Building SME competitiveness in the European Union and Latin America and the Caribbean

SMEs as economic agents are being called upon to play a new and important role in boosting relations between Latin America and the Caribbean and the European Union (see box 2). These two regions are closely linked from the economic viewpoint, in particular through trade and direct investment as well as through the long-standing exchange of people and ideas. Today, the growth of Latin America and the Caribbean can be a factor for mitigating the impact of the crisis in Europe. The internationalization of SMEs, beyond helping to generate employment and increase incomes, offers the possibility of adding value at origin and introducing improvements in production which will boost the market share of such firms, promoting more vigorous entrepreneurship. To this end it is essential for them to reduce productivity gaps by incorporating technology, innovations and knowledge into products, as well as to foster management improvements.