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SMEs
marginalised from EU policy?
Not so new anymore - but nothing changed! Below you find
a slightly edited translation of an article in the German newspaper “Frankfurter Allgemeine
Zeitung”, published 23.
Nov. 2004.
There is much talk about EU Industrial Policy; SMEs
however are only mentioned within
non-committal speeches. These contrasts
with the strong demand from SMEs: for a
better and simplified framework within the internal market, and EU
support for cross-border market entry.
Examples: „We are a German SME and wish to establish e
company in Croatia, we heard that EU subsidy would be available for such
activities.“ Or: „We are a small Biotech
company and we wish to market a newly developed product EU-wide. We
heard that support from an EU research program would be available“.
These or similar questions are frequently asked from SME
representatives to Chambers of Commerce and EU Experts.
The answers to such questions are often disappointing.
True, there exists an EU program for the Western Balkan countries –
however only political and administrative reform is supported.
Companies can only benefit indirectly via the participation in tenders
for construction, supply or service contracts. Could the Biotech
company then expect any support? Well, the EU operates the 6th
Framework Program promoting EU wide research co-operation. However,
commercial related activities like facilitating the market entrance for
innovative products are not supported, but research activities
conducted from at least three partners from different EU countries.
These two examples illustrate that indeed various EU
programs subsidise support, co-operation
and consulting projects from which SMEs in principle may benefit.
Practically SMEs do rarely successfully participate in EU programs.
Significant obstacles for SME participation are the relatively
complicated EU application procedures. A change, although a new
Commission has just been installed, is not in sight. The new
responsible commissioner praises the SMEs as backbone of the EU
economy. But such statements are anything but new. For years the EU
SMEs have been put off with fair words, symbolic actions and appeals
like “Think Small First”. This contrast with the fact that 99,9% of the roughly 20 million EU companies fall
within the new SME definition valid from January 2005*. 93% of EU companies are so
called Micro Enterprises with less then 10 staff.
Whilst the billions/milliards of EU subsidies in their
majority bypass the SME sector, something has been achieved: 260
EU-Info-Centres and 71 Innovation-Relay-Centres are contact points for
companies which are interested in partnering with EU counterparts or in
cross border activities. The EIC have been installed in 1987 to help
SMEs succeed within the internal market, they support interested
companies with information about the EU, the internal market and
related opportunities, at the same time providing the Commission with
feedback related to SME issues. Unfortunately, from our point of view
these structures are neither effective nor efficient in helping SMEs to
gain access to EU support.
Meanwhile the few remaining support instruments for SMEs
have been changed from grant programmes to assistance in form of loans,
credits and the provision of risk-capital. These instruments are
accessible via national agencies for SME development. As reason for
this change unspecified “bad experiences” with program execution are
cited. We are inclined to seek the responsibility for failure in poor
management of these programs from the Commission Services.
The former EU Commissioner installed the function of an
SME-Envoy. However, this institution did
not live up to expectations, because it cannot exert any influence on
SME relevant initiatives within the EU administration.
The new commissioner, Mr. Verheugen,
could paper his office walls with glossy brochures, numerous studies
and papers about support for the EU SMEs. It remains nevertheless
doubtful if he will be able to find some resonance within the EU
apparatus to put into practice the “Benchmarks” and “Best Practices”
recommended within these materials. Further failure in this respect
will only confirm the presumptions held from many EU SMEs and their
staff: that the EU serves only the large corporations, paving the way
to transfer production sites and jobs into countries and regions with
higher financial support or lower wages.
Another complaint of SMEs is also bound to persist: only
large corporation can afford an own EU expert, providing access to EU
financial support or to influence EU policy. Well, there are some
hundred thousand Euros available annually for SME representatives,
mostly spend for still more studies, conferences and related expenses.
More a feeling than assurance to participate in policy development
results from the appointment of SME representatives to EU committees.
Consequently SMEs will continue to be marginalised within EU policy.
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What is to be expected for EU enterprise policy?
To highlight current issues and perspectives
EFEC posted an article describing the EU Enterprise
Directorate’s attitude towards SMEs: a lot of nice talk but no
relevant actions.
It is time that EU SMEs start making themselves heard within “Starship Brussels” .
The message is clear: it does not suffice to hover miles
above economic realities providing well intended advice. Instead, the
Commission Services in order to turn policy objectives into action
need to get their fingers dirty with the economic reality: SMEs
struggle to survive in the day to day business. Consequently any
effective EU policy towards SMEs needs to include
support for SMEs’ business affairs, in particular concerning
participation in the internal market and business internationalisation.
Make yourself heard: forward your
position and/or your ideas for effective EU SME policy
and support to info@eufeco.org
* SME
Definition: less than 250 staff, maximum 250 million Euro annual
turnover, maximum balance sheet total 43 million Euro
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