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Companies & Industries
Lesson No. 75

Unity in Adversity: The Collaboration Solution for Crafters, Small and Mid-size Enterprises

by Sandra Siebenhüter

Crisis As Opportunity

Energy crisis, inflation, skills shortage, supply chain disruption: these four apocalyptic horsemen are putting the traditional logic of fiercely competitive markets to the test. With this radical transformation of market conditions, the logic of competition that has prevailed for decades is leading craft enterprises with regional roots and small and mid-size enterprises onto a treacherous path and downward spiral. The present economic and social problems should be an impetus to rethink the concept of the independent entrepreneur. From this perspective, the current crisis opens up windows of opportunity and spaces of possibility that can generate new regional patterns of collaboration which can be for the benefit of all.

However, small enterprises and craft businesses are under severe pressure, because they may lack access to the human, organizational and financial resources needed to make their businesses fit for the future. One possible and realistic solution is to bundle individual expertise and specialized knowledge and to procure resources together, collaboratively. This could be via regional advertising, purchasing alliances, a joint personnel pool, but also through shared management and process support. The reality to date, however, is that crafters in the same trade usually compete for both customers and qualified experienced personnel. But when traditional paths are blocked, real entrepreneurs can come up with novel solutions

Local and Regional Cooperation

Practical successful cases in the craft and agricultural sector illustrate that collaboration is possible: Things can be done better if efforts are made to promote local and regional cooperation among like-minded people. Fierce competition may lead to greater efficiency in the long-term for the national economy, or so it is claimed, but what is at stake now is the short-term survival of as many SMEs as possible – through networking and resource sharing. A shared startpage on the web can be a first building-block to make smaller firms visible to customers and to job seekers across the region and can also establish and strengthen the regional loyalty of local citizens to local businesses.

Making Local Solidarity Visible

The prosperity we have achieved today is the result of decades of economic growth. But today, the prevailing liberal-market model has reached the limits of many businesses. The transforming market environment is forcing entrepreneurs to radically adapt their business models. New business ideas such as cooperation, mergers, specialization or innovation are gaining pace; these may still need to be thought through and tested. Like many small and mid-size enterprises, craft businesses usually have regional roots. This has entrepreneurial advantages such as customer proximity, trust, customer loyalty and low logistic costs. If several regional businesses join together to form a cooperative, they can continue to benefit from this package of advantages and are then in a better position to adapt to changing market conditions.

Municipalities, regions and other business-related institutions are called upon to invite their local SMBs to form new cooperative and collaborative ventures. Even under competitive conditions, solidarity-based action can succeed when it becomes clear where added-value can be shared. This can be turned into a win-win scenario. Regional economies can be strengthened through attractive job opportunities, higher visibility of local business services, and through cross-company offers, so that small businesses may also benefit from technological progress. Opportunities to prosper in society should be available to all, and that includes craft businesses and small and mid-size enterprises.

Unity in adversity benefits one and all.

 

This is a summary of a German essay from www.managerismus.com
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