Advantages and disadvantages of small and medium‐sized businesses (SMEs) in the bio economy of Europe and China

SMEs of Europe:

SME Europe (Small and Medium Entrepreneurs Europe) is the official business association with the function of defending the interests of small and medium sized enterprises at European level. The organization founded in May 2012 and it was done by the three Members of the European Parliament, Paul Rübig, Nadezhda Neynsky and Bendt Bendtsen. Talking about the European Commission’s definition of micro-, small and medium-sized enterprises, it is established according to the no. of employees and the annual turnover or balance sheet:

(Turnover is the money taken in a particular period, and balance sheet is a statement about the assets of a company)

At micro-enterprise:  10 employees and an annual turnover/balance lower €2 million.

At small enterprise: less than 50 employees and an annual turnover/balance sheet lower than €10 million.

At -sized enterprise: less than 250 employees and annual turnover below €50 million/ balance sheet under €43 million.

Biotechnology is these days most ground-breaking technologies and is a substantial driver of economic growth in the bio-economy. We are now able to make bio-based products in more economical and efficient and maintainable ways. SMEs working in the field of biotechnology, which are lacking much of the innovation and occupation creation taking place in Europe, are among those gathering the budding of the bio-economy. It shows that some firms are in worry only about science; as the survey enquiries into firm-level assessment of external actors, the significance of Federal over local – regional initiatives be prominent. 

While states are participating to promote biotechnology clusters, the lack of professed importance of state/local level efforts to innovators is of particular significance. The disconnect between policymakers and SMEs. Farmers point out the indirect effect of public opinion in sustaining the business of agro-bio. 

There are questions about gaps in our understanding of the relationship among firms (innovators), workers (farmers who are the traditional innovators), and the government (regulator – facilitator) in the biotech industry. The need to involve other partners (food companies, wholesalers, retailers, consumer groups) in considering the panorama of agro-bio is obvious.

Disadvantages:

• ·    the legal and the administrated environment that the internal market creates is some time difficult to face and it is also due to the product’s globalization. 
• ·         lack of training and management skills as the qualified associates have.
• ·         find difficulty in funding difficulty
• ·         to have access to the world technology
• ·         have to depend on their own efforts for being popular in single market.

Advantages:

• Single market which allows the free drive of goods in the any country
• SMEs of Europe are advanced technologically
• Middle-class can raise income level, as Europe works to make policy to allow business to grow and there competitive.                                    
• SMEs of Europe are equipped with green technology and so it plays role in global economy.

SMEs in China:

The meaning of SME in China is most normally in light of the quantity of representatives that more often than not with less than 500 workers; In China, the meaning of a SME is intricate, which relies upon the business classification and in view of the quantity of workers, yearly income and aggregate resources, and this criterion on little and medium-sized ventures depend on the SME Promotion Law of China (2003), which sets the rule for characterizing SME's.

 The applicable size of the SMEs is fundamentally littler than the extensive and recorded organizations in China due to the extent of their capital stock, credit allowance. Be that as it may, as of late, some SMEs have become extremely vast in estimate because of their ceaseless change and mechanical enhancements.

 Small activities additionally make up enormous extent of SMEs in China which generally do not have the level of specialization and collaboration in the generation regions. This is fundamentally because of the way that there is absence of government enactments that backings and shows rules for SMEs in China.

Disadvantages:

Mu (2002) expressed that SME financing is an issue everybody on the planet, in any case, it is even significantly harder to back SMEs in China because of a few reasons. Liu recognized and proposed two principle purpose behind the challenges in financing SMEs in China which are the accompanying:

Access to both inner and outside sources of finance:

As said by numerous analysts, SMEs need access to outer financing because of political reasons, or essentially because of the way that they don't meet the necessities of the outside financing. The challenges in acquiring credits from the neighborhood banks is another troubles as the measure of the advance required by SMEs are genuinely little and immaterial for state-possessed business banks, thusly, banks more often than not lean toward issuing advances to substantial and recorded organizations, additionally.

Because of genuinely youthful age, understanding of SMEs in the commercial center, banks expect that the level of hazard in defaulting their installments is extremely high for SMEs contrasted with other bigger organizations in China.

Structure of the finance related structure:

Fontes (2005) states that China needs sufficient credit framework that backings the financing of SMEs because of the structure of its budgetary framework. All substantial banks are state-possessed or even the ones which are private have are emphatically controlled by the administration as the administration holds over 95% of the stores in those banks either specifically or in a roundabout way. 

In addition, these banks, because of strict controls and mediation by the legislature, require extremely high FICO scores. This makes additional weight for SMEs in China as they cannot generally meet these high FICO assessments.

Advantages:

Tax cuts: the structural tax is reduced that boast vitality and nurtures small scale business.

Financial aids: small credit firms give loans so this helps small business