Small business in a big world

It is not necessarily the largest chicken that lays the biggest egg. This is true also in business.

The facts speak for themselves: in most European countries, small and medium-sized companies (SMEs) are the ones that create most of the jobs, therefore creating the bullk of economic performance. And because small businesses have relatively small structures and resources, they can react more flexibly to the challenges of the markets. The channel from the boss to the employee is much shorter than in big companies, because many times the owners of the companies deal themselves with day-to-day business. Those SMEs are the backbone of the European economy.

One question remains unresolved in politics: how to set free all the forces of those small and medium enterprises so that they can develop their full potential. For many years already, a commitment to SMEs has become an almost folkloric part of political speeches. Still, however, many entrepreneurs complain about too much bureaucracy in Member States, about difficulties moving into the international arena and accessing necessary financing.

That is why the European Parliament has set up a list of measures and priorities in favour of SMEs, which were formally adopted on Tuesday 23 October 2012. Paul Rübig MEP negotiated this list.

"It is about nothing less then freeing small and medium sized enterprises from their chains in times where economic growth is so urgently needed," he explained.

These are some of Parliament's most important demands:

Mapping the jungle of SME internationalisation funding

The Parliament wants all existing funding instruments for boosting the access of SMEs to third markets to be mapped. There are so many European, national and regional grants that it is not easy to keep an overview of them. This fragmentation leads to a loss of performance.

The European Commission should, as quickly as possible, create a multilingual internet portal which makes it easy for SMEs to find suitable instruments and grants. Double structures at the EU level should be avoided; similar programmes should be rationalised and coordinated. Members of the European Parliament want this mapping and checking to be done on a regular basis.

Less bureaucracy

The main focus of companies should lie on their entrepreneurial activity, on new ideas and business opportunities, not on administration and bureaucracy. The EU is already seeking to reduce the administrative burden of SMEs by 25 percent. The problem is that this is not easily measurable. That is why Parliament wants a new, ambitious, measurable goal for bureaucracy-reduction, which brings noticeable relief for SMEs. The Commission should develop and propose measurable indicators and the so-called High Level Group of former Bavarian governor Edmunds Stoiber should review the goals.

Caution with too many exceptions for micro-enterprises

The European Parliament wants better application of the SME test for new EU laws. At the same time though, it is against exempting micro-enterprises by default from new legislation. This could have an adverse effect: micro-enterprises would avoid growing to the size of a small enterprise because this would create administrative hassle, which they were completely exempted from before.

Boost and finance entrepreneurial thinking

MEPs are demanding better framework conditions and incentives for independent entrepreneurship. Young people and women especially should be motivated to establish companies. Entrepreneurial thinking should be taught in schools. Access to financing should also be facilitated.

For this, the Parliament makes concrete and pragmatic proposals such as, for example, an early entry-into-force of the Late Payment Directive or new rules that make credits under 25 000 Euro available within 15 days.

Furthermore, it considers that the EU Horizon 2020 (grants for research and innovation) and COSME (grants for SMEs) programmes should be better funded.

A special concern for Members of the European Parliament is support for talented young entrepreneurs. A worldwide exchange programme for young entrepreneurs ("Erasmus Mundus for entrepreneurs") should open doors to international markets.

SME policy as part of a new industrialisation

Mr Rübig, who negotiated Parliaments' position, emphasised that SME policy must be part of a coherent and coordinated EU-wide industry policy:

"A new industrialisation of the EU is necessary if Europe wants to stay globally competitive. It is alarming that industrial production has shrunk 10 percent since 2008. This trend needs to be turned around. We have to think about this when we set new rules for SMEs in the EU," he said.

Next steps

The measures proposed in the Mr Rübig's report were adopted by MEPs at their plenary session on Tuesday 23 October 2012, and will act as a call for a speedy implementation of initiatives to improve the lives of SMEs