In response to decreasing domestic demand, small-to-midsize businesses in Europe are looking to export. However, many of these enterprises are finding it difficult to be globally competitive because of high labor, transport, and real estate costs. Many of these businesses produce equipment used in construction and high costs of production have led to unaffordable prices. To be successful, these companies need to find new export countries and increase their competitiveness.
Many companies are having trouble competing with producers in low-cost production countries like China. Consumers tend to be unwilling to buy more expensive products from small businesses even if the quality is higher. Smaller companies are being forced to find countries that are not being directly impacted by the financial crisis in Europe and whose demand is higher. Domestic markets in countries like Spain, Greece, Portugal, Italy, and Ireland are currently depressed and consumers are unable to afford expensive goods produced by small businesses.
A majority of these companies have had to fire a large percentage of their employees to cut costs. Biossol, a construction company in Greece, has had to do exactly this. The last profitable year for this company was 2008, and since then sixty percent of its employees have been laid off. This company once produced scaffolding, heating units, and air-conditioning units and has since shifted to the production of more tech-oriented water treatment products to meet demand. Other companies are making similar changes in hopes to meet consumer demand and rebound from a span of unprofitable years.
The productivity and success of small-to-midsize businesses can have a substantial impact on a nation’s economy or in this case a region’s economy. Hopefully, these companies will find success in exporting their goods and will be able to help boost the struggling economies in Europe.