ABSTRACT. This paper makes an assessment of the homo-
genous approach and policy measures towards SMEs, adopted
White Paper on Growth, Competitiveness and
and by national policies in Greece. It is demon-
strated that there is a key distinction between the structure of
competitive, high-tech, highly-specialized SMEs in advanced
countries, whose size is determined by the size of the inter-
national niche market where they compete, on the one hand
and on the other, SMEs in Greece or in other less developed
member-states, whose (micro) size is determined by the local
markets they serve, while in most cases they do not have the
marketing skills/approach to address export markets. Copying
successful instruments for SMEs in advanced countries can
thus be most dangerous for the less developed countries, since
the industrial organization of the typical SME is very different
from those SMEs in Northern Europe. Therefore, the effects
of policy measures, without further modifications, will be
different from those envisioned by the EU policy-makers.
Increasing the utilization of assistance by SMEs in less
developed member-states is likely to be more effective if the
assistance focuses on incentives and services, which support
cooperative action in local and foreign markets, rather than on
direct SME financing.
It is widely recognised today, that SMEs represent
the ‹‹backbone›› of the local economies in Europe.
The White Paper on Growth, Competitiveness and
considers that the full promotion of
the Internal Market Programme depends on SMEs,
which represent the “moving force of growth” and
the only possibility to increase the competitive-
ness of European manufacturing. SMEs contribute
to more than two-thirds of employment (70.2 per
cent) and turnover (70.3 per cent) in the Union and
between 65 to 85 per cent of the total value
The economic and social role of SMEs is even
more significant in the case of less developed
member-states. In Greece, for example, SMEs
account for almost the total employment (91 per
cent) in the non-primary sector, while in Portugal
and Ireland the shares are also very high (82 per
cent and 78 per cent respectively).
The White Paper refers to SMEs in a rather
general way, without distinguishing them accord-
ing to their specific characteristics among the
countries in which they operate. This issue is
examined in the framework of political and social
cohesion. National policies in favour of SMEs are
in line with EU homogenous policy measures. It
is, however, possible that SMEs in Greece as well
as in other less developed member-states be struc-
turally very different from those of SMEs’ in
Northern Europe and therefore, they might require
a special approach based on these differences.
The purpose of this paper is to highlight the
economic importance and special characteristics
of Greek SMEs and to stress the need for a more
diversified approach and policy measures to be
taken. Section 2 analyses the role of SMEs in the
Greek economy, while section 3 discusses some
of their particular characteristics, namely average
size, natality and mortality rates, productivity and
research and development, marketing strategies
and relationship to the underground economy.
Sections 4 and 5 review the recent EU and national
policy measures in favour of SMEs, while section
6 offers some conclusions.
The White Paper on Growth, Competitiveness
and Greek Small
and Medium Sized Enterprises
Small Business Economics 11: 201–214, 1998.
1998 Kluwer Academic Publishers. Printed in the Netherlands.
Final version accepted on July 2, 1997
University of Athens
Department of Political Science and Public Administration