SME SURVEY ON PRODUCTIVITY AND MARKET INNOVATION

The third study carried out in our project focused on productivity and market innovation in the food and drink SMEs. It focused on searching for shared challenges, considering the interregional character of the FRIDGE project. The study was conducted as an online survey for SMEs, consisting of four sections of questions about company profiling, productivity drivers, governmental support for innovation and the market innovation itself. Our six project partners took care of distributing it between the SMEs from their regions - 20 from each of the regions to a total of 120. This allowed for an equally balanced result.

Profile of the SMEs

The majority of our respondents (73 %) were running a family businesses, having 12 employees on average (but 69 % of companies have less than 10 employees) and a yearly turnover of less than 500 000 € (58 %). Their main customers are the consumers (33 %), followed by wholesalers (24 %) and local distributors (22 %). The average age of the interviewed companies is a stunning 26 years. Roughly one third (32,5 %) of the respondents have experience with export activities. Foreign sales contribute to 24 % of their turnover on average.

Bottlenecks and barriers

The biggest bottlenecks of productivity shared between all regions are (in order of importance): access to financial resources, pricing & payment conditions, the scale of production and workforce skills.

As for barriers to market innovation, the most significant ones across all regions were financial, institutional, and industry-related barriers. Companies were also asked what regional governments could do to stimulate innovation. In their opinion, the provision of subsidies is the most important, however marketing support towards the retail/distribution sector and towards consumers/customers is perceived as almost equally important. Thanks to these answers, local authorities could develop a plan for how to best answer the needs of local entrepreneurs.

Recommendations for SME support

Bottlenecks and barriers should be mitigated in order of their importance to make sure that help can come quickly exactly where it is needed the most. Therefore, local governments of partnering regions should focus on providing subsidies aimed at the development of R&D, staff training and investments in infrastructure to lower costs of production.

Second, local chambers of commerce and regional institutions should provide marketing support, especially towards the retail/distribution sector, which could help small food manufacturers to gain momentum and increase production levels.

Third, as a culture of cooperation is missing in many of the partner regions, these local institutions should put the utmost effort to stimulate networking between food companies and knowledge institutions, as well as providing training in related areas to local entrepreneurs.

Further info

You can find the full PDF-report about the study here: FRIDGE SME Survey - Challenges in the food industry.