The news for SME /SMB sector penetration is not good. The effective market penetration of Business Excellence in SMEs / SMBs is less than about 1%.
SME sector penetration in Singapore, for example
In Singapore there are more than 120,000 SMEs. But cumulatively over the past 20 years only approximately 1,000 have benefited from their internationally benchmarked Business Excellence framework (ref: Spring Singapore 29 Oct 2014). In spite of this < 1% penetration, the Singaporean Government is intent on ensuring that the framework remains relevant and impactful into the future.
What about SME sector penetration in Europe?
In 2014, Europe celebrated the 25th anniversary of the EFQM (European Foundation for Quality Management) Excellence Awards, reporting that 30,000 organisations across Europe are actively using the EFQM framework (ref: EFQM Website). This sounds like a lot. But in Germany alone there are some 3.6 million SMEs. The penetration of EFQM implementations across Europe is clearly far less than 1%.
And in the United States?
In the USA, there are 28 million SMBs and over the past 27 years approximately 2 million copies of the Baldrige Model for business excellence have been issued (ref: Baldrige Website). Optimistically assuming that 15% of those organisations have actually implemented the Model – this would represents a penetration rate of about 1%.
Big economic challenge for all OECD Countries
Although reliable data of the above sort is hard to find, this lack of penetration of proven business excellence techniques appears to be a common problem across OECD countries.
Based on the reported numbers of SMEs at least taking the trouble to register their interest in applying national Business Excellence frameworks, the penetration level across the OECD countries appears to be less than that of the United States.
This is serious because SMEs play such an important role in all OECD economies. In most OECD countries they make up over 95% of enterprises and account for approximately 60 per cent of all jobs. In short, no country can continue to have its SME sector languishing in terms of productivity if it is serious about raising its standard of living.
We all suffer from this economic problem which may be summarised thus:
The SME sector in OECD countries constitutes a major proportion of our national economies and yet less than about 1% of all SMEs are taking advantage of proven business excellence techniques!
The flip side of course is that any SME that implements business excellence has a huge competitive advantage over those that do not.
What can we do about it?
If these Posts trigger at least some of the 99% non-participating SMEs / SMBs into taking positive action, that would be good for them and for their local economy. My aim is to help any SME that wishes to take advantage of this tremendous opportunity.
Click here for information on what would be involved should you decide to pursue excellence in your business.