SMEs represent 99.8% of Spanish companies, which gives an idea of its importance in the national economy. Specifically, they contribute 65% of GDP and employ 64% of workers.
Faced with this situation, Hiscox, an international insurance company specializing in companies, has commissioned KPMG to produce the 1st Hiscox Report on SMEs and the self-employed in Spain, with the aim of carrying out an X-ray of the SME market in Spain, understanding its evolution in recent years, analyze the opportunities and expose the different challenges they face.
One of the main conclusions of this study is that 50.5% of Spanish SMEs believe that their business will be seen very or quite affected by inflationespecially the manufacturing industry (84.3%) and construction (71.1%), affecting their production and sales costs.
The sharp rise in prices, caused mostly by the conflict in Ukraine, has raised costs worryingly and 61% of Spanish SMEs believe that their production costs will increase, which makes the activity of these companies less and less profitable. In fact, 36.4% of small and medium-sized Spanish companies believe that their profits will worsen, 39.4% believe that there will be a drop in the number of orders due to lack of demand or subcontracting, and 33.8 % believe they will have problems moving forward with the business.
Even so, the general expectations of SMEs regarding the evolution of their business are not perceived as alarming, since 68.5% consider that their turnover will remain the same or will improve and 76.2% believe that employment will remain the same or it will get better, as long as they sacrifice their profit margins.
As for systemic risks, those events whose impact on a company can trigger the collapse of an entire industry or economy, do not cause as much concern among SMEs. Specifically, only 32.8% believe that they will be very or quite affected by the geopolitical instability and 42% think that demographic changes will not have consequences for their business.
Digitization advances among Spanish SMEs
Especially as a result of the pandemic, the majority of Spanish SMEs are in a process of digital transformation and are giving it more and more importance: 47.4% of SMEs have already taken measures to digitize their company and 23. 4% plan to take them.
Among these measures, the most prominent have been the implementation of digital marketing and presence on social networks (61.9%), telecommuting (45.8%) and electronic commerce (40.6%). According to Spanish SMEs, the incorporation of these elements into their day-to-day activities has improved work efficiency by 52.5% and cost savings of 43.5%.
Taking these figures into account, and the fact that 30% of SMEs believe that they will be affected by technological changes, digital transformation is an upward trend among Spanish small and medium-sized companies. In fact, 68.4% of Spanish SMEs have taken or plan to take innovation measures and have invested 18.3% of their annual budget in digital strategy in 2022. For 2023, a growth of 9.3% is estimated, reaching 20% of the budget.
Sustainability and equality, pending issues
Although digitization is gradually penetrating among SMEs, other issues such as sustainability and equality have not yet managed to settle among the Spanish business community. In this sense, 48.8% of Spanish SMEs believe that they will be little or not affected at all by climate change and almost 40% say that the scarcity of resources will not have a negative impact on their business.
This lack of awareness for the environment means that only 25.2% have taken measures to adopt sustainability strategies and that almost half (45.6%) do not plan to implement one. Despite this, 49.4% of Spanish SMEs have incorporated or plan to incorporate some type of sustainable practices, mainly those that affect the environment (70.5%) and, to a lesser extent, practices aimed at social aspects (41.5%) and Corporate Social Responsibility (31.9%).
Although the majority of SMEs do not carry them out, 37.8% of their employees believe that sustainable policies result in a reduction in energy consumption and polluting raw materials and 27.2% that they improve the image and reputation of the company.
Similarly, the adoption of equality and inclusion policies are not on the agenda of Spanish SMEs and 56.6% do not plan to take measures to adopt them. In fact, 79.2% state that they have not registered any equality plan and only 17.1% state that they are in the process of developing one. In addition, of the 20% of those that do have it registered, there is still 12.2% that is not applying it. In addition, 33% of SMEs did not hire any women last year and if we talk about managerial positions, 60% of SMEs did not hire any women.
