Imacs 2016 imecs 2016 Proceedings (Preliminary version) of the 4
FACTORS SUPPORTING GROWTH OF ADDED VALUE, PERFORMANCE AND COMPETITIVNESS OF SMES AND SELECTED EU COUNTRIES
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- 398.Introduction
- 399.1 Added value
- 1.1 Development of added value in selected countries
FACTORS SUPPORTING GROWTH OF ADDED VALUE, PERFORMANCE AND COMPETITIVNESS OF SMES AND SELECTED EU COUNTRIES397.Marek Vochozka, Mariana PsárskaAbstract Added value, as a default quantitative and qualitative indicator of performance, is one of the most monitored variables in all SMEs. It describes not only the growth of the value of goods and services in all phases of production from the microeconomic point of view but also the growth of value in all phases of production from the macroeconomic point of view (where it is expressed in the form of GDP). The objective of this paper is to find key factors which support growth of added value and its possible changes in selected countries in the context of potential positive development of the added value. The pattern consists of data about SMEs interested in production in the fields with the highest added value in the country. The methodology includes an economic analysis of the given data. The data make it possible to obtain detailed information about creation of added value. The results are important because they can be potentially applied in practice, i.e. in the Czech Republic, Slovak Republic and in other EU countries.
At the macroeconomic level the indicator of added value is a basic pillar which indicates production and performance and it is used in calculation of the gross domestic product. This production indicator is calculated as a sum of added values in a given country over a monitored period of time for all enterprises, included the value added tax and net import taxes (Lisý, 2005, p. 10). A more detailed view of added value is provided by microeconomics which says that, in simple words, it can be calculated as a difference between the company revenues and the costs spent to purchase raw materials, other materials, services and energy (i.e. intermediate products) from other companies. The development of added value is a result of many internal and external factors and we will now select those that we consider the most significant. 399.1 Added valueThe growth of the added value indicator ranks among the strategic but also operative goals of every business. According to Veber (2014, p. 60), the term and its perception are continually developing. From the accounting point of view the added value represents the costs and the profit added to the material, intermediate product and other purchase components, including services in the course of further processing or distribution. From a broader managerial perspective, it anticipates the most effective revaluation of company´s available resources. However, the ratio, which on one side seeks to maximize benefits, gains and effects and on the other side it seeks to minimize costs and consumption of available resources, remains constant. It represents the baseline for calculation of other indicators, such as labor productivity of one worker. Small and medium enterprises in EU 28, as defined above, excel in creation of added value when compared to big enterprises, particularly in businesses dealing with real estates, wholesale, retail and repair services, building sector and services (distribution, hospitality and accommodation sectors, administrative services and also in specialized, scientific and technical activities). In the mentioned economic activities0 SMEs account on average for creation of 75% 0 of the total added value. For this reason I have focused in this paper mainly on the above-indicated economic activities. 1.1 Development of added value in selected countriesThe added values achieved by selected economic activities0 in selected EU countries are very diverse , as indicated in Figure No. 1. The EU countries have been selected not only based on their size, population and economic characteristics but also based on interesting development of their key indicators which influence growth of added value. Figure No. 1 shows the economic activities that create the highest added value in the individual countries (the countries are selected based on the prevailing economic activities conducted by SMEs in the Czech Republic and in Slovakia) and the difference between them. Fig. No. 1: Development of added value in selected EU countries based on prevailing activities performed by SMEs in 2013, according to NACE Rev. 2 (in mil. EUR) Source: The chart is based on Eurostat data – available at: http://apl.czso.cz/pll/eutab/html.h The absolute values of added value, including the processing industry, are the highest in Sweden, Belgium, Denmark and Finland. The lowest values are achieved in Slovakia and Hungary. In the structure of activities, apart from the processing industry, the prevailing activities are wholesale and retail, repairs and maintenance of vehicles, specialized, scientific and technical activities, followed by building industry at the third position. The situation in development of added value is particularly interesting in Denmark. This country has no mineral resources and therefore it has been developing industries with low consumption raw materials but requiring qualified workforce , such as manufacturing of devices and instrumentation or household technology. The country has a highly developed food industry which also accounts for a big part of its exports. In comparison with the other countries and with regard to its size, it achieves very high added value in scientific and technical activities, which is also supported by high investments into research and development that amounted to 3.08% 0 of GDP in 2013 and 2014. Another similar country is Belgium which is strongly oriented at foreign trade, while goods with high added value represent its big part. As an example, we can mention processing and trading of diamonds or chemical and pharmaceutical industries. The country´s position therefore depends on its focus on the most convenient selection of economic activities which provide the highest possible proceeds which benefits not only the individual enterprise but eventually also the macroeconomic standard of the country.
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