Now is the time to take care of SMEs and entrepreneurs like never before

February sales fell 25.5% year-on-year (Photo: Getty)
February sales fell 25.5% year-on-year (Photo: Getty)

A few days ago, the Argentine Confederation of Medium Enterprises (CAME) disclosed alarming data on the results of retail sales of companies. SME. According to the latest report, In February, sales fell by 25.5%. compared to the same period last year, accumulating a decrease of 27% in the first two months of the year. These figures highlight the growing challenges faced by SMEs in Argentina’s current economic landscape.

In turn, at a recent public hearing convened by the government to review the subsidy system, officials from the Ministry of Energy confirmed an important decision: Electricity tariff subsidies for business, industry and small and medium-sized enterprises (SMEs) to end.

In our country, according to official data, 79,295 employer companies were born in 2022 (latest data closed) (29% more than in 2021 and 68% more than in 2020). As of the first quarter of 2023, there were 561,449 active companies in the country, and the number of net new companies (opening-closing) in 2022 was 14,422, the highest value since 2008. But be careful: about 50% of companies that are born continue to be active during the 5th year, and the highest mortality occurs in the first 3 years.

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Between 2009 and 2021, specifically in the city of Buenos Aires and in the areas of Greater Buenos Aires, approximately 8,400 companies and 4,700 were lost respectively, in industry, trade and services. This data was analyzed in a new investigation by the Center for Metropolitan Area Development Studies (CEDEAM).

Regarding the promotion of new companies, in particular, the metropolitan area of ​​Buenos Aires presents medium-level conditions for the creation of the same, which can be improved with specific government policy for example:

  • Simplification of procedures
  • Implementation of tax incentives to stimulate hiring
  • Improved access to finance
  • Promotion of learning and entrepreneurial culture

These proposals stem from a recent report we conducted at CEDEAM, in which we analyzed the entrepreneurship characteristics and demographic characteristics of companies, focusing on the city of Buenos Aires and the Greater Buenos Aires area.

The work also delved into the business climate and the ease (or difficulty) of starting companies. According to the World Bank’s Doing Business 2020 report, Argentina ranked 126th (59.0) among 190 countries in the Ease of Doing Business ranking.

Talk about KABAa recent study carried out by the GCBA in collaboration with the Latin American Smart Ecosystem Group (GEIAL) showed that with a score of 55 (out of 100) the city demonstrates a level of intermediate development of its conditions for dynamic entrepreneurship.

The document concludes that in our country in general and in the city of Buenos Aires in particular, medium-level conditions have been created for the creation of new companies, with interesting opportunities, but with some points that need to be improved.

Facilitating the creation of companies and supporting existing ones requires an active and strengthened state with an advanced policy for the development of entrepreneurship.

To access the full report, enter the following link: https://extension.economicas.uba.ar/wp-content/uploads/CEDEAM-Creacion-de-empresas-en-el-AMBA-.pdf.

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