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Government should 'allow companies to make money', says AIP chief – executive summary

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Small and medium-sized enterprises play a key role in the national business fabric and in the Portuguese economy.

According to data available on the Bordata website for the year 2023, 1,357,657 SMEs were registered in Portugal, representing 99.9% of the national business sector. Of these companies, 96% are small enterprises, 3.3% are small companies, and only 0.6% are medium-sized structures.

“The weight that SMEs and microenterprises have in the fabric of Portuguese business justifies the creation of a day to celebrate them. This day should serve to reflect on their importance in the national economy, and the problems they face,” said José Eduardo Carvalho, President of the Portuguese Industrial Association – Chamber of Commerce and Industry (AIP-CCI), for the Executive Summary, on the celebration of International Small and Medium Enterprises Day.

José Eduardo Carvalho explains that in a world of 496,000 communities (companies), there are 1,342 large companies and 7,303 medium-sized companies. There are 488,207 small and micro enterprises (98.3%). Its weight in terms of national turnover is 36%, and it employs 1,634,832 workers (51%). “These numbers allow us to think about productivity in the business structure and the competitiveness of the national economy.”

“If we develop in size and size of companies, will the national economy benefit? Will we pay better wages? Will we increase the export base and intensity? Will we strengthen the relationship between companies/universities/production and transfer knowledge to the market?”, he wonders. He replies: “I think so.”

With the new government recently taking office, the President of AIP-CCI was asked what measures he considers necessary to support Portuguese companies. “The first measure is to allow companies to make money. It is the basis of capitalization, strengthening and durability of balance sheets, operating account profitability, increased wages and investment.

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He then argues that the conditions of competition should be “guaranteed, and not interfere abusively in the management of companies, especially through business affairs. Finally, improve the financial competitiveness of the country and implement certain public policies, which allow changing the size of business and capitalization of companies.

Regarding the main obstacles to the growth of Portuguese companies, José Eduardo Carvalho mentions the following: corporate culture resistant to concentration and resizing of operations; Poor design of capitalization instruments that finance this focus; Financial policy that discourages mergers and acquisitions, and poor quality of management.

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