Belgium has been called the “Land of SMEs”.
Indeed, small and medium-sized enterprises (SMEs), defined as companies with less than 250 employees, account for 99.8% of businesses in Belgium. They generate 63.2% of added value and 68.8% of private sector employment.
The flip side of this is that large companies (referred to as multinational corporations or MNCs), which represent only 0.2% of businesses in Belgium, create nearly one third of employment and added value.
In the public discourse, it’s often expedient to oppose small companies against large ones and valorize SMEs over MNCs. A new report, published by the Federation of Enterprises in Belgium (FEB-VBO), dispels this false dichotomy and puts the relationship between different sized businesses in its proper context.
Large companies and SMEs form an ecosystem and are strongly dependent on each other – a view shared by 75% of the survey respondents. It’s not a choice between one or the other; it’s both together.
This is further evidenced by the sales figures: SMEs and MNCs do approximately €110 billion worth of business with each other every year in Belgium. “A substantial portion of the added value and employment generated by SMEs depends on their relations with large companies, and vice-versa,” writes FEB-VBO.
💬 "SMEs and large companies [in #Belgium] are very dependent on each other... A substantial part of the added value and jobs in SMEs depends on their [commercial] relationship with large companies and vice versa."
— AmCham Belgium (@AmChamBE) May 18, 2021
They are collaborators and partners, not competitors in a zero-sum game. 93% percent of the survey respondents recognize the importance of relations between different sized companies. A full 47% say these relations are “essential” or “vital”.
It’s little surprise then that 68% of survey respondents say relations with other companies make their business stronger. There are many reasons why companies choose to do business with a larger or smaller firm: they may need a particular product or service, access to a specific resource or skill, etc.
In the report, FEB-VBO identifies complementarity as the basis for good collaboration between SMEs and MNCs – meaning a relationship which creates value for both partners.
What does each side bring to the table?
While small companies are fast and flexible, large companies have a wealth of expertise and experience to share. While small companies are able to react quickly to the market, large companies have the financial means and R&D capacity to quickly achieve economies of scale. While small companies are seen as innovative and entrepreneurial, large companies have credibility.
“By combining these forces, SMEs and larger companies would be better able to innovate. The know-how developed through this relationship enriches the SME, the large company and also the other companies with which they work in turn – a true virtuous circle.”
It’s not all upside, however. FEB-VBO acknowledges some of the potential risks in pursuing collaboration between different sized companies, such as overdependence and organizational culture clashes, but they also propose common sense solutions.
It’s time to lay to rest this tired idea that small and medium-sized enterprises and multinational corporations can be neatly separated and played off against each other. This perspective does not reflect reality. What FEB-VBO has shown is that large and small companies are bound together in an ecosystem, intertwined and interdependent. Where they complement each other, the differences between SMEs and MNCs can be the foundation for fruitful collaboration. Let’s give them each their due!
About the author
Maud assists the policy team and the Committee members in their mission. Before joining AmCham Belgium, she worked and lived throughout Europe and China, which built up her interest in sharing and learning from others.