Next week is European SME Week and no doubt we will hear from the great and the good all about the excellent job the SME sector is doing. For five days we will be praised in a condescending manner by government, the banks and big business. But do they really understand what drives an entrepreneur to set up and run a business? Do they really see or acknowledge the pivotal role of small business in the economic and social life of the country?

If SMEs are not just bonsai versions of big business, then what distinguishes them from their larger counterparts?

Owner/manager entrepreneurs, in general, are more interested in the long-term development of the economy, while shareholders and professional management are primarily concerned with short-term profit and boosting shareholder returns. Owner/managers are more responsible towards their employees and more integrated into local communities. They play an important role in stabilising society and have a bridge-building function between workers and capital/equity owners. Therefore, SMEs play an important role in the economy and in society.

SMEs suffer from the disadvantage of having limited human and financial resources and being more locally-bound. However, in being small there is also strength, flexibility, innovation and the capacity to adjust rapidly to changing market conditions – all the hallmarks of true entrepreneurs.

Given similar intellectual abilities, experience and training between contemporaries, the acid test of the enterprising urge is the willingness to take risks. The entrepreneur will employ himself and deploy his own capital, whereas the non-entrepreneur will do only the first part.

The risk taken by any entrepreneur embarking on a new business initiative is considerable. If equity does not demand that he or she should be able to enjoy the fruits of success, then the need to ensure human motivation certainly does. Consequently, if the environment is unduly harsh and the reward obtainable for the risk and effort not commensurate, existing businesses are likely to mark time or decline, and new companies will not easily establish themselves.

The entrepreneur, apart from having to perform regular tasks similar to those of the employee, will also commit most or all of his material assets to the business and a considerable proportion of his time. Understandably, the entrepreneur does not stake everything he has without the expectation of success and commensurate reward. The entrepreneur will look for adequate recompense for the risk and the effort he has put into the enterprise.

The fact that owner-managed enterprises are mostly small or medium in size is insignificant compared to the real distinguishing feature – namely, the personal financial risk borne by the owner-manager and entrepreneur. This is the sector of the business community that ISME represents. It is one of the features that distinguishes ISME from other representative bodies.

True recognition of the contribution that entrepreneurs make to the economy of Ireland is long overdue, and not just by means of a token SME Week. In addition to providing a range of goods and services to all sectors of the economy, they are a vehicle for economic growth, job creation, competitiveness, innovation and social cohesion.

Small businesses are much more labour-intensive than large enterprises and therefore play a significant role in the labour market. The contribution of small businesses to job creation should not be overlooked, as they account for most of the new jobs. The loosening of credit is a major factor in restoring jobs growth in SMEs; while large firms have more cash resources and easier access to the capital markets, small firms rely heavily on banks, which have tightened their lending drastically.

So, if our government is serious about assisting SMEs, then why not use a portion of the Nama funds to guarantee small business loans at concessionary rates? The SME sector was at the forefront in creating jobs in the late 1990s and has proven time and time again that, given the proper economic environment, it will do so again.

Bankers will not lend to SMEs unless they are forced to, and meetings between them and enterprise minister Batt O'Keeffe in recent days must produce concrete lending solutions before many more SMEs go to the wall for want of credit.

The key objectives for an agenda for entrepreneurship in Ireland must be to place entrepreneurs and their requirements at the centre of policy-making. Legislators must consciously take a "think small first" approach when drawing up new policies and legislation. This approach will have direct benefits for 98% of businesses in Ireland and will manifest itself in higher productivity and job creation.

In spite of sporadic acknowledgements of the role and function of competitive SMEs, legislators, bankers and administrators generally have little understanding of the demands they place on these companies. The full implications of this must be viewed in light of the fact that more than nine out of every ten enterprises in Ireland employ fewer than ten people.

Rather than fobbing off the SME owner/managers and entrepreneurs with their SME week, where small business can have 'their day in the sun', what is needed from government is a genuine initiative to put SMEs at the heart of economic and enterprise policy. What is needed from banks is a return to genuine business risk assessment, where viable small businesses can once again create employment and wealth.

Mark Fielding, Chief Executive of the Irish Small & Medium Enterprises Association