Let’s help grow our SMEs!
On Saturday 10 February I had the pleasure of taking part in the #LeTop2018 event organised by Afep (the French association of large companies), of which Societe Generale was a partner. The goal of this all-day event was to give SME directors an opportunity to get together with the CEOs of major businesses to discuss some of their concerns. Frédéric Oudéa, CEO, SG, was an active participant in the event.
The concerns and messages conveyed by all the entrepreneurs regarding key issues such as growth, innovation and change management came as no surprise to me since, as Managing Director of Societe Generale retail banking in France, I’m lucky enough to meet with businesses of varying sizes almost every day, and as a result, I'm acutely aware of the issues they face.
Further to this enriching event, I’d like to go back over three of the widely-discussed topics: how to boost innovation, how to improve the way we support SMEs to foster their growth plans and how we can take inspiration from their successful ventures and agility.
Regarding innovation, SMEs frequently ask themselves how they can incorporate digital technology into their business. If we compare France to our fellow European countries as regards the use of digital technology, a sort of paradox emerges: on the one hand, here in France we are highly “connected” in our everyday lives, yet on the other hand, French businesses still lag behind sometimes when it comes to embracing digital tools. Based on this observation, at Societe Generale we have opted to breathe life into our innovation projects by mobilising the agility and creativity of our people. We decided several years ago to provide every employee with mobile tools. More recently, we launched a managerial initiative to encourage in-house startup projects. It might seem simpler to launch an initiative of this type in a company quoted on the stock exchange rather than a small business, but the principle of building on the ideas and enthusiasm of employees themselves can be applied to all businesses, regardless of size. We also foster exchanges and feedback on this topic among our customers through contents and events devoted to these “new models” arising from the digital transformation. And one of the things that also struck me in the course of my fascinating conversations with these small businesses was that we have a lot to learn from their dynamic approach and creativity. All their projects and initiatives are highly inspirational!
On another note, funding is a difficulty frequently mentioned by SMEs. As bankers, this is naturally a subject of paramount interest to us. As a general remark, and if we compare France with other economies, the major issue facing French businesses concerns equity financing. This leads us to note another specific aspect of the French economy: households tend to have significant savings, but they choose to invest them mainly in low-risk savings products (regulated savings accounts or life insurance products). Several attempts have been made to incite private investors to shift part of their savings to the financing of small businesses. The outcome so far is not convincing, but in conjunction with public authorities, some banks - with SG leading the way - are fully committed to the PACTE initiative. Second topic: bank funding. From a general perspective, SMEs do not appear to have any issue with bank funding (loans to small businesses are rising by over 5% per year, which is well above economic growth and much higher than the corresponding figure for other European states). However, we are of the opinion that we still need to improve our offer and responsiveness. For this reason, here at Societe Generale we have made the conscious decision to adapt our retail banking network to improve our ability to support SMEs in ways that go beyond simply approving bank loans. We decided to create Business Hubs providing specialised assistance in the use of funding. These new hubs offer small businesses access to specially trained experts and enable us to provide tailored advice to best meet their specific funding needs (cash flows, real estate, export credit, and so on). Our ambition is to combine proximity (150 access points for exchanges with Business Advisers within the SG network), expertise and synergies with all of the Group’s business lines as well as our international structures.
Moving on to the third key issue of the day. I was genuinely impressed by the creative appeal of all the projects being driven by our talented, enthusiastic small business leaders. These businesses included SMEs involved in new IT sectors, ranging from data to cyber security, the food industry, ecology, waste treatment and energy savings, change management and human resources and, in a general sense, all the fields corresponding to emerging customer habits (and there are many more!). For those of us operating within major Groups, they are a source of inspiration and an example of how we might reconsider our own practices, as well as a poignant lesson in agility and determination.
My warm thanks to all of you for this breath of fresh air and optimism!
“Growing small businesses, a major issue for securing long-term economic recovery”
There is a critical need to lend our support to SMEs because they contribute to job creation and boost exports, both of which are key drivers of economic recovery. The French economy is showing promising signs of recovery after a fairly sluggish decade. In this context, the ability of small businesses to sustain their growth is even more crucial to establishing a virtuous circle of economic recovery.
Let’s give them our full support!