Annexes to COM(2005)551 - Implementing the EC Lisbon programme - Modern SME policy for growth and employment - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2005)551 - Implementing the EC Lisbon programme - Modern SME policy for growth and employment. |
|---|---|
| document | COM(2005)551  |
| date | November 10, 2005 |
The EU Market Access Strategy will be stepped up as to registering and assessing the impact of complaints expressed by EU companies and ensuring an adequate follow-up. The Commission also aims to develop SME policy and improve the business environment in non-EU countries, in particular the candidate countries and the partners of the European Neighbourhood Policy, through policy cooperation and aid programmes.
3.3. Cutting red tape.
At Community level, the Commission is determined to integrate the ‘Think Small First’ principle in all Community policies and to push for regulatory and administrative simplification. In identifying the appropriate simplification measures, attention should be paid to ensuring that regulation is proportional to the principle objectives pursued taking into account the social, environmental and economic aspects.
Better regulation is of particular importance to SMEs, as they have limited resources and insufficient expertise to comply with often complex rules and regulations. Evidence suggests that SMEs may also suffer disproportionately from administrative burdens. To improve framework conditions for growth and employment, the Commission will simplify Community rules and legislation, as set out in the recent Communication on simplification of the regulatory environment.[8] As simplification is a shared responsibility, Member States need to address it in their national legislation, as well as transpose EU rules in the simplest way possible.
The Commission will examine the SME dimension when assessing, at an early stage, the impact of EU legislation and ensure that SMEs’ needs are properly and systematically taken into account. When preparing forthcoming legislation, the Commission will ensure that it does not inhibit SMEs’ growth and innovation potential and will systematically examine all options, including exemptions, where appropriate. Both at national and EU level, appropriate measures to lighten the legislative burden on SMEs should always be considered and it may be useful to introduce specific provisions for SMEs. These could include longer transition periods, reduced fees, simplified reporting requirements, even exemptions, or assistance, like helpdesks. For example, the revised EU pharmaceutical legislation provides for significant fee reductions, deferrals and special administrative assistance for SMEs developing medicines. The Commission will also ensure that SME stakeholders are properly consulted.
The Commission is also paying increasing attention to barriers related to the administrative burden which hinder SMEs in creating jobs and invites Member States as a matter of urgency to examine the results of a recent report on one-person enterprises, and implement its recommendations on facilitating recruitment by small companies[9].
Sometimes the use of alternative policy instruments , like standards and voluntary agreements, needs to be considered with a view to complementing and supporting the implementation of existing legislation. When these are being envisaged, the drafting process should allow SME representatives to participate fully.
The work to simplify the rules related to SMEs’ participation in Community programmes will be carried on vigorously by reducing the complexity of procedures, improving information to SMEs on existing programmes and ensuring that evaluation procedures take into account the particularities of SMEs. In addition, the Commission is considering other measures, such as introducing pre-assessment procedures, encouraging the participation of SME consortia, simplifying financial requirements for SMEs and setting targets for SME participation. The Commission will also ensure adequate follow-up of the measures taken by regularly assessing SME participation in EU programmes.
Both the Commission and Member States should take action in specific policy areas to alleviate burden on SMEs and to take better into account their particular needs. The Commission intends to revise and simplify the various State aid rules and to encourage risk-taking through a more flexible approach for aid directed at SMEs. In particular, the State aid rules on innovation will be revised to foster innovation in SMEs, which is an important element.
The Commission has published a proposal for a Council Directive[10] to introduce a uniform threshold of €100 000 calculated in annual turn-over for VAT exemption and a VAT One-Stop Shop system to simplify VAT obligations and to encourage SMEs to increase intra-EU trade. The Commission is pressing for speedy adoption of this Directive. Furthermore, Member States are invited to review direct taxation to reduce unnecessary burden on SMEs. Finally, the Commission will identify good practice in Member States on the tax treatment of retained earnings which strengthen the equity position of SMEs.
3.4. Improving SMEs’ growth potential.
The EU is acting to address persistent and well-identified market gaps that limit SMEs’ access to finance, research, innovation and Information and Communication Technologies (ICT) and hinder their potential to grow. While its activities have had leverage effect, they need to be strengthened and further developed to respond to changing needs of all types of enterprises.
Finance is a crucial input for the creation, expansion and development of SMEs. The Commission has proposed to increase the existing financial support to SMEs significantly under the Competitiveness and Innovation framework Programme (CIP). A new risk capital instrument aimed specifically at innovative and high-growth SMEs is designed to foster expansion. An instrument for securitisation of bank loan portfolios will free up further loan capacity to develop the availability of proximity financing for more traditional businesses. The Commission will present a Communication on the European way to finance growth to create stronger synergies with Member States and the financial community, to remove remaining obstacles to the Internal Market for financial services as well as to identify efficient and effective public-private partnerships capable of overcoming market gaps.
Permanent innovation is essential for sustainable development of enterprises.[11] However, in spite of their important contribution to innovation, SMEs frequently encounter difficulties in using innovation and research results and making good use of IPR. The EU has set itself the objective of strengthening the innovation and research capacity of SMEs and increasing the volume of technology transfer to them, while recognising that all types of SMEs can benefit from technological progress. The Commission will therefore seek to increase participation by SMEs in the Europe INNOVA initiative and to deliver specific support to SMEs in the field of IPR, through the Community business support networks. As for the Environmental Compliance Assistance Programme , it will support innovation in SMEs while improving their environmental performance.
Investment in the growth potential of SMEs is also one of key elements of the new cohesion policy . The Strategic Guidelines outline a number of activities focusing on SME growth, including improving access to finance for SMEs and potential entrepreneurs, facilitating technological transfer or investment in poles of excellence linking SMEs to research and technological institutions.
The Commission considers it fundamental that every effort is made to simplify rules and procedures to promote participation by SMEs in the 7 th Framework Programme and will continue to monitor progress closely in this area. The Commission will undertake further measures to encourage and facilitate SME participation, both in collaborative projects under the various thematic areas and in specific actions targeted at SMEs and SME organisations.
Promoting the take-up of Information and Communication Technologies (ICT), e-learning and e-business is a key element in improving SMEs’ competitiveness. The Commission will continue to support networking between policy-makers in this field through the eBusiness Support Network for SMEs. It will further encourage the exchange and dissemination of best practices, support the training of SME advisers and foster cooperation between ICT suppliers and SMEs. In addition, the CIP will support the deployment of ICT solutions for the benefit of SMEs.
Finally, the Commission intends to improve knowledge about and the analysis of European SMEs’ performance to be able to take action to reinforce their competitiveness. It will improve the ability of existing tools such as the Observatory of European SMEs to analyse economic data and SMEs’ perceptions with a view to obtaining a more comprehensive understanding of their performance and characteristics without adding any direct administrative burden on SMEs.
3.5. Strengthening dialogue and consultation with SME stakeholders.
SMEs are poorly informed about the EU and its activities and sometimes critical of their effect on business. Often, they do not fully grasp the opportunities brought by the EU. The European institutions also need to step up their capacity to listen to SMEs’ concerns and promote, together with Member States, a positive image of entrepreneurship. Reducing the information gap between the European institutions and businesses, particularly SMEs, is essential to reconnect citizens with the European project.[12]
The Commission will promote more regular and better structured dialogue with and consultation of stakeholders. It will aim to reflect the diversity of the audience more fully, from European business organisations to national and local support organisations, small business advisers and, to certain extent, to SMEs themselves. The Commission, and in particular its SME Envoy , is committed to extensive consultation of relevant stakeholders to ensure that their concerns are taken into account in the policy-making process.
While recognising the central role of business organisations in channelling feed-back from SMEs to European institutions, the Commission plans to create a quick and easy-to-use consultation mechanism (“SME panel”) via the Euro Info Centre network to get views from SMEs in specific areas of policy making. In addition, the Commission is currently reviewing the Interactive Policy Making initiative and will propose ways of improving its feedback mechanism to facilitate the identification of SMEs’ problems with EU legislation. Last but not least, the Commission recently published a report on consultation of stakeholders at national and regional levels that makes concrete proposals for improving consultation mechanisms.
Promoting entrepreneurship and the image of SMEs will be a key priority. The Commission will focus on communicating with various stakeholder groups, including at regional level. At the same time, a number of targeted actions will seek to improve the general public’s perception of entrepreneurs in Europe by showcasing successful entrepreneurial practices. A new competition, “European Enterprise Awards”, is being launched in late 2005. This scheme will identify measures that have proved successful in promoting entrepreneurship and SMEs at regional and local levels and facilitate the exchange of best practices in this area.
Finally, the Commission will foster cooperation with Member States and other stakeholders. It will reinforce networking with national administrations on SME issues, while regular meetings with business organisations to discuss policy issues will be continued on a more frequent basis. To ensure wide involvement of all stakeholder groups, the Commission will organise an annual high-level conference to review progress achieved in the implementation of this Communication and to discuss future action. In addition, the Commission will promote SMEs’ participation in high-level groups, round tables and other fora where appropriate and will organise a conference for craft enterprises in 2006.
4. CONCLUSION
The present Communication marks a new start for a more pragmatic, comprehensive and inclusive EU policy in favour of SMEs. It highlights the key role SMEs play in the Partnership for Growth and Jobs. The Communication paves the way towards a strategic approach to make SMEs more competitive, based on streamlining Community policy instruments, on improved synergies between policy areas and on a genuine partnership between the EU and Member States’ actions.
An important objective is to trigger changes in the way SMEs and entrepreneurs are considered in policy-making and by public opinion, both at EU and national level. Indeed, to be successful, SME policy needs to integrate the actual expectations of millions of European enterprises into a wide spectrum of policies. The Communication draws attention to the huge untapped potential of SMEs to create growth and employment and proposes ways to simplify rules and regulations, promote entrepreneurial culture, and assist SMEs in accessing innovation, finance, training and, last but not least, the European as well as international markets. Finally, improved communication and consultation with stakeholders go hand in hand with this new SME policy.
Reaching the objectives set out in this Communication entails the full mobilisation and commitment of all relevant actors, both public and private at regional, national and European level. The Commission will closely follow SMEs’ performance in the economy, will make it a priority to reinforce the coordination of policies towards SMEs both at the EU level and among Member States and will use Community instruments and programmes to carry out actions supporting the competitiveness of SMEs.
[1] See Commission Recommendation 2003/361/EC
[2] Council Recommendation 2005/601/EC on the broad guidelines for the economic policies of the Member States.
[3] Communication from the Commission: Common Actions for Growth and Employment: The Community Lisbon Programme, COM (2005) 330
[4] Communication from the Commission: Implementing the Community Lisbon programme: A policy framework to strengthen EU manufacturing – towards a more integrated approach for industrial policy, COM (2005) 474
[5] COM (2005) 299
[6] COM (2005) 304
[7] Report on the functioning of Community product and capital markets, COM (2002) 743
[8] COM (2005) 535
[9] http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/first_emp/index.htm
[10] COM (2004) 728 final of 29.10.2004
[11] See Communication from the Commission: Implementing the Community Lisbon Programme: More Research and Innovation – Investing for Growth and Employment: A Common Approach, COM (2005) 488 final of 12.10.2005
[12] See the Commission Action Plan to Improve Communicating Europe, July 2005 (SEC(2005) 985)