Irina Purcarea

English

Research Papers in Economics

Irina Purcarea*
The Place of Small and Medium Enterprises within
the Sustainable Development Framework
Summary
Small enterprises make up for at least 95% of the enterprises in the European
Community, and constitute an important source of employment. Sustainable development,
on the other hand, involves each of us, individual or organization. It is a concept that
should be embraced by each of us, by each enterprise no matter its size. Each company
should clearly understand the concept and undertake the specific actions considering the
fact that their impact will have certain effects that will echo in the future, therefore
affecting future generations. The present research intends to gain an insight into the
approach adopted by small and medium enterprises as concerning the sustainable
development framework, with a focus on corporate social responsibility initiatives
undertaken by SMEs.     
Introduction
Small and medium enterprises play an extremely important role in creating a dynamic
economy, boosting economic growth and therefore special attention should be given to
providing a proper development framework for SMEs. Small firms make up for at least
95% of enterprises in the European Community and the contribution these firms make to
the economies of their countries is to be acknowledged. 
Moreover, promoting entrepreneurship through the setting-up of small and medium
enterprises is very important if we are to consider the transition to the market economy
and the democratization of the society. Small and medium enterprises can be considered
a source of sustainable development and the connection between small and medium
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*Aca de my  of  Eco no mic  Stu dies,  Bu cha rest,  Ro ma nia.WSPÓŁCZESNA EKONOMIA Nr 3/2008(7)
66
1 HM  Tre asu ry’s  „Ad van cing  long -term  pro spe ri ty:  Eco no mic  re form  in  an  en lar ged  Eu ro pe”,
Crown, Fe  bru  ary 2004, pg. 6, 8, 45–46, 49, 65, 87–88.
enterprises should be thoroughly analyzed if we are to consider a long-term development
framework. 
Sustainable development refers to managing the use of resources so that present needs
are met without making it hard for future needs to be met as well. Economic Sustainability
emphasizes the role of information as well as the need to develop new approaches while
integrating environmental and social concerns into all development processes.
1. Small and medium enterprises and the dynamic competitiveness 
A key role in achieving the Lisbon objective of the European Union, namely to
become, until 2010, the most competitive and dynamic economy in the world, was
attributed to small and medium enterprises (SMEs). At the beginning of 2004, the
“Report”1 which evaluated, within the Lisbon European Council, the progress made in the
economic reform in March 2000 was put forward, inviting to further progress in the years
that follow. It shows that: “A dynamic and productive economy requires an economic
environment that can sustain the key productivity factors – competition, enterprises,
investments, innovation and abilities…In order to effectively compete in an integrated
and competitive global economy, Europe must improve its capacity to innovate and
develop an entrepreneurial culture. 
Most importantly, a lot of attention should be given to analyzing the main drivers of
competitiveness. If we are to look at the renewed Lisbon strategy, raising the long-term
economic growth potential through increasing productivity growth represents one of the
fundamental objectives that were taken into account. 
Increased investment in R&D in case of small and medium enterprises is highly
encouraged as it can lead to an increase in productivity growth, together with appropriate
organizational changes and investments in skills through education and training.  
Increasing the speed of innovation remains a challenge for small and medium
enterprises. The process of innovation is closely linked to increasing the dynamic
competitiveness of small and medium enterprises by expressing the combination between
the markets ‘knowledge, technology, creativity and the process of gathering knowledge
with the purpose of solving problems regarding the competition. 
Another important aspect is the necessity for easing the process of setting-up the
company and the growth stage, in other words, stimulating entrepreneurship also by
allowing new ideas to be transformed into value added products and services. In this
regard, orienting small and medium enterprises towards the knowledge management can
play a significant role in sustaining creativity and generating new ideas.
Due to the European integration, the competition has increased both on the
international and national markets and the quality and the services offered to the customer
are considered to be major factors of competitiveness for small and medium enterprises.
High-tech small and medium enterprises contribute to increasing the life standard,productivity and competitiveness by creating and implementing technological innovation,
also possessing an important potential for contributing to employment and increasing
revenues. Further attention should be given to this category of SMEs, especially in
Europe, as they remain behind those in the United States. 
2. Viewing sustainable development from the perspective of small and
medium enterprises
Sustainable development implies a better quality of life at present as well as what
concerns the future generations. It is important to acknowledge the fact that it is required to
set immediate and long-term objectives, implement local and global actions, consider both
economic and environmental issues, viewing all these elements in an interdependent manner
so as to have a complete view upon the society. Such a view must be strengthened by
encouraging certain principles to be followed, such as political, economic, social principles.  
The European Union has developed a Strategy for Sustainable Development, which
emphasizes the following objectives: 
• climate change and clean energy,
• sustainable transport,
• sustainable consumption and production,
• conservation and the management of natural resources,
• public health,
• social inclusion, demography and migration,
• global poverty.
Improving the quality of life is strongly connected with managing resources in a
sustainable manner by imposing proper public policies at an internal level, as well as
promoting cooperation at international level, in order to elaborate comprehensive
strategies that are meant to provide concrete results. 
Nowadays, small and medium enterprises are encouraged to integrate environmental
and social concerns into their processes and into their way of ‘doing business’. The
concept of corporate social responsibility is meant to prepare each enterprise to create
sustainable development which implies advantages for both the organization and its
stakeholders. 
In what concerns small and medium enterprises, there seems to be a lack of
understanding of this concept as well as relating the concept to larger firms, multinationals
who, in their opinion, seem to be more entitled to develop and implement CSR practices
within their companies. Therefore, it is important to develop such a way of thinking as to
raise the awareness concerning the link between social and environmental issues
sustainable success, these issues constituting factors of sustainable success. Also, a link
between activities based on a stakeholder approach and the enterprise’s competitiveness
should be emphasized.  
Most importantly, small and medium enterprises do not always acknowledge that the
activities they perform are related CSR area. There is the classification by the “target
group” of CSR activities, and the following CSR fields can be illustrated:
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1. Market: it includes business activities related to responsible supply chain
management, improving the quality ors of products, innovation or ethical
advertising.
2. Employees: CSR activities such as improvement of working conditions, pay and
benefits or job creation, training and staff development. CSR initiatives may also
refer to informing employees as well as allowing them to participate in the decision
making process.
3. Society: social integration, education, healthcare, quality of life, security.
4. Environment: CSR activities focusing on an efficient use of resources and the
reduction of waste and pollution by using environmental management systems,
eco design tools, eco labels or cleaner production techniques.
The CSR initiatives of small and medium enterprises usually aim at the employees
as the main ‘target’ group, therefore the internal environment, activities such as
guaranteeing sustainable development, career planning and developing human resources,
improving working conditions as well as involving employees in the decision-making
process.
Conclusions
A sustainable economy implies accepting and dealing with new challenges and
opportunities. In order to build a powerful economy, the European Union intends to
strengthen the entrepreneurial spirit in Europe and create the necessary conditions to
develop innovative practices in small and medium enterprises in order to become more
competitive. It should be acknowledged the fact that orienting small and medium
enterprises towards sustainable practices can build a competitive advantage for SMEs on
the long-term. Small and medium enterprises should adopt a strategic approach to
sustainable development, by integrating environmental and social concerns into theiroperations, by focusing more on CSR practices and developing CSR programs that aim
not only at the employees, as the sole ‘target’ group, but also on the society as a whole.
Looking at the economies of the countries from Central and Eastern Europe, the speed and
importance of privatization and reorganization of public enterprises is strongly connected
with the creation and development of SMEs. This sector needs enterprises that should
focus on a “visionary” management which develops an orientation that takes into account
the present – future axis, therefore integrating the sustainable development issue, by
implementing CSR programs meant to contribute to the development of a sustainable
economy.
References
Burns P., Corporate Entrepreneurship: building an entrepreneurial organization, Palgrave Macmillan,
Houndmills, Basingstoke, Hampshire 2005.
Commission of the European Communities, Communication from the Commission – Raising productivity
growth: key messages from the European Competitiveness Report 2007, Brussels, 31.10.2007.
HM Treasury’s, Advancing long-term prosperity: Economic reform in an enlarged Europe, Crown,
February 2004.
Mandle I., Dorr N, CSR and Competitiveness- European SMEs Good Practice (consolidated European
report), Austrian Institute for SME Research, Vienna 2007.
http://ec.europa.eu/sustainable/welcome/index_en.htm
Rola małych i średnich przedsiębiorstw w systemie rozwoju
zrównoważonego 
Streszczenie
Sek tor  ma łych  i śred nich  przed się biorstw  (MSP)  obej mu je  przy naj mniej  95%  wszyst -
kich  pod mio tów  go spo dar czych  w Unii  Eu ro pej skiej.  Roz wój  zrów no wa żo ny  in te re su je
każ dą  or ga ni za cję  go spo dar czą,  bez  wzglę du  na  jej  wiel kość.  Waż ne  jest  po zna nie  isto ty
te go  roz wo ju  oraz  czyn ni ków  go  kształ tu ją cych.  W ar ty ku le  pre zen to wa ne  są  głów nie  roz -
wa ża nia  nad  od po wie dzial no ścią  spo łecz ną  MSP  w sys te mie  roz wo ju  zrów no wa żo ne go.
Nr 3/2008(7) WSPÓŁCZESNA EKONOMIA
69

Advancing long-term prosperity: Economic reform in an enlarged Europe,

Commission of the European Communities, Communication from the Commission – Raising productivity growth: key messages from the European Competitiveness Report

The Place of Small and Medium Enterprises within the Sustainable Development Framework

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Research Papers in Economics