THE SME COMPETITIVENESS SURVEY
The ITC's defintion of competitiveness is represented by the SME
Why SMEs matter
The internationalization of small and medium-sized enterprises (SMEs) is
at the heart of the ITC SME Competitiveness Survey (SMECS). SMEs
account for between 60-70% of employment and the majority of new job
creation in most developing countries. They also tend to employ the most
vulnerable segments of society such as the poor, young and women.
However, SMEs suffer from high failure rates and low productivity.
If higher numbers of SMEs were able to survive and grow, the benefits of
GDP growth and employment would touch a broader part of the population
and allow for more inclusive economic growth.
The SMECS enables countries to assess the health of their SMEs by
identifying their strengths and weaknesses. This helps policymakers,
private sector associations and investors make better informed,
evidenced-based, decisions.
To fulfil these goals, the SMECS uses a comprehensive definition of
competitiveness.
SME COMPETITIVENESS: THE ITC CONCEPT THE ITC SME COMPETITIVENESS GRID
Competitiveness Grid. The grid is a tool which classifies the indicators of
firm competitiveness according to pillars and levels of competitiveness.
The pillars of competitiveness
 Compete: This represents the static dimension of competitiveness. It
assesses whether current production is efficient and meets market
requirements.
 Connect: This represents the connectivity dimension of
competitiveness. It acknowledges that to be competitive firms must
link to customers, business, institutions, and be ICT- literate.
 Change: This represents the dynamic dimension of competitiveness.
It assesses whether firms have the capacity to make human and
financial investments to adapt to fast-changing markets.
The levels of competitiveness
 Firm capabilities: This level focuses on whether firms need
resources, and whether they have competencies to manage those
resources.
Competitiveness defined  Immediate business environment: This level focuses on whether
support institutions (e.g. certification bodies) enable firms to be
Competitiveness is complex: dimensions include time, scale, space and competitive by delivering resources and competencies to them.
scope. The ITC definition is independent of firm size, and reflects the  National environment: This level focuses on whether macro-
economic conditions support competitiveness, and whether the
rapidly changing environment in which firms operate:
regulatory environment burdens firms.
“Competitiveness is the demonstrated ability to design,
SME competitiveness themes
produce and commercialize an offer that fully, uniquely and
continuously fulfils the needs of targeted market segments, Each pillar of competitiveness has 4 themes. Themes allow policymakers
while connecting with and drawing resources from the to easily identify where the strengths and weaknesses of SMEs lie.
business environment, and achieving a sustainable return
on the resources employed”.
The definition of competitiveness is explained in more detail in the 2015 Pillars of Levels of
SME Competitiveness Outlook. competitiveness Theme competitiveness
Quantity and Cost
Uniqueness of the ITC concept
Requirements
The ITC concept of competitiveness is unique because its indicators go Compete Time Requirements
beyond focusing solely on firm capabilities or the national environment.
Immediate business environment
Certification and Standards
ITC highlights a third crucial level: the immediate business environment.
This level assess the efficiency of entities such as chambers of Competitors
National environment
Firm capabilities
commerce, trade and investment support institutions, and certification
ICT Requirements
bodies.
Linkages with Customers
Why is the immediate business environment important? Firms need Connect
resources to be competitive, and competencies to manage those Linkages with Businesses
resources. The role of the immediate business environment is to deliver Linkages with Institutions
those resources and competencies to firms. For example, a firm can have
an efficient production system and yet be unable to sell its products, if it is Financing Requirements
unable to rely on domestic certification bodies to issue the relevant quality Skills Requirements
certificates. The SMECS captures critical information on countries' Change
immediate business environments which is not available from other IP Requirements
sources. Innovation Requirements
DATA FOR ACTION NATIONAL OWNERSHIP, GLOBAL VISIBILITY
E TRADE IMPACT
FOR GOOD

After SMECS data is collected, the results are analysed and presented
using charts designed by ITC. An example of such a chart for a
hypothetical country is shown below.

Firm capabilities by firm size

SME
Competitiveness
Survey

ITC collaborates closely with national institutions to collect SMECS

data. This collaboration enable partners to:

The above chart compares firm capabilities of small, medium and large-
sized firms accross all 12 themes. For instance, in “Financial
Requirements”, large firms in the hypothetical country perform relatively
well, but small firms perform poorly. The SMECS is composed of many
indicators. This makes it possible to 'dig-down' and identify exactly where
SME capabilities are lacking. In the bar chart below we show 3 of the 7
indicators which make up the theme, 'Financial Requirements'. From this it
is clear that SMEs don't have sufficient knowledge of the process of loan
applications, many don't have a bank account, and some also struggle to
manage their cash flow. These findings result in a poor score for SMEs in
the financial requirements theme. This analysis can be repeated for the
other themes in the SME Competitiveness Grid.
 Identify their client base;
 Understand client characteristics and needs;
 Design better policies and assistance programmes;
 Benefit from capacity building;
 Provide attractive signals for foreign direct investors.
ITC seeks the partnership of Trade and Investment Support
Institutions. Collected data will be:
 Shared by ITC with the partner institution;
 Adapted to national and/or local needs;
 Collected in such a way as to ensure firm anonymity;
 Made publicly available via the ITC flagship publication, the
SME Competitiveness Outlook.

Financial requirements by firm size Analytical exploitation of the data:

 Will be performed by national researchers, in collaboration

35
with ITC;
Knowledge of loan  Will result in creation of country briefs published by ITC.
application
procedures
45

80
Data for Action

10
Liquidity
30
requirements
57 FOR MORE INFORMATION

About the SME Competitiveness Survey

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Business bank www.intraccent.org/SMECS/
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account
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About the SME Competitiveness Outlook
www.intracen.org/SMEOutlook/
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