Becoming the new Chinese MSME in “new normal”

The world and Kosovo have been surviving with the hindering effects of COVID-19 pandemic on health and economics for over 2 years. But it is an ancient knowledge that “when there is a struggle there is an opportunity”. All we need is to look from a different angle. The pandemics period has been the cause for negative effects in various areas of business life all over the world. But one of the main effects seems that the meaning and the position of Chine in the world economics is subject to change. How will it affect the micro, small, and medium enterprises (MSME) in Kosovo which, is located next to one of the biggest markets of the world namely Europe? The answer to this question is affirmative and let us explain why the answer is positive and a route for MSMEs for exploiting this change.

It is better to start with what has been going on for the world economics since the start of the pandemics. Just after the pandemics started production and supply of many products and materials were interrupted due to the shut down in China. There had been a cut of demand throughout the world either. After some time when the production companies decided to continue their production, they could not find raw material and semi-product which had been produced in China for quite some time. The world witnessed export bans for some products and material during the pandemic times which, is supposed not to happen in free market world. It was the result of the strategy of developed economies for the last 30 years which is, keep the technology based and value-added production and service in-house and procure the rest from the low-cost production centers (mostly from China). Nowadays the countries and united regions such as Europe started to re-consider their strategies for the last 30 years since they had severe strain in getting agricultural products, some simple daily life goods and intermediate goods necessary for production.

There have been some changes on the preferences of the world economy which will open up some opportunities for MSMEs of Kosovo. There is an increasing awareness on breaking the global supplier status of China in the world economy which shows a potential chance for our MSMEs both in domestic and foreign markets. There is a tripod strategy emerged after the pandemic:

  1. Share of domestic supply will increase,
  2. There will be short-term and small batch demand in favor of long-term and large batches,
  3. Global supply system will be in more distributed pattern geographically.

Now it is time for Kosovo MSMEs to increase the awareness of being a supply center for Europe and the rest of the world. The main obstacle in this phenomenon is the lack of production capacity in our country. There should be more production and manufacturing MSMEs while increasing the capacity of the existing ones in Kosovo. But the fact of Netherlands also should not be overlooked. Netherlands has some power of production, but it has a share in the world trade much more than its production potential. It is the power of re-exporting. There is a good talent of MSMEs in Kosovo for importing. This can be an asset in the new world economy strategy for becoming a global supplier by re-exporting.

There are certain reasons behind the rise of Chinese companies which, can be replicated by the MSMEs in Kosovo:

  • Cost leadership based on low waged workforce,
  • Transforming copying talent into innovation and R&D (Research and Development) know-how.

If we compare the properties of our MSMEs with the Chinese companies, there are some similarities. It is a low-cost country regarding the main market which is Europe and our MSMEs has a talent on copying which can be a used as an asset for the coming years.

The new era is called “new normal” and there are some opportunity doors being opened for Kosovo MSMEs. In Europe, Northern Africa and other regions there is an increase in demand for short-term and small batch supply. Kosovo and its MSMEs have the chance for being the global supplier center for close regional markets. There are some steps ahead of our MSMEs in order to achieve this potential:

  1. MSMEs should increase the level of used capacity. This will increase the efficiency of the company and decrease the relative costs for our companies’ competitive power both in domestic and foreign markets.
  2. MSMEs’ know-how and efforts on marketing should be increased in order to increase the sales and achieve the efficiency mentioned above. As small companies we need to be better than yesterday each day on marketing and sales efforts. These efforts must also contain the marketing and sales efforts in foreign markets.
  3. The rapid copying ability of our MSMEs is an asset. But this ability should be taken out beyond “copying what my neighbor is doing” philosophy. Customer needs and necessities are the main guides for retouching products and services to have continuous demand (probably increasing demand). This will break apart small companies from the spiral of low-cost, low-profit in competition.
  4. As MSMEs in Kosovo we need to increase our innovation and R&D ability by reserving part of our investment potential in this area. New normal will bring the wind for these companies. Kosovo has a talented youth potential which, is neglected mostly. Their potential on technology and foreign language is a valuable asset for companies in Kosovo.

This article is not written for making some macro-economic analysis on the world economy. It is deliberately written for the reason of stimulating small businesses for getting more in the “new normal” both in domestic and foreign markets. In order to achieve this goal, you need to start to make a to-do list. This list should reflect your company’s authentic environment while not confined with it for the long-term strategies. Then it is the time for running the plan make it to happen for your company and Kosovo. As the number of “new Chinese company” will increase in Kosovo there will be more prosper economy in the country and MSMEs will be able to hire more talented young staff since there will be no need for them to look for a better life abroad.

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