A PayPal study shows how digital commerce is a particularly useful resource for SMEs.
The research took into account 157,636 small and medium-sized enterprises using PayPal to manage digital payments in 28 countries of the European Union. The results of the analysis show that the SMEs do not need to be located in a metropolis to become a successful company.
It doesn’t matter if they are in a capital or rural area: companies grow at the same pace, thanks to the economy and digital commerce, export opportunities and online payment solutions like PayPal.
The analysis of the data shows how the mainly rural activities in Italy have recorded an increase of +11.4% (in the comparison between 2016 and 2017). The mainly urban ones, have recorded an increase of the turnover of +12.8%. The EMIs have grown at very similar rates.
This trend is becoming stronger and stronger in other European countries. Indeed, Austria (+18.7%) and Germany (+16.8%) have experienced increased growth in rural activities (on an annual basis). The gap between the increase in turnover in metropolis and countryside is increasingly narrowed thanks to the digital economy and digital tools.
Digital commerce on the increase
The growth of digital commerce offers entrepreneurs more opportunities to expand in the European Union and globally. According to PayPal, digitisation is democratizing trade and changing the rules of the game.
Italian small and medium-sized enterprises are constantly growing, including with cross-border transactions. In fact, PayPal points out, the Italian SMEs have reached a total volume of payments of 40.7% outside the European Union.
A great result compared with France (36.20%), Germany (34.40%) and Spain (33.30%). Although the Italian SMEs still have a long way to go to reach the United Kingdom (59%), Norway (57.10%), the Czech Republic (53%), Ireland (48.20%) and Sweden (45.50%).
The results of the white paper show that small and medium-sized enterprises in the European Union account for 99% of all companies and employ two thirds of the workforce. Over the past five years, they have created around 85% of new jobs and offered a future to millions of families.
• Small and medium-sized enterprises have always been the driving force behind the European economy. In PayPal we have several resources for the development and growth of small and medium-sized enterprises, as they are the engine that feeds economic growth in the European Union, contributing 57% of the total added value in this area. EU countries with a higher prevalence of SMEs experience higher economic growth, which is why PayPal has been supporting SMEs in Italy since its inception and, thanks to the introduction of new tools and features, we have managed to offer services to over 20 million SMEs. He commented on Michele Simone, Head of SMB & Partners PayPal Italia.
Digitalisation opens up international success
Micro-enterprises are also an important part of the economy in the European Union. In 2016, 14% of employees in 28 EU countries (30 million people) were classified as self-employed. Moreover, 71.5% of these companies did not employ any other staff.
The Internet allows SMEs of any size to access more than 4.1 billion customers from every corner of the globe. The international SMEs in the EU grow more than twice as much as those selling exclusively in their own domestic market.
PayPal notes that it remains a gap between small and medium-sized enterprises and larger companies than online presence. While 95% of large companies had a website in 2016, only 79% of SMEs could say the same.
Although the IMFs have long been the basis of economies around the world, they have been poorly served by the traditional financial system. Small and medium-sized enterprises that collect payments with PayPal are growing faster than companies that do not use these solutions.
Companies using PayPal are more active internationally than traditional offline companies. On average, Italian SMEs sell through PayPal in 11.2 foreign markets. Traders exporting using PayPal have made almost half of international sales in non-EU countries (41.4%). While 58% of exports are within the EU.
On the contrary, only 28% of traditional exporters among SMEs in the European Union made sales outside the European internal market. Research suggests that significant growth is taking place for PayPal traders trading outside the EU compared to those trading exclusively within the EU (15% and 10% respectively). The results of the white paper show that 59.3% of GDP exports in Italy are intra-EU. While 40.7% of them make international sales to countries outside the European Union.
New opportunities for small businesses
Digitalisation, and financial technology in particular, has given new life to this sector. By offering small businesses more opportunities to reach new customers and exploit technological tools to promote their business activities.
A new generation of companies is redefining the future of trade and growing at an exponential rate. Identifying the right set of tools and technologies is crucial to support a diverse group of activities and maintain a balanced system.
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