Sebastian Kreis
Co-Founder & Co-CEO
Xepelin

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Expert Contributor

The synergy that exists between large corporations and SMEs

By Sebastian Kreis | Wed, 07/20/2022 - 15:00

When we talk about the power of companies and their impact on the economy, our minds almost automatically go to the big corporations: global companies that we all know and recognize. Without a doubt, their contribution and success are irrefutable. It is a fact that for many decades, the traditional model preserved and encouraged the growth and permanence of this type of company.

Now, as the acceleration of digital transformation has done its part, SMEs have the opportunity to innovate. SMEs are being increasingly creative and challenging paradigms, working to give rise to a more inclusive and equitable economy. As we know, SMEs are important for many reasons but the first thing to remember is that they are collectively the “engine” of almost all Latin American countries. This is particularly true in Mexico, where they represent more than 52 percent of Gross Domestic Product (GDP) and employ about 70 percent of the labor force.

SMEs also play a fundamental role in the value and supply chains for large companies throughout the region. As large companies scale, they depend on SMBs and subsequently their impact on the economy is strengthened. A strong company generates a greater number of jobs; in turn, it expands its network of connections with other small businesses and helps build a more robust economy.

In this way, small and medium-sized companies increasingly become a key element for the success of all companies, as they wear multiple hats in the economy: they are suppliers, clients and partners of large corporations, as well as businesses that are successful in their own ecosystems. In our country, more than half of the companies are focused on selling to other companies and these B2B SMEs become more sophisticated every day as their clients are constantly raising expectations. For example, when Airbus makes an airplane that is 20 percent more fuel-efficient using cutting-edge materials, all their suppliers need to raise the bar to make it happen.

The role of technology in the evolution of SMEs cannot be understated; it is very likely that SMEs would not have been able to take opportunities that used to be only available to giants without it. The breadth of the picture encompasses entering new markets, devising and marketing new products, enriching the supply chain and, of course, becoming more efficient administratively and financially.

The increasing use of technology by B2Bs is not only limited to technical and manufacturing challenges but can also enhance business strategies and internal processes. Faster, leaner businesses are more competitive, disruptive and ambitious. Smaller companies have one major advantage in their favor: they operate faster. This allows them to innovate and change direction very quickly, which makes them great adopters of new technology.

SMEs have the potential to thrive in today's marketplace. Today there are more opportunities to help them prosper and increase their life expectancy, which in Mexico is only five years, according to INEGI indicators.

Today, there are software tools developed with the sole purpose of facilitating their operations, improving relationships with their customers and suppliers, accessing financing, improving their finances and thereby facilitating their growth.

Without small companies, large companies could not prosper as they do and vice versa. Understanding the value of these business ecosystems is strategic to all parties involved.

 

Press contacts:

Karla López, PR & Communications lead: karla.lopez@xepelin.com

Ana Romero, ETC México: analilia@etcmexico.com / + 722 410 6193

Photo by:   Sebastian Kreis