Small and medium-sized enterprises

Small and medium-sized enterprises (SMEs, also small and medium enterprises) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits.

The abbreviation "SME" is used in the European Union and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO).

Small enterprises outnumber large companies by a wide margin and also employ many more people. SMEs are also said to be responsible for driving innovation and competition in many economic sectors[1].

Background edit

This learning resource addresses the following objectives:

  • addressing a collaborative infrastructure of SMEs - how can collaboration be designed in way that the benefits of collaboration are shared among collaborators and according to their contributions.
  • how can milestones be defined jointly and how many person hours or person month are assigned to the specific milestones (see also project planning and project management)?
  • How are these costs shared among the collaborative infrastructure of SME? Assign people for specific milestones of development or assign financial resources for the development process and let a subnetwork of the SME network be responsible for the development.
  • What is the licensing model for the products or services the subgroup of network for the whole network of SMEs?
  • How do SMEs provide the benefit for the regions in which they also provide their services (e.g. in terms of employment, participation in product design tailored for that region, addressing a common good, keep e.g. rural communities sustainable, support collaboration for the communities or address a common good, ...)
  • How can customers measure transparently that the SMEs improve sustainability of the communities itself? Can customers setup their own infrastructure to measure if a specific service of SMEs provide a sustainable infrastructure for them? Look at the Sustainable Development Goals and look at your own region and identify how the community can setup SMEs that serve the community needs (e.g. support for elderly people, support for children, ...).
  • Poverty can be caused by a single event (business crash, flood events, ...) or by a business strategies that make the community poorer and poorer over time. How can collaboration in a community and collaborative sustainable approaches with local and regional SMEs avoid that process? Assume an SME provides a product that is environmently friendly, cares for local employment of workers, addresses also common good, ... in comparision with a competitor that does not care and provides the same product for a cheaper price? How can collaboration in the community and with local or regional SMEs help to provide the product with the same price, so that sustainability and other common goods are not sacrificed by other business stragegies?

Learning Environment edit

If you want to create a learing environment, it is good to start in small villages or rural communities with a collaborative spirit and mutual trust. To have a science based approach you could use e.g. the concept of Living Lab and assign sensor networks within the Living Lab that measures long term sustainability. Assign principles of Circular Economy to e.g. energy supply, efficient energy consumption, reduction of carbon footprint together with the community needs and requirements and constraints of SMEs working for and in the community.

Learning Tasks edit

  • (Open Innovation Ecosystem) Explore the role of Open Innovation Ecosystems for SMEs[2].
  • (Appreciation of Failure) "Many SMEs fail". Look for the scientific evidence for that statement! Compare that with the failure rate of projects in large companies (look also at self-assessment of people working in projects, if they regards their project as success beyond marketing a project as success). What are scientific methods to detect the failure and how failure can be transformed into "lessons learnt" that trigger innvoation. Identify how SMEs can share collaboratively lessons learnt and build on the lessons learnt in a collaborative way. For complex problem solving SMEs can operate in network of flexible innovative units that approach the problem from different angles. Design a reward system for SMEs, that appreciates well-documented failure of their business model by certain benefits they get for sharing those documented failure and options of improvement. What are possible obstactles for such a reward system. What is role of wording "appreciation of failure" or "lessons learnt"? How does an economic approach of collaboration differ from humanitarian collaboration (e.g. Collaborative Mapping). Explain, why such a failure must be well-documented by the SME for having a real value for problem solving for a community of collaborating SMEs. Design a legal or licensing framework that allows that SMEs could have a long term sustainable benefit of their own developments.
  • (Outsourcing Product Development) Large companies could have a research and development unit. Testing of different new scenarios or new product designs. The maintenance of research and development units are costly. If large companies buy successful SMEs, then the risk of failure is distributed from the large company to a number of SMEs, which are now responsible for risk of failure of the product design. Discuss this concept in terms of sustainability and in the context Risk Management of product development.
  • (Life Cycle Assessment) Explain how SME can provide local and regional employement and a Life Cycle Assessement for their products in terms of sustainability and offer options for customers for avoiding planned obsolescence[3] and sustainable use of resources.

See also edit

References edit

  1. Wikipedia contributors. (2018, June 8). Small and medium-sized enterprises. In Wikipedia, The Free Encyclopedia. Retrieved 07:05, June 19, 2018, from
  2. Van de Vrande, V., De Jong, J. P., Vanhaverbeke, W., & De Rochemont, M. (2009). Open innovation in SMEs: Trends, motives and management challenges. Technovation, 29(6-7), 423-437.
  3. Bulow, J. (1986) An economic theory of planned obsolescence - The Quarterly Journal of Economics, 101(4), 729-749.