Financing Swedish Small and Medium-Sized Enterprises: Methods, Problems and Impact

Small and Medium-sized Enterprises (SMEs) are the seeds for a vital entrepreneurial economy. The Swedish SMEs, in particular, are very important for the future development of the Baltic Region. Financing these firms is an issue of great significance and a subject to care for. In this paper, we looked at established financing methods for Swedish SMEs. We also analyzed the impact of these methods on firm survivability using the Survival Index Value (SIV) model. The SIV model is a new tool to evaluate small firm performance, introduced recently by Dr. Adli Abouzeedan. Keywords: Small and Medium-sized Enterprises, SMEs, SIV model, Financing, Debt Financing, Equity Financing, Banks, Factoring, Disintermediation, Venture Capital, Angles, Swedish, Sweden, North Europe, European Union, EU, Baltic Region

SME Performance and Its Relationship to Innovation

Current SME performance models suffer from a number of disadvantages. The models use intensively a business ratio approach, they look at SMEs as a homogenous group, they consider firms to be closed systems, they do not directly incorporate the impact of an enterprise’s innovation activities, and finally they are complex and rely on sophisticated statistical refining methods making them unpractical to use by SME managers. There are four major challenges when one tries to build SME performance models that lack these deficiencies. The first challenge is that the desired performance evaluation model must optimally incorporate both quantitative and qualitative input. The second challenge is that the model must incorporate non-financial input parameters, such as firm size and age (among others), in the performance evaluation models. The third is that the model must consider the variety of SMEs as concerns their business sectors, nationalities, sizes, and ages. The final challenge is that the model must be able to utilize existing limited information available from the SMEs bookkeeping practices in an optimal way. The thesis addresses three questions related to constructing a better SMEperformance model, namely (1) What are the advantages and disadvantages of the existing models used in evaluating SME performance? (2) What characterizes a comprehensive model for measuring SME performance with acknowledgement of the firm’s innovation activities? (3) How can a firm’s innovation activities be enhanced in relation to the firm’s external environment? To construct a model that copes with these challenges, I used a literature-based selection of parameters as well as a theory-based selection. I used both a conceptual approach and an empirical approach to discuss and propose a model, the Survival Index Value (or SIV) model, as an alternative to the existing performance models for SMEs. The major contributions of this thesis to the field of SME performance can be summarized in three outcomes: the SIV model as a new model of SME performance evaluation, the ASPEM as a new tool for strategic utilization of SME performance models, and a new approach to account for innovation in relation to the external environment of the firm using the IBAM tool. The work adds to the theory of the firm, as it presents a new way of evaluating firm performance. It also contributes to bridging the theory of the firm to organizational theory, by elevating the significance of networking and its impact on SME efficiency

Innovation Balance Matrix: an application in the Arab countries

Economies have different levels of entrepreneurial activities depending on the availability of tangible as well as intangible resources. In their working paper, Abouzeedan and Busler (2004) established a new type of capital, adding up the components of the most important types of capital. These are the human capital, financial capital and the system capital. In that paper, the two researchers defined each of the components and explained what they meant with those terminologies. They called this new type of capital, innovation capital. The two researchers have argued that innovation capital can be used as an indicator for the degree of richness of the entrepreneurial environment in a region and thus the general character of the economy. They also introduced the Innovation Balance Matrix or IBAM as an analytical tool to classify economies based on their entrepreneurial conditions. In this extended work, they have used this analysis and tried to apply it to Arab countries using a general knowledge and deductive approach to the issue. They conclude the paper with some recommendations as how to enrich the innovation capital in that region.human capital; financial capital; system capital; innovation capital; innovation balance matrix; IBAM; Arab countries; Middle East; entrepreneurship.

ASPEM as the New Topographic Analysis Tool for Small and Medium-Sized Enterprises (SMEs) Performance Models Utilization

Quantifying and measuring small firm performance is vital in our understanding of how internationalization influences firm performance. That is also important when attempting to grasp the mechanisms of the internationalization processes. There are few methods used for the evaluation of performance of Small and Medium-sized Enterprise (SMEs). These methods can be either macro or micro economic in nature. Hazard Modeling, Stochastic Models, and Learning Models are examples of macro economic models while Z-Scores, ZETA-Scores, Neural Networks, and the SIV ® model are examples of micro models. Choosing the most suitable performance model is an essential step in order to maximize our knowledge in relation to firm performance. Utilizing SMEs performance measures without thinking about the category of model, will bias the outcome of the majority of SMEs studies. However, using firm performance diverse models in an efficient manner requires strategic thinking. In this paper, we are re-introducing a tool that can accommodate that aspect. Abouzeedan (2002) designated the new tool: the Arena of SMEs Performance Models or an ASPEM diagram. The horizontal axis in the diagram indicates the Information Intensity Requirements of the model. The vertical axis indicates the Coverage Intensity of the model varying from an individual firm up to a whole group of firms. By allocating each of the SMEs performance models, at the suitable region of the ASPEM Diagram, researchers can better build a sound strategy for the application of these methods. Copyright Springer Science + Business Media, Inc. 2005arena of SMEs performance models, ASPEM, SIV ® model, Zeta-scores, ZETA-scores, neural networks, stochastic theories, hazard modeling,

Innovation and entrepreneurship – new themes for new times

Throughout history, innovators and entrepreneurs have had a tremendous impact on development, exploration, trade, education, science, and integration. During the 20th century, innovation and entrepre-neurship have been regarded as key drivers in technological progress and productivity development worldwide. New radical innovations from new fields of knowledge such as information and communication technologies and biotechnology have emerged to influence everyday life for most people. Realizing this, policy makers as well as individuals argue that innovative and entrepreneurial change processes need to be further implemented on the micro as well as macro levels in society (Abouzeedan, Busler, & Hedner, 2009; Busenitz, Gomez, & Spencer, 2000). The study of innovation is therefore likely to be an increasingly important topic in, for example, economics, business, entrepreneurship, tech-nology, engineering, medicine, environmental biology, sociology, design, and reregional development (cf. Etzkowitz & Klofsten, 2005)