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Wages: SME sector will fall behind without reforms
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Many jobs and wages depend on the achievement of small and medium enterprises (SME sector) in Hungary. In fact, they employ 2/3rd of the people working in the private sector. As a result, they are crucial for the labour market, but their economic achievement fell significantly behind bigger companies’. To be specific, the added value of an employee working in the SME sector is only 38pc compared to his/her colleague working for a big company. Also, SME sector fell behind most regarding investments. 24.hu’s summary.
SME sector companies do not want to invest
According to the Hungarian Central Statistical Office (HCSO), there are vast differences between SME sector and big corporations. Though
99pc of the Hungarian companies belong to the SME sector, their share regarding Gross Value Added (GVA) was only 43pc in 2016.
On the other hand, they received 42pc of the total net revenue.
In fact, SME sector fell behind mostly regarding investments in 2016. Their share was only 34pc regarding the investments of the companies and 27pc regarding the total amount of investment. This is partly because
their willingness to invest their hardly won profit is significantly low.
Furthermore, most of these Hungarian-owned businesses are less profitable. Therefore, the amount of investable money is insufficient. In contrast, bigger companies are mostly multinational ones meaning a higher amount of available and investable capital. Finally, low willingness regarding investment in SME sector is in strong connection with the flat rate of expected return.