The EU Enterprise Policy

1. The EU Enterprise Policy

2. Elements The EU and risk taking European Enterprise Policy

3. The EU and Risk-taking

4. Risk-taking Europe has too few entrepreneurs. This is due to economic reasons, to which cultural, societal, historical and legal reasons contribute.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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,

11. 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 volumeof truly innovative projects, capable of generating value rapidly.

12. Risk-taking 3. In Europe, entrepreneurs find it more difficult to gain access to the capital market, which is more fragmented and less liquid.

13. 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

14. 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

15. EU Enterprise Policy Instruments: Multi-annual Programme for Enterprise and Entrepreneurship 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

16. The EU and SMEs

17. Supporting SMEs ‘We need to roll out a red carpet for entrepreneurs, not create red tape’ J.M. Barroso – President of European Commission, 2006

18. 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

19. (c) European Commission, 2005

20. Integration and SMEs • Enhanced opportunities for internationalisation • Increased competition from fewer, larger companies • Sensitivity to change • Regulation and disproportionate costs to SMEs

21. Challenges for SMEs (c) European Commission, 2006

22. Business Constraints European Commission, 2007

23. European Charter for Small Enterprises • Created through Lisbon process – 2000 • Aim: SME support through improved legislative and administrative framework

24. 10 Key areas covered • Education and training for entrepreneurship • Promotion of entrepreneurship and business knowledge in schools • Business-related modules essential to education

25. 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

26. Key areas covered • Cheaper and faster start-up • Comparative cost with ‘competitors’ • Catch-up for most burdensome EU members • Encourage online registration

27. Key areas covered • Better legislation and regulation • Assessment of national bankruptcy laws • Screening of new legislation towards assessment of SME impact • Simplify competition legislation

28. 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

29. 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

30. Key areas covered • Availability of skills • Training institutions and scheme adapted to business needs • Lifelong training

31. Key areas covered • Improving online access • Electronic communication with public authorities including: • Advice • Applications • Tax returns

32. Key areas covered • More out of the Single Market • Advancing reforms in: • Electronic commerce • Telecommunications • Utilities • Public procurement • Cross-border payments

33. 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

34. Key areas covered • Taxation and Financial Matters • Taxation to encourage start-ups and SME expansion • Improved access of SMEs to financial services

35. 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

36. Key areas covered • Strengthen the technological capacity of SMEs • Support of technology dissemination and adaptation • Cooperation on technology • Commercial application of knowledge • Community patent

37. 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

38. 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

39. Key areas covered • Successful e-business models and top-class SME support • Best practice encouragement • Easy to access networks and services • Use of European Observatory of SMEs

40. Key areas covered • Develop stronger, more effective representation of SMEs’ interests in EU and nationally • Review of practices and social dialogue

41. 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