Small and medium-sized enterprises (SMEs) collectively accounting for over 99 per cent of all enterprises and creating 85 per cent of all the new jobs in the last five years. They are central to Europe’s economy. However, SMEs are still held back by difficulties in getting access to finance, entering new markets outside the European Union (EU) or coping with red tape. Furthermore, the economic crisis in Europe has heaped further pressure on SMEs in recent years. How is the EU helping the more than 20 million EU SMEs to address these problems and ensure Europe’s future prosperity? Jean-Marie Avezou, Minister Counsellor from the Delegation of the European Union to China and Mongolia, explains below.
From SBA to COSME
In 2008, the first Small Business Act for Europe (SBA)—presented by the European Commission and endorsed in December 2008 by the Council—put into place a comprehensive SME policy framework to support all independent companies with fewer than 250 employees. The SBA sets out a comprehensive policy programme with specific actions in ten areas with the objectives of promoting entrepreneurship, applying the ‘Think Small First’ principle to policy making and encouraging SMEs’ growth by helping them tackle the problems which hamper economic development. An update of the SBA in 2011 shifted the focus to policies and actions most likely to help SMEs cope with the economic crisis, including facilitating access to finance, reducing bureaucracy, promoting access to new markets and stimulating entrepreneurship. The SBA implementation has led to a wide array of measures, at both national and European level. Moreover, a new programme called Competitiveness of Enterprises and SMEs (COSME) has been launched for the period 2014–2020, to provide dedicated funding and services for SMEs. The programme has a budget of EUR 2.3 billion over its seven-year lifetime, which will be allocated to four main priority areas: better access to finance, improved access to markets, support for entrepreneurs establishing new businesses and supporting more favourable conditions for business creation and growth.
A strong focus on SMEs’ internationalisation
For European companies doing business in or with China, the internationalisation dimension of EU SME policy is directly relevant. A wide range of support services and tools for SMEs going international has already been developed.
The Enterprise Europe Network (EEN) is a key resource offering free support and advice to firms across Europe to help them make the most of business opportunities in the EU and beyond. The network has 600 partners in over 50 countries, including China. Each branch of the network provides a ‘one-stop shop’ for European SMEs to access local or regional information and business contacts, notably via matchmaking events. The network effectively provides both practical opportunities for business growth and a mechanism for sharing and disseminating information across Europe. Under the COSME programme, a new network will be launched in 2015 to establish business cooperation centres for the EEN in international markets.
In addition to support provided by the EEN, business centres have been established in several third countries to help EU SMEs developing their commercial presence in promising but challenging external markets. Business centres provide information, market advice and practical solutions on how to invest in a region and how to establish business activity. The majority of such centres have been located in Asian countries, including the EU SME Centre in Beijing. Since 2011, the EU SME Centre has provided a comprehensive range of free-of-charge, hands-on support services to SMEs (from practical guidelines and reports to webinars, training, hot-desking and an auto-diagnostic toolkit assessing SME readiness for the Chinese market). The centre focuses on the crucial early stages of market penetration strategy. It also acts as a platform facilitating coordination amongst EU Member States and European public and private sector service providers to EU SMEs.
To accompany SMEs in developing their presence on third country markets, a network of intellectual property rights (IPR) helpdesks is providing free advice on IPR, which is frequently cited as one of the biggest concerns to EU SMEs when considering internationalisation. Since 2008, the China IPR SME Helpdesk has played a pioneering role in supporting EU SMEs by both protecting and enforcing their IPR in or relating to China. Under the COSME programme, similar helpdesks have been established in Southeast Asian and Latin American countries. The IPR helpdesks all provide jargon-free, first-line and confidential advice on IPR issues, using innovative communication techniques to more effectively reach out to SMEs.
Online platforms, like the SME Internationalisation portal, are also available to facilitate SMEs’ access to general information and links to existing services such as those outlined above, offered in various regions or countries to support SME international activities.
In the coming years, the EU will continue to provide SMEs with easily accessible information on how to expand their business outside the domestic single market. This will be done without duplication of the services already provided by Member States or business organisations: an EU added value will be that developed and new services will be smoothly integrated into the various existing instruments. The challenge of SMEs’ internationalisation will remain a very important dimension of EU SME policy.
2015 and beyond
The SBA has proven to be an efficient policy tool to promote a better business environment for SMEs. However, it needs to be updated and geared towards creating more opportunities for growth for European SMEs. As such the SBA will be revisited in 2015, and this has already been initiated by a public consultation, offering an opportunity for individuals, companies and other organisations to provide ideas on what a revised SBA should look like. Ongoing initiatives should be continued in five priority areas: 1) reducing administrative burdens; 2) access to finance; 3) access to markets (both within the EU Single Market and outside the EU’s borders); 4) entrepreneurship promotion; and 5) skills development to overcome the shortage of skilled labour. Furthermore, in each of these five priority areas new initiatives will be put forward. An initial proposal for the new SBA should be adopted in the first half of 2015, following analysis of the public consultation. The objective of the revised SBA is to continue to deliver a strong European policy tailored for SMEs and entrepreneurs from 2015–2020. The overall driver for the new SBA will be the support for growth. The European Commission will continue to support small business, which drives economic growth, provides jobs and fosters a bright future for Europe.