discussing
SMEs and enterprise in Europe, they interconnectivity between the two concepts is scarcely
explored. In order to be resilient, an organisation must be able to withstand adversity and
change, whilst to be sustainable, an organisation must be able meet the needs of the
present without compromising the future. When discussing these terms, we often think in
terms of how an organisations internal environment operates, such as its ability to withstand
structural change or financial hardship – which makes connecting the two terms difficult. To
be resilient is to be preparing and managing for every hardship – making decisions quickly,
therefore focusing on flexibility as a core element of strategy. To be sustainable means
devising strategy based on longevity of the brand, thus, investing in sustainability in the longterm can hinder flexibility of response to challenge in the short term.

From the start-up stage, sustainability is seen as an afterthought for many SMEs, with the
focus being on profits, revenue and business growth. This is because sustainability is seen
as a long-term investment that often lacks short term returns, meaning for an emerging
entrepreneur, investing in sustainable is less attractive. Further to this, many traditional
entrepreneurship education programs, such as MBAs, business degrees or extra-curricular
training programs, tend to leave sustainability off the agenda, or leave it as an elective or
afterthought. This lack of emphasis at the start-up, or grassroots stage, means many
entrepreneurs do not begin their entrepreneurial journey with an understanding of the value
of sustainability for long-term strategy, and therefore, tend to neglect it within their SME.
The current motto of the COVID recovery is to ‘build back better’, by placing sustainability
and the environment at the forefront of our social and economic recovery. For a more
resilient Europe, building back better looks incentivising the private sector and SMEs that
operate within it to prioritise the SDGs in their work, whether this be through auditing their
supply chain to ensure decent employment for all, or assessing their environmental impact to
ensure clean water and land. Currently, there is a disconnect between the SDGs and
businesses, with the SDGs being seen as something for governments and councils to
prioritise. However, as COVID has demonstrated to us, private sector interventions (such as
firms shifting production to produce PPE to cover the shortage, and further expanding to
produce environmentally friendly PPE) can have just as much of a positive impact, if not
more so, than government intervention.

Whilst many more experienced SMEs may be set in their ways in how their sector, industry
and organisation work, the COVID pandemic will see many young entrepreneurs emerging
due to a lack of employment opportunities. In the past five years, EU policy has concentrated
heavily on youth entrepreneurship, both as a mechanism for diversifying and advancing
economic activity and as a solution for youth unemployment. In the previous youth strategy
(2010-2019), enterprise and employment were two of the eight targeted youth strategies,
and fostering youth entrepreneurship is highlighted as one of the objectives of the Europe
2020 strategy, as well as its Youth on the Move flagship initiative. In order to build back
better, existing EU policy needs to target this emerging group by advancing the scale and
scope of existing enterprise education, both in further and higher education institutions and
in external organisations, such as NGOs and informal training groups, and increasing access
to this training through investment and innovation within the field.

To centre sustainability (and thus, resilience) at the forefront of entrepreneurship education,
EU policy needs to outline a framework of a sustainable entrepreneurship program, that not
only focuses on profitability and growth as core targets of the business, but alignment and
achievement with the SDGs. Training aspirational entrepreneurs on the values of the SDGs
and the impact these goals can have on a businesses value, due to shifting consumption
demands for more ethical businesses, as well as the value in being an ethical and
sustainable business, will have a longer lasting impact on the long-term resilience of SMEs
in Europe than any financial intervention or incentive proposed. This includes working with
successful social enterprises across Europe to create a toolkit for enterprise educators,
connecting businesses and education providers, and working with non-profits within the field
of sustainability and the SDGs to shift existing enterprise education programs towards
sustainability orientated curriculum. A universal framework, implemented alongside EU SME
policy, would provide aspiring entrepreneurs both old and young with a toolkit on how to
incorporate sustainability at its core, in a way that aligns with the SDG ethos of what
sustainability truly looks like.

To create a new generation of sustainable, and subsequently resilient SMEs, EU policy
needs to focus on entrepreneurship education policy to ensure sustainability is at the root of
all business movements. Entrepreneurs are not made over night, but through years of
experience, education and skills development. Young people across Europe are becoming
more interested in entrepreneurship as a viable career path, with a growing interest in
extracurricular enterprise training programs and schemes, with many young people starting
up their own ‘side hustles’ and enterprises during lockdown as a source of income. Providing
young entrepreneurs with a roadmap or framework to being a sustainable entrepreneur not
only encourages those on the receiving end of the training to centre sustainability in their
business strategy, but also incentivizes more mature SMEs to re-strategize in order to keep
up with the growing demand for sustainability, which further aids in building back better.

SME United, 2020. The Economic Impact of COVID-19 on SMEs in Europe, Brussels: SME United.

Published for the European Commission SME Week 2020

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