When talking about the demise of small and medium-sized enterprises, the recurring mantra is Schumpeter's "creative destruction." An alluring concept, to be sure, which paints a picture of unstoppable progress where the old gives way to the new. But is this really the complete truth, or are we hiding behind an economic theory to avoid a much more uncomfortable reality? My thesis is clear and direct: the true cause of widespread entrepreneurial failure lies in entrepreneurial incompetence and, even more profoundly, in the ignorance of the System, that is, the intrinsic mechanism that governs the world.
This is not a light statement, I know. But let's look at the facts. Every year, thousands of SMEs close their doors. If it were only "creative destruction," we should see a wave of new businesses, more innovative and competitive, taking their place successfully in a short time. Often, however, we witness a void, a hemorrhage of skills and capital that is not adequately replaced. ISTAT data on business survival, for example, show high mortality rates in the first five years of activity, well beyond what one would expect from a process of "healthy" natural selection.
Isn't it more plausible to think that many of these businesses fail not because they are "surpassed" by something better, but because they were never able to compete from the beginning?
The Ignorance of the System: The Real Plague
The problem is not just about not knowing how to do one's job, but about not understanding the context in which that job fits. I'm talking about the System: the interconnected set of economic, social, political and technological forces that determine the rules of the game. How many times do we see entrepreneurs who are excellent in their technical field, but completely blind to market changes, global financial dynamics, or the impact of digitization?
Think about it:
- How many entrepreneurs truly understand how money works, public debt, and central banks?
- How many are aware of the geopolitical implications on supply chains or raw material prices?
- How many can read between the lines of regulations and anticipate their effects, instead of passively suffering them?
The answer, unfortunately, is "too few". And this gap is not due to "bad luck" or "crisis", but to a systemic ignorance that prevents informed and strategic decision-making.
Isn't it true that those who understand the underlying mechanisms have an invaluable competitive advantage, regardless of the industry?
Entrepreneurial Incompetence: A Deafening Silence
The ignorance of the System translates directly into entrepreneurial incompetence. I'm not just talking about the lack of basic management skills – although those are often lacking as well – but about the inability to adapt, to have a long-term vision, to innovate strategically. Many entrepreneurs are still anchored to obsolete business models, expecting different results while continuing to do the same things.
We are led to believe that the problem must be solved at the governmental level, with subsidies, incentives or structural reforms. Of course, the institutional environment is important. But how many of these interventions are truly effective if the entrepreneur at the base does not possess the conceptual tools to exploit them or to navigate a constantly evolving market? It's like giving a race car to someone who doesn't know how to drive: the problem isn't the car, but the driver.
The Failure of Category Organizations
And here we come to the sore point. Organizations like Confesercenti, Confcommercio, Confindustria and Confartigianato, which should be the lighthouses for SMEs, too often limit themselves to lobbying to obtain concessions or offering basic services. But how many of these organizations seriously commit to teaching the System to their members?
How many propose training courses that go beyond "how to fill out a form" and delve into "how the world works"?
The harsh truth is that the majority don't. Either because it's easier to point fingers at institutions, or because it's difficult to admit that the problem lies in a fundamental lack of understanding. The result is that SMEs, instead of being guided towards greater awareness and autonomy, remain dependent on external aid or, worse, condemned to repeat the same mistakes.
"True ignorance is not the absence of knowledge, but the refusal to acquire it."
As long as this uncomfortable reality is not faced, as long as it is not recognized that the death of SMEs is a symptom of profound ignorance and incompetence, and not just a side effect of progress, our small and medium-sized enterprises will be destined to fail. It's time to stop with the sugarcoating and start teaching entrepreneurs to read the world, not just the balance sheets.