The small size of firms has a significant impact on labour productivity as it prevents firms from exploiting economies of scale and cutting-edge technologies. Microfirms and small firms face barriers in accessing finance, are unable to innovate, develop an integrated strategy, export and compete in the international economic environment.
92.9% of enterprises in Cyprus are classified as microfirms with up to 9 employees and 6.The new Long-Term Strategy for the Sustainable Development of Cyprus proposes a new growth model and sets, among other things, as an important pillar the improvement of competitiveness and productivity of Cypriot enterprises and the shift towards exports.
The new Long-Term Strategy for the Sustainable Development of Cyprus proposes a new growth model and sets as an important pillar the improvement of competitiveness and productivity of Cypriot enterprises and the shift towards exports. Achieving this objective requires larger sizes of enterprises that can respond to changing market conditions and survive in a globalised environment.
It is the position of the Council of Economy and Competitiveness that emphasis should be placed on encouraging mergers and acquisitions, thus aiming to create larger enterprises that can take advantage of economies of scale and become more productive and competitive, attracting skilled and qualified staff, and attracting more and better qualified employees.
The Council of Economy and Competitiveness is of the opinion that emphasis should be placed on encouraging mergers and acquisitions. [/LIST]
The above recommendations are detailed in the proposal of the SOAC, which is also posted at Council's website
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