Transcript The EU Enterprise Policy Elements • The EU and risk taking • European Enterprise Policy.

The EU Enterprise
Policy
Elements
• The EU and risk taking
• European Enterprise Policy
The EU and Risk-taking
Risk-taking
• Europe has too few entrepreneurs.
This is due to
• economic reasons, to which
• cultural,
• societal,
• historical and
• legal reasons contribute.
Risk-taking
The European Union has identified the
most important of these to be:
– lack of entrepreneurial culture in schools,
universities and other educational
institutions,
– excessive punishment for “failure”
– fear of loss of "control" of a company,
– reluctant attitude towards risk taking.
Risk-taking
• The US economy has developed
financial instruments to provide
easy access to capital for high-tech
start-ups, which have contributed
to creating millions of jobs.
Risk-taking
Information technologies:
• In Silicon Valley alone eleven new companies
were formed every week and one was floated
on the stock exchange every five days.
• Every year 300 venture capital companies
invest US$ 1 to 3 billion in start-ups there.
Risk-taking
• Between 1981 and 1990 the value of
the PC industry, of which 70% of the
firms were supported by venture
capital, rose from 0 to $100 billion.
• Compaq(1982), Cisco(1984),
Sun(1982), Oracle(1977), and
Apple(1976) were all born with the aid
of venture capital.
Risk-taking
• For several years Europe has been
taking corrective measures to
expand the venture capital
markets, but these will not bear
fruit until the medium term.
Risk-taking
• Europe’s performance remains
insufficient on three fronts:
1.
• Companies in the early stages of
development received only 7.4% of the
total investments from European
venture capital funds, against 34% in
the USA,
Risk-taking
• which enables them to grow faster than
their European counterparts and to build
up strong positions on the world market
earlier.
2.
• There is not always a sufficient
volume of truly innovative projects,
capable of generating value rapidly.
Risk-taking
3.
• In Europe, entrepreneurs find it more
difficult to gain access to the capital
market, which is more fragmented and
less liquid.
EU Enterprise Policy
• Aim:
– The creation of a favourable environment
for enterprises and business in Europe
• Measures:
– Reduced administrative burden
– Improved quality of legislation
– Facilitating rapid start-up of new companies
– Creating an environment supportive to
businesses
EU Enterprise Policy
• Treaty article 157:
–Community should ‘ensure that the
conditions necessary for the
competitiveness of the Community
industry exist’
–Encourage entrepreneurial initiative
–Encourage SME growth
EU Enterprise Policy
• Instruments:
– Multi-annual Programme for Enterprise and
Entrepreneurship
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Enhancing the growth and competitiveness of business
Promotes entrepreneurship
Simplifies regulatory framework for business
Improves financial environment for SMEs
Easier access to community support, networks
Not about direct support to SMEs, but an SME policy
– Successor program from 2007: Competitiveness
and Innovation Programme
The EU and SMEs
Supporting SMEs
‘We need to roll out a
red carpet for
entrepreneurs, not
create red tape’
J.M. Barroso – President of
European Commission, 2006
Characteristics of SMEs
• SME = company with less than 250
employees, turnover up to 50 million €
• 23 million SMEs (99% of all) in the EU
• Key job creator (75 million jobs)
• Source of new (business) ideas
(c) European Commission, 2005
Integration and SMEs
• Enhanced opportunities for
internationalisation
• Increased competition from fewer,
larger companies
• Sensitivity to change
• Regulation and disproportionate
costs to SMEs
Challenges for SMEs
(c) European Commission, 2006
Business Constraints
European Commission, 2007
European Charter for Small Enterprises
• Created
through
process – 2000
Lisbon
• Aim: SME support through
improved legislative and
administrative framework
10 Key areas covered
1. Education and training for
entrepreneurship
• Promotion of entrepreneurship and
business knowledge in schools
• Business-related modules essential to
education
Related actions
• The European Enterprise Awards to
local initiatives (start at minute 1)
• Mini-companies run by students
• Revision of bankruptcy law and
warning system re: financial
position
Key areas covered
2. Cheaper and faster start-up
• Comparative cost with ‘competitors’
• Catch-up for most burdensome EU
members
• Encourage online registration
Key areas covered
3. Better legislation and regulation
• Assessment of national bankruptcy
laws
• Screening of new legislation towards
assessment of SME impact
• Simplify competition legislation
Related actions
• 60 laws withdrawn
• 1,400 laws to be simplified
• Dialogue with SMEs within SME
Panels
• Encouragement of SME standards
participation (voluntary)
• Help on law/regulations via SOLVIT
Related Action
• Prevention of dominant position and
price fixing
– Attention to SME complaints
• Grants towards business start-ups up to
2 million euros in poorest regions
= Favourable state aid legislation for SMEs
Key areas covered
4. Availability of skills
• Training institutions and scheme
adapted to business needs
• Lifelong training
Key areas covered
5. Improving online access
• Electronic communication with
public authorities including:
• Advice
• Applications
• Tax returns
Key areas covered
6. More out of the Single Market
• Advancing reforms in:
• Electronic commerce
• Telecommunications
• Utilities
• Public procurement
• Cross-border payments
Related actions
• Help towards finding suitable business
partners abroad
– Euro Info Centres
– Innovation Relay Centres
• ‘Your Europe’ business information on
other countries
• Public tendering and online solutions
Key areas covered
7. Taxation and Financial Matters
• Taxation to encourage start-ups
and SME expansion
• Improved access of SMEs to
financial services
Related actions
• Set-up of Joint European Resources for Micro
and Medium Entreprises (JEREMIE) – bank
and investment funds financing
• Framework towards risk capital
encouragement and microcredits
• 60% extra spending on SMEs by Community
in 2013
• Attraction of regional funds towards SMEs
Key areas covered
8. Strengthen the technological
capacity of SMEs
– Support of technology dissemination
and adaptation
– Cooperation on technology
– Commercial application of knowledge
– Community patent
Related Action
• Competitveness and Innovation
budget for 2007-2013 budget:
€3.5 bn
• R&D funding towards SMEs €5bn
for 2007-2013
• Introducing less complicated
evaluation procedures for funds
access
Related Action
• INNOVA initiative for the
exchange of successful
solutions between business,
universities, policy makers,
investors, research institutes
• Training on IPR issues
• European Design Prize
Key areas covered
9.Successful e-business models and
top-class SME support
– Best practice encouragement
– Easy to access networks and services
– Use of European Observatory of SMEs
Key areas covered
10. Develop stronger, more
effective representation of
SMEs’ interests in EU and
nationally
• Review of practices and social
dialogue
References
• EU Enterprise Policy
• European Charter of Small Entreprises
• EU SME Policy
• Implementing the Community Lisbon
Program. Modern SME Policy for Growth
and Employment, 2005
• Support Services Across Europe
• SME Performance Review