Annexes to COM(2007)592 - Small and medium-sized enterprises - Key for delivering more growth and jobs. - A mid-term review of Modern SME policy - Main contents
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| dossier | COM(2007)592 - Small and medium-sized enterprises - Key for delivering more growth and jobs. - A mid-term review of Modern SME policy. |
|---|---|
| document | COM(2007)592  |
| date | October 4, 2007 |
Promoting entrepreneurship
The Member States have also made considerable efforts to deliver by the end of 2007 the entrepreneurship priority actions as requested by the 2006 Spring European Council.
Most countries have established a one-stop-shop or equivalent arrangement for setting up a company, even though in some cases they do not cover all types of companies. In general, registration times have improved and in many Member States and regions it is now possible to register a company within one week. However, there is still scope and need for greater simplification. Last but not least, the services Directive obliges Member States to set up “points of single contact” through which service providers can complete all formalities relating to their activities.
As to developing entrepreneurial skills through school education, the majority of Member States have taken some measures in this field. However, progress is rather slow in explicitly embedding entrepreneurship as a key competence within national (or regional) framework curricula for general secondary education. This has been achieved in some Member States, while others are starting to implement or are planning reforms in the same direction.
For its part, in February 2006, the Commission adopted a Communication on fostering entrepreneurial mindsets through education and learning [18], providing examples of good practices which were discussed at the Oslo conference on entrepreneurship education. Moreover, it is estimated that more than 200,000 secondary school students participate in a practically-oriented training scheme, launched by the Commission, whereby they run mini-companies to familiarise themselves with basic business concepts and skills. These students are four times more likely to create their own company than others.
To date, around one third of Member States appear to have established a one-stop-shop system for recruiting employees (e.g. in combination with one-stop-shops for start-ups) or have recruitment procedures that are so simple that they can be considered a "one-stop". Progress has been achieved in decreasing the number of procedures.
Last but not least, to safeguard the estimated 2.8 million jobs which are at stake through the transfer of businesses each year, the Commission is promoting good practices on how to design services which aim to establish contacts between potential sellers and buyers of transferable businesses. Further to a Commission Communication[19], a pilot action aims to promote mentoring schemes in EU Member States in order to enhance the knowledge and core competences that are essential for the successful transfer of business ownership.
The image of entrepreneurs and in particular to tackle the stigma attached to business failure remains an issue of concern. Only a small minority of failed entrepreneurs make another attempt to establish a business, despite often retaining a preference for entrepreneurial endeavour. Yet, those who do try again are likely to benefit from their previous experience and are more likely to be successful. Some areas of action for facilitating the fresh start of honestly failed entrepreneurs are therefore put forward in the Commission Communication "Overcoming the stigma of business failure – for a second chance policy"[20].
The wide potential of women, elderly people and ethnic minority entrepreneurs has not yet been fully exploited.
Improving SMEs’ growth potential in a sustainable way
To improve SMEs’ access to finance , more than €1 billion has been earmarked for financial instruments within the Competitiveness and Innovation Framework Programme (CIP) for the period 2007-2013. This amount will enable financial institutions to provide about €30 billion of new finance to SMEs, because each euro spent from the EU budget is complemented by private investor money thus creating a substantial leverage effect. These funds will therefore benefit an estimated 400,000 SMEs in the EU, most of these being micro or small enterprises.
A significant share of the Structural Funds (2007-2013) will be spent to support the creation and growth of SMEs, notably to improve their innovative capacity, their investment in RTD and skills. To improve the availability of sustainable financing for micro-enterprises and SMEs at regional level, the Commission with the European Investment Bank (EIB) and the European Investment Fund (EIF) launched the JEREMIE initiative [21]. It gives Member States the option of using money from the Structural Funds in financial products such as venture capital, guarantees and micro-finance. The Commission encourages Member States to actively use these funding opportunities.
The Commission has also promoted active dialogue and cooperation between bankers and SMEs which has lead to improved mutual understanding and more transparency. The 5th Round Table of Bankers and SMEs[22] discussed transparency issues as well as innovative financing tools like mezzanine finance and SME securitisation, which will make additional sources of SME finance easier to access. Finally, the Commission has identified, together with Member States and industry, the main obstacles to the development of cross border capital markets in order to encourage the development of a truly European venture capital market.
The Commission’s innovation policy and specific support actions have contributed to increasing SMEs’ participation in innovation by addressing market failures and promoting cooperation between stakeholders. The launch of a new, broad-based Innovation Strategy with a ten-point action plan addresses several key issues for SMEs, including skills, standardisation and IPR. The Commission is also actively promoting cluster policies in the Member States and ensures the co-ordination of clusters at EU level to help the emergence of world-class European clusters.
To further enhance access to finance for very small enterprises or craft businesses, the Commission is promoting the provision of micro-credit in Europe. More attention has also been paid to reinforcing SMEs’ access to equity, in particular in their growth phase. Equity investments in SMEs should not be disadvantaged, for instance due to less favourable tax treatment as opposed to other sources of capital.
To help to avoid SMEs and in particular crafts businesses being negatively affected by shortages of skilled labour and the lack of managerial skills, the Commission launched a pilot action for an ERASMUS-type exchange programme for apprentices to encourage them to get professional experience in another Member State. This action is currently being evaluated.
Skills and competencies are key for SMEs and in particular for the craft sector. Better anticipating future skills requirements remains challenging, since emerging skills needs, drivers for jobs renewals, and necessary improvements to strategic planning in education and training systems will impact on a broad range of industrial activities. To facilitate the take-up of e-skills, not least by SMEs the Commission has proposed a new e-skills policy agenda[23].
Finally, the ambitious environmental goals of increasing energy efficiency and reducing greenhouse gas emissions by at least 20% by 2020 and promoting renewable energy sources require the emergence of a new business paradigm. The challenge is to help SMEs to adopt sustainable production and business models and thus make them active players in shifting the European economy towards more environmentally-friendly production and consumption, while in parallel allowing SMEs to reap the economic benefits that this presents. This will build on the experience of supporting socially responsible practices among SMEs. As a first step, the Commission is proposing a programme to help SMEs to integrate environmental concerns into production processes and products starting with a better compliance with environmental legislation[24]. In addition, the forthcoming Action Plans on Sustainable Industrial Policy and Sustainable Consumption and Production will also contribute towards boosting the competitiveness and sustainability of SMEs.
Strengthening SME policy communication and consultation with stakeholders
Regular information and discussion meetings with European business organisations chaired by the SME Envoy[25] provide a forum for a regular exchange of information on the Commission’s major legislative and policy initiatives and their impact on SMEs. This has contributed to strengthening the SME Envoy’s “watchdog” function, feeding SME concerns into the European policy and law-making process at an early stage and enabling stakeholders to be an integral part of the European SME policy-making process.
Furthermore, several high-level stakeholder conferences have brought together a wide variety of representatives from the European Parliament, Member States and business community, furthering the commitment of all key players to implement Modern SME policy. The Commission is also fostering a new dialogue between higher education and business representatives, within which specific issues of concern to SMEs will be raised.
The ‘ European Enterprise Awards ’, organised for the first time in 2006, contributed to raising awareness about entrepreneurship and SME policy and the diverse and creative ways in which regions encourage, support and help small business succeed. A second edition of the Awards will be organised in December 2007 together with the Portuguese Presidency of the Council. Last but not least, the Commission’s new SME web-portal (http://ec.europa.eu/enterprise/sme/) has considerably facilitated access to on-line SME-related information.
the way ahead
The Modern SME policy launched in 2005 has started to bear fruit . A coherent, inclusive and proactive SME policy has put SMEs high on the national and European reform agenda and increased the commitment of stakeholders to commonly agreed goals. Both Member States and the Commission have made considerable progress in implementing actions to create a better business environment, to mainstream SME issues in major policy areas and to encourage more people to become entrepreneurs.
As a result, it has become easier to start up a company, entrepreneurship education is increasingly part of school curricula, there is a growing awareness of entrepreneurship and SME issues within the EU, and the “Think Small First” principle is being integrated into Community and national policies. However, there is still room for improvement, both at Community level and within Member States.
The better regulation "culture" has also begun to take root across the EU: the institutions need to lead the way. The Commission has made major changes in the way it develops new proposals and monitors implementation of existing acquis. The European Parliament has also begun to use impact assessments but the Council has yet to begin to use it as a working tool.
But the benefits of better regulation need to be felt at all levels . All Member States have agreed to set targets to reduce administrative costs by 25% by 2012. To cut the burdens for SMEs who are disproportionately affected by such burdens, there should be a presumption that SMEs will not be covered by administrative requirements of EU legislation unless there is a clear need to do so and the issue can not be better tackled at national, regional or local level. Where SMEs are covered by EU legislation, special measures should be designed to help them. More generally, the EU needs to find ways to cut existing burdens wherever circumstances allow. The next stage is to modernise public administrations so that they provide a transparent, predictable service and an effective means of redress.
The Commission has listened to important stakeholders in view of further developing and sharpening the modern SME policy. It has analysed the results of recent high-level conferences, in particular the 4th European Conference on Craft and Small Enterprises[26] and the High-Level Conference on SME policy[27], took inspiration from initiatives implemented or proposed by Member States and from recent reports by other EU institutions.
The task now is to fully unlock the growth and jobs potential of SMEs and make full use of their innovative capacities. The Commission is convinced of the need to put even more emphasis on SMEs in the context of the next Lisbon cycle 2008-2010. It will seek the views of small businesses and their representatives as it considers designing a "Small Business Act" for Europe with a view to making concrete proposals to further support SMEs.
In its new set of proposals for SMEs in the context of the next Lisbon cycle the Commission will take into account the diversity of the SME community: craft and small businesses, social economy enterprises and family-run SMEs all show potential for strengthening European growth and acting as a driving force for innovation, local development, training and employment, while sometimes displaying special problems and needs.
It is finally equally important that Member States also step up their efforts and put their SME policy higher on the agenda within the context of their National Reform Programmes.
[1] http://ec.europa.eu/enterprise/entrepreneurship/sme_policy.htm
[2] The European Commission’s Spring Economic Forecast 2007-2008.
[3] Statistics in Focus, 24/2006, Eurostat.
[4] The Commission Communication ‘Putting knowledge into practice: A broad-based innovation strategy for the EU’ COM (2006) 502.
[5] The Commission Communication: ’Mid-term review of industrial policy: A contribution to the EU’s Growth and Jobs Strategy’ COM (2007) 374.
[6] http://ec.europa.eu/regional_policy/index_en.htm
[7] Council Regulation (EC) No. 1698/2005 of 20 September 2005.
[8] http://ec.europa.eu/enterprise/enterprise_policy/cip/index_en.htm
[9] http://ec.europa.eu/enterprise/enterprise_policy/charter/gp/
[10] A different de minimis threshold is applied in some sectors, such as fisheries.
[11] http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/c_323/c_32320061230en00010026.pdf
[12] ‘Models to reduce the disproportionate regulatory burden on SMEs. Report of the Expert Group’[13]8ALOUVWuvw, European Commission, May 2007.
[14] http://ec.europa.eu/enterprise/enterprise_policy/analysis/doc/smes_observatory_2003_report4_en.pdf)
[15] http://ec.europa.eu/enterprise/regulation/goods/mutrec_en.htm
[16] Directive 2006/123/EC of 12 December 2006.
[17] http://ec.europa.eu/enterprise/innovation/documents_en.htm
[18] ‘The Global Europe: Competing in the World’ COM (2006) 567.
[19] http://ec.europa.eu/enterprise/entrepreneurship/support_measures/training_education/commplan.htm
[20] Implementing the Lisbon Community Programme for Growth and Jobs: Transfer of Businesses - Continuity through a new beginning COM (2006)117.
[21] [ Reference to be added ]
[22] http://ec.europa.eu/regional_policy/funds/2007/jjj/jeremie_en.htm
[23] See the final report at http://ec.europa.eu/enterprise/entrepreneurship/financing/round_table.htm
[24] E-skills for the 21st century: Fostering Competitiveness, Growth and Jobs (2007-2010).
[25] [Reference to be added]
[26] http://ec.europa.eu/enterprise/sme/envoy_en.htm
[27] http://ec.europa.eu/enterprise/entrepreneurship/craft/4th_conference.htm
[28] Brussels, 14 September 2007