enterprise directorate general european commission european union activities in favour of smes...

Enterprise Directorate General

European Commission

European UnionActivities in Favour of SMEs

Budapest, February 20, 2004

Dr. Timo Summa

Director

Enterprise Directorate-General

European Commission


European Commission

SMEs in Europe

• 20 million SMEs in Europe 2/3 of total employment average size : 6 persons

• SMEs central to Political Objectives : Lisbon goal Charter for small businesses Open method of co-ordination « Think small first » and « SME Envoy »

Role of the European Commission


European Commission

Role of the European Commission

• Coordinate Member State actions Enterprise Policy Scoreboard Implementation of the Charter for Small

Enterprises BEST Projects

• Elaborate an entrepreneurship policy: Green Paper (January 2003) Action Plan (February 2004)

• Provide support to SMEs financial instruments through other EU policies


European Commission

Enterprise Policy Main ActivitiesEnterprise Policy Main Activities

REGULATORY FRAMEWORKREGULATORY FRAMEWORK

Action Plan on Regulatory Environment(2002)

COMPETITIVENESSCOMPETITIVENESS

Competitiveness Report (annual), specific issues: Manufacturing industry (2001) ICT (2001) Biotechnology (2001) Services (2002) Competition (2002) Sustainable development (2002)

ENTREPRENEURSHIP & INNOVATIONENTREPRENEURSHIP & INNOVATION

Charter on small enterprises

Scoreboards

Benchmarking

Lessred tape

ImpactAssessment

Entrepreneurship Green Paper/Action Plan

Innovation (annual) Enterprise Policy (annual)

Minimum standards for consultation

Communication on impact assessment

DG Enterprise main functions


European Commission

Objectives of 2001-2005 Multi-Annual Programme for SMEs

• Promote entrepreneurship

• Enhance growth and competitiveness

• Improve administrative and regulatory environment

• Improve financial environment

• Facilitate access to Community support services and networks

DG Enterprise main functions


European Commission

Directorate B focus to support SMEs

• Euro Info Centres network• Innovation Relay Centres• Financial instruments • Crafts• Women entrepreneurs• Ethnic minority entrepreneurs• Co-operatives, social economy• Database SMIE database : good practice

database• SME Envoy


European Commission

Euro Info Centres

• > 300 EICs in 39 countries: European Union, Norway, Iceland, CEECs and the Mediterranean

• Information, advice and assistance to SMEs

• Provide feed-back to the Commission

• Network effect



European Commission

SME Envoy : mission

OUTSIDE the Commission• Regular dialogue with SMEs and their

representatives, both at national and European level

• Inform SMEs and gather their feedback on EU legislation, programmes and policies

• Active use of Euro Info Centres



European Commission

SME Envoy : mission (II)

INSIDE the Commission• « Watchdog function » to monitor

policies affecting SMEs

• Highlight SME concerns to relevant Commission services

• Coordination role to increase awareness of SME specific interests



European Commission

Policy areas mentioned by respondents

A) Continued efforts needed

Administration and regulation

Access to finance

Support and training services

Innovation

Facilitating transfer of businesses

Entrepreneurship education

Attitudes towards risk-taking and failure

European agenda for European agenda for EntrepreneurshipEntrepreneurship


European Commission

Policy areas mentioned by respondents

B) More efforts needed

Social security for entrepreneurs

Public procurement

State aids

Taxation

Labour law complexity and inflexibility

Internationalisation

The regional dimension

European agenda for European agenda for EntrepreneurshipEntrepreneurship


European Commission

Five key areas for action

1. Fuelling entrepreneurial mindsets

2. Encouraging more people to become entrepreneurs

3. Gearing entrepreneurs for growth and competitiveness

4. Improving the flow of finance

5. Creating a more SME-friendly regulatory and administrative framework

The Entrepreneurship Action The Entrepreneurship Action PlanPlan

European agenda for EntrepreneurshipEuropean agenda for Entrepreneurship


European Commission

Key actions 2004-2005 (1)

1. Fostering entrepreneurial mindsets among young people

Exchange of best practice Commission Communication with key success factors / recommendationsWork jointly with DG EAC to promote Entrepreneurship Education

2. Reducing the stigma of failurePrepare material for information campaigns Verify progress on improving bankruptcy lawsConference to disseminate findings of the recent project

3. Facilitating business transfersStudy on cost of company deathsFoster development of business transfer market placesCommunication with further recommendations



European Commission


4. Reviewing social security schemes for entrepreneursIdentify influence of social sec. schemes on entrepreneurship driveGood practices brochureInvestigate appropriateness of possible regulatory measure

5. Providing tailor-made support for women and ethnic minorities

Study on support for young entrepreneursSet up network on good practice exchange on access to finance European conference on support services for these groups

6. Supporting businesses in developing inter-enterprise relations

Support partnering events bringing together various stakeholdersDevelop administrative support/IT tools to assist BICs, EICs & IRCsExtend innovative regions program



European Commission


7. Creating more equity and stronger balance sheets in firms

Evaluate current financial instrumentsPublish info on business angels marketInvestigate tax disincentives to stronger balance sheetsReview/simplify state aid rules to SMES

8. Listening to SMEsBest project report with state of play/good practices/reference modelEstablish early-warning system for SME policy mattersImprove the IPM exploitation mechanism

9. Reducing the complexity of complying with tax lawsLaunch a pilot scheme to apply ‘Home State Taxation’Set up one stop shop mechanism for VAT registration across MS



European Commission

Possible key actions 2006 and beyond

Conducting entrepreneurship campaigns

Fostering the creation of more fast-growing enterprises (gazelles)

Promoting entrepreneurship in social sectors

Enabling micro-enterprises to recruit by reducing the complexity of regulations

Facilitating SMEs’ access to public markets



European Commission

The Charter for Small EnterprisesThe Charter for Small Enterprises

Periodic reports on Member States and Commission actions in favour of small businesses (focusing on priority actions)

Priorities 2003

listening to and consulting small businesses

innovation and technology transfer

access to finance (particularly venture capital and micro loans)

Priorities 2004 to be fixed by February 2004

Equipping small businesses to take full advantage of the knowledge-based

economy


European Commission

The Best Project CycleThe Best Project Cycle

Best

Identification Definition

Execution

Adoption

Monitoring


European Commission

Examples of BEST Projects • Training for Entrepreneurship• Benchmarking the administration of start-

ups & the management of incubators• Business Angels network• Top-class business support services• Transfer of business• Entrepreneurship amongst women• Skill shortage in ICTs• Restructuring, Bankruptcy and Fresh start


European Commission

Financial instruments: MAP

• Financial instruments 2001-2005 Total funding € 317m Managed by the EIF Using national financial intermediaries

• Three windows ETF Start-up: venture capital investments SME guarantee facilities Seed Capital Action: support for seed

funds


European Commission

Financial instruments: ETF Start-up

• Investments in VC funds and incubators Currently Member States and EFTA Seed funds, small funds, regional funds,

focused funds. Target SMEs less than 5 yrs old Funds should be commercially oriented Private funding should be at least 50 % EIF investment normally 10 to 25 % At most € 10 m Usually for 5 to 12 years


European Commission

Financial instruments:SME Guarantee Facility 1

• Equity guarantees Using financial intermediaries Existing equity guarantee portfolios EIF cover limited to €0.5m per SME EIF risk additional to the normal risk of

the institution EIF cover rate negotiated individually

(max. 50%), with a total loss cap Guarantees up to 10 years


European Commission


• ICT loan guarantees Financial intermediaries Information technology and training

investments of SMEs which have up to 100 employees

Medium-term loans (longer than 18 mths) Risk sharing EIF / intermediary EIF guarantee rate up to 75 % of the

intermediary’s commitment, capped Guarantees for up to 10 years


European Commission


• Loan guarantees Through financial intermediaries For SMEs with growth potential, with up

to 100 employees For investments, including intangibles Medium / long-term loans (over 18 mths) EIF guarantee rate up to 50 % of the

intermediary’s commitment, with cap


European Commission


• Microloan guarantees Financial intermediaries For SMEs up to 10 employees Particularly for start-ups Loans up to € 25 000 Also overhead support for intermediaries

up to € 200 per loan guaranteed. EIF guarantee rate up to 75 % of the

intermediary’s commitment Guarantees up to 5 years


European Commission

Financial instruments:Seed Capital Action

• Support for seed funds and incubators For those in which EIF participates Grants to cover part of management

costs € 100 000 per new staff member, at

most € 300 000 or 5% of capital allocated for seed investments


European Commission

Financial instruments: other actions

• Developing risk capital markets Risk Capital Action plan Best practices on business angels

• Banks and SMEs Round tables supporting dialogue

• Framework conditions Eg. effects of Basel II

• European Investment Bank (through intermediaries) “Global Loans” Venture Capital


European Commission

Other EU programmes and policies on SMEs

• Information Society programs: e-EUROPE, GO-DIGITAL

• 6th framework Programme for Research & Development 2002-2006

• Education and training: LEONARDO

• Environment: LIFE III

• Intelligent Energy programme

• External relations and international cooperation: AL INVEST, ASIA INVEST, GATEWAY TO JAPAN


European Commission

Better regulationAction Plan for simplifying and improving regulatory environment

Reduce the volume of legislation Integrated method of impact

assessment Better transposition and application of

EU legislation in Member States Principles and Minimum standards for

consultation Commission internal legislative network



European Commission

Structural Funds

• ERDF, EAGGF Structural funds (nationally managed), Cohesion Fund

• ESF : entrepreuneurial skills, technology transfers

• INTERREG - URBAN – LEADER -EQUAL• Venture capital, guarantees• € 213 billion for 2000/2006• Regional innovation measures



European Commission

Structural Funds (II)• 350 programmes, 100 000 projects

every year• Programme management and project

selection at national level• Regulation on eligible expenditures

http://europa.eu.int/comm/regional_policy/sources/docoffic/official/regulation/reglem_dep_en.htm

• List of managing authoritieshttp://europa.eu.int/comm/regional_policy/manage/authority/authority_en.cfm



European Commission

Research and Development• SME Programme

Explanatory awards Cooperative research

• Innovation Cordis (www.cordis.lu) Gate2Growth (www.gate2growth.com)

National Contact Points Eur. Commission info Desks



European Commission

Innovation and Technology Transfer

• Innovation policy

• Gate2Growth : business plan assistance & project-investor matching (www.Gate2Growth.com)

• Networks Innovation Relay Centers : 68 IRCs to

promote technology transfer ‘Innovating Regions in Europe’ network

• CORDIS (www.cordis.lu)



European Commission

Contacts•Web site: http://europa.eu.int/comm/enterprise

•Euro Info Centres: http://europa.eu.int/comm/enterprise/networks/eic/eic.html•Support measures database:

http://europa.eu.int/comm/enterprise/smie/index.htm•SME Envoy:

[email protected]

Fax : +32.2.299.41.43

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