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.

1. Surviving the venture start:
skills for continued entrepreneurship
Friederike Welter
Jönköping International Business School
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3. Crisis reasons in German SMEs (Heinemann
2007)
Management mistakes 75,7 % / 165 UN
Low level of bank financing 44,0 % / 96 UN
Economics or sector reasons 36,7 % / 80 UN
Orders not calculated properly 32,6 % / 71 UN
Deficient cost accounting 30,7 % / 67 UN
Increasing competition / price pressure
- 24,3 % / 53 UN
Decreasing demand 23,4 % / 51 UN
Too many employees 17,9 % / 39 UN
Loss of claims; deficient payment practices 14,2 % / 31 UN
- .
Lack of re-investments and modernisation 2,8 % / 6 UN
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4. Typical crisis development
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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
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7. Four challenges during a business
crisis
• The entrepreneur
• The leadership dilemma
• Involving stakeholders
• Coping with the stigma of failure
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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?
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9. Examples of policy initiatives in
Germany
• 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)
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