European SMEs amidst the COVID-19 crisis: assessing impact and policy responses

This paper consider how the COVID-19 pandemic has challenged European small- and medium-sized enterprises (SMEs) in the manufacturing sector, and draw suggests policy implications. The sudden onslaught of the pandemic has acted as an economic shock, and we consider how it is likely to affect different types of manufacturing SMEs. We distinguish between immediate effects, a result of the almost-simultaneous lockdowns across Europe and its major trading partners, and longer-term implications for both SMEs and the global value chains where they are inserted. In the shorter run, most SMEs have faced logistical challenges in addition to demand disruptions, although the severity has differed across firms and industries. We argue that in the longer-term, there will be different challenges and opportunities depending on the type of SME. Policy interventions will also need to be sensitive to the different types of SMEs, rather than adopting a one-size-fits-all approach. The policy mix will need to shift from its initial focus on the survival of European SMEs in the short term, towards a more structural and longer-term approach based on promoting their renewal and growth through innovation, internationalization and networking

Reconfiguring clusters: From Contradictions to Pathways

Despite technological advances diminishing the role of distance, economic activity continues to be spatially concentrated. There is no better example of this than Silicon Valley in California. There are over a thousand such ‘clusters’ in Europe, many of which receive government subsidies. However, many fail to live up to their expectations, and our knowledge on what makes them successful is limited. More worryingly, there are seemingly contradictory insights, with contention existing about fundamental matters such as whether the members of clusters benefit from i) the geographic concentration of dissimilar or similar economic activities, ii) location in a cluster or the embeddedness in networks, and iii) strong formal or informal institutions. This dissertation suggests that this lack of knowledge is a result of selective approaches to clusters in which their geographic, network, and institutional dimensions are not fully considered. Furthermore, past research has assumed that conditions independently contribute, detract from, or are insignificant to the attainment of an outcome over a single pathway. By applying a configurational lens, this dissertation breaks from this, and emphasizes clusters’ complexity. By demonstrating that there are multiple pathways to outcomes like innovation, the seemingly contradictory insights about clusters are reconciled