July 31, 2013
Economic diplomacy means using all resources, including the financial, intelligence, creative or other ones in order to increase the „ added value” of a national economy. By „added value” I mean diversity, profitability, openness, competitiveness, technological performance, labor force inclusion and better training, at the same time its adaptability and flexibility in the labor market, and many other aspects, some of them related to the economic patriotism, such as exporting national values and their imposition through competitiveness.
As we all know, SMEs are a very important part of a national economy. They even represent its backbone, although this concept has slightly become a cliché close to fading away. But it fades away only when it remains at the stage of intent. When statements are joined with actions, the phrase itself becomes a goal.
A very interesting project of this area is an initiative brought up by the British Romanian Chamber of Commerce together with UKTI (United Kingdom of Trade and Investment), this initiative being related almost exclusively to increasing role of SMEs in the UK.
Simply, by economic diplomacy.
The project now arbitrarily called “Romanian-British Business Center”, what does it mean?
It is arbitrarily called because it is a provisional designation, who may find another shape. In fact, the project refers to creating a complex institutional platform in order to support the British SMEs expansion towards other markets. It is precisely what I have been asserting since long ago as a necessity for the Romanian SMEs.
How is it done?
For starters, 20 worldwide “lead markets” were chosen. They were chosen by looking mainly at a very important indicator: their development potential. Among the targeted markets there are: Mexico, Russia, India, Brazil, China. In Europe, only two countries were chosen for this project, namely Romania and Poland.
Romania’s inclusion in this project is an undisputed success that must be attributed to the British-Romanian Chamber of Commerce.
What precisely does it aim at?
As H.E. the British Ambassador in Romania stated, in its first stage the project aims a 60% growth in British exports and investment in Romania. Thus, the Romanian-British Business Center has, in the most practical way, a role in facilitating the access of UK companies, who want to invest or have commercial relations with Romania.
In this context, the BRCC – British Romanian Chamber of Commerce – role increases considerably. The Chamber’s business expertise will be offered mainly to the British SMEs on various segments of interest: legal and financial consulting, market research, promotion, purchasing etc. Thus, through a flexible and intelligent formula, all potential British investors or traders will be closer to the market; they may have faster reactions, better quality of information so that they can properly decide, benefiting from the Romanian market opportunities.
Of course this model can be one of inspiration for the Romanian SMEs, but not entirely. It can rather be a motivational model.
Because the two economies’ reality and the development of the British SMEs are different from the development of the Romanian ones. If the British support their SMEs in order to keep them alive, we should support our SMEs in order to create them. According to the best case scenario, we can support their increase.
When speaking about the Romanian SMEs we need to understand a simple fact that generates a similarly simple strategy. The biggest “share” of value produced by the SMEs is actually created by the medium size companies, not the small ones. Thus, in order to increase the segment as a whole, we have to support the middle segment to reach the large one – from the second M to the third M. The small segment must be supported to gain access to the medium one – this is actually the greatest achievement, going from the first M to the second one, creating prerequisites for the birth of other small businesses – the start-ups. This process is actually a circle that must constantly be spun and restarted.
It seems easy at first sight, but how can we do this?
If we all agree that miracles do not happen overnight, then we will understand that the successful key lies in each constructive measure or initiative included in a medium and long term smart strategic plan. And most importantly, this should be an implemented measure or initiative.
The SMEs’ support for their presence in emerging and dynamic markets, that may or may not belong to the European community, fiscal levers – especially those related to investment and labor cost, including its training, specialized regional domestic markets creation- support for certain key and high potentially sectors such as tourism, manufactured and hand-made products, agro-food production, etc., to name just a few of them. Creativity will bring forward other solutions. We should start forgetting about “master Manole” myth. Romania has an urgent need for a strong middle class and for an important labour segment. A dynamic, performing and creative middle class. An important, specialized and trained labour force in order to make things happen.
Romanian businesses, whether small, medium or large, can ensure this goal. But for this step we need a domestic capital culture and, last but not least, an entrepreneurship culture and spirit.
Eventually the British model could be taken into account. But not only this one. There are numerous patterns. The most important thing is getting all the best features in each one and integrating them into a plan to be followed later.
Author : Adrian Marius Dobre