Iii c - welter surviving the venture start

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The upgrading of workforce skills is key to the competitiveness of SMEs. In today’s business environment there is a premium on innovation that enables firms to develop new products and services, new production processes and new business models. This requires both in-house innovation and the ability to absorb knowledge from other firms and organisations, both of which call for a skilled labour force. Skills are also a critical but understated resource for entrepreneurship seen in the sense of business creation. Similarly to workforce skills, entrepreneurship skills will boost the competitiveness of local businesses thanks to the improved strategic and management competences of the entrepreneur.

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Iii c - welter surviving the venture start

  1. 1. Surviving the venture start:skills for continued entrepreneurship Friederike Welter Jönköping International Business School www.jibs.se © Jönköping International Business School
  2. 2. www.jibs.se© Jönköping International Business School
  3. 3. Crisis reasons in German SMEs (Heinemann2007)Management mistakes 75,7 % / 165 UNLow level of bank financing 44,0 % / 96 UNEconomics or sector reasons 36,7 % / 80 UNOrders not calculated properly 32,6 % / 71 UNDeficient cost accounting 30,7 % / 67 UNIncreasing competition / price pressure - 24,3 % / 53 UNDecreasing demand 23,4 % / 51 UNToo many employees 17,9 % / 39 UNLoss of claims; deficient payment practices 14,2 % / 31 UN - .Lack of re-investments and modernisation 2,8 % / 6 UN www.jibs.se © Jönköping International Business School
  4. 4. Typical crisis development www.jibs.se © Jönköping International Business School
  5. 5. www.jibs.se© Jönköping International Business School
  6. 6. Crisis – Manageable for a SME?• Crisis dynamics: – starting as latent process – often not perceived as threatening for long time – accelerating over time: growing pressure to act during crisis process and simultaneously loss of options for actions – ambigious outcomes – difficult to forecast & to manage• But: outcome influenced by skills and knowledge of management and business owner www.jibs.se © Jönköping International Business School
  7. 7. Four challenges during a businesscrisis• The entrepreneur• The leadership dilemma• Involving stakeholders• Coping with the stigma of failure www.jibs.se © Jönköping International Business School
  8. 8. Main support and policy issues• individual / business level: Does business education and entrepreneurship training also encompass skills for crisis management?• Society: Attitudes towards failure?• Regulatory frame: Does insolvency law allow „planned insolvency“ and restart? www.jibs.se © Jönköping International Business School
  9. 9. Examples of policy initiatives inGermany• Two-stage support for entrepreneurs and SMEs during early crisis stages – Round Tables for SMEs – Turnaround support – public partnership of KfW and chambers http://www.kfw.de/kfw/de/Inlandsfoerderung/Programmuebersicht/Runder_Tisch/index.jsp http://www.kfw.de/kfw/de/Inlandsfoerderung/Foerderberater/Unternehmen_erweitern_und_festigen/Qualifizi erte_Beratung/Beratung_in_Krisen/index.jsp• Insolvency reforms aiming to overcome „stigma of insolvency“ and to faciliate restructuring of enterprises – ESUG – law to faciliate reorganisation of enterprises (2012/13): – 2012 draft, amongst others focus on shortening debt proceedings (from 6 to 3 yrs) www.jibs.se © Jönköping International Business School

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