The improvement of the innovative potential of small and medium-sized enterprises (SMEs), promoting their entry to international markets and facilitating their access to financing, were in the focus at the informal meeting of Member States’ ministers for industrial policy on 13 April. Members of the Competitiveness Council agreed that the SME sector is the engine of development and job creation.
The motto of the ministerial meeting at Gödöllő was, “Be innovative, enter international markets.” The Hungarian Presidency prepared a discussion paper with the same title for this event. These were the opening words of Zoltán Cséfalvay, Minister of State for Strategy of the Ministry of National Economy, at the press conference held at the meeting’s mid-session break; which was also attended by Antonio Tajani, Vice-President of the European Commission and European Commissioner for Industry and Entrepreneurship, as well as competent ministers of the other two countries of the Presidency Trio, Belgium and Spain, and also Poland which will take over the Presidency on 1 July.
Summing up the, “vivid discussion” Mr Cséfalvay said, that ministers unanimously believe that the EU and its Member States should do their best in order “to translate the fresh economic recovery into job growth”. To this end it is necessary, “to create growth-friendly environment,” in addition to restoring public finances and stabilising the financial sector, the State Minister said, quoting the most frequent thoughts of the session. This makes it a priority issue to, “support SMEs in accessing financial sources,” underlined by the Minister of State, who regarded this idea as the main message of the informal session.
Financing SMEs in a new way
He reminded others as a consequence of the financial crisis that began two and a half years ago, the financing ability of banks has dropped, which has taken its toll primarily on the SME sector; so we have to find “new ways of financing, aside from banks.” Amongst such methods, Mr Cséfalvay mentioned equity financing, the inclusion of risk capital and resorting to pre-commercial public procurement (In essence, this latter means the separation of available sources for SMEs before announcing tenders for public procurement.)
Speaking at the press conference, Antoni Tajani welcomed the Hungarian Presidency’s consideration on the promotion of SMEs to be a priority. This aim is contributed to by the Small Business Act of 2008, the mid-term revision of which was focused on its harmonising with the Europe 2020 Strategy. He mentioned that every fourth registered SME in the EU was able to export its services or products within the Union, and even of these enterprises, only 50 percent appears on third countries’ markets. Therefore, this autumn the Commission will submit a strategy about the promotion of entering international markets, the Commissioner said.
SME envoys to every country
Tajani also called attention to another initiative of the Commission. Recently, the Commission assigned SME envoys to handle the problems of small enterprises, requesting Member States to do the same. The envoys’ task is to track the transposition of the Small Business Act, and to keep contact with the parties concerned in the SME sector. The envoys’ first session is to be held on 24-25 May in Budapest, on the occasion of the European Enterprise Awards Ceremony.
At the general session, after the keynote speeches by the invited speakers, the ministers praised the Presidency’s choice of topic. Zoltán Cséfalvay noted that the aim of the Presidency was to accept a conclusion about the revision of the Small Business Act, at the session of the Competitiveness Council in May.
Subsidiarity in the support of SMEs
During the discussion, it was pointed out on several occasions that new and rapidly growing SMEs were more affected by the crisis. It was emphasised that administrative burdens on SMEs should be reduced, which is facilitated by the principle of smart regulation. It was also mentioned that the Commission should respect the principle of subsidiarity, i.e. available EU sources should be used at the level where added value could be evidently created. At the press conference, Mr Cséfalvay also pointed out that there are no universal recipes: financing methods for SMEs differ in each country to a great extent.
Tajani thanked the Council for agreeing upon the guideline about payment delays and default, which will unburden SMEs, therefore he encouraged Member States to implement the provisions of the regulation. The Commissioner also mentioned that the cooperation of SMEs could well play a key role in the renewing relationships between the EU and North Africa. New market opportunities will open for European firms and they can also contribute to the economic growth and the mitigation of the migration in African countries.
According to the Europe figures – Eurostat Yearbook 2010, there were an estimated 20.2 million enterprises within the EU-27 non-financial business economy. Of those, approximately 43,000 were large-scale enterprises (LSEs). Hence, the vast majority (99.8 %) of enterprises in the EU are SMEs.
SME (with fewer than 250 employees) generated the majority of value added (56.9 %) and employed most (67.4 %) of the workforce in the non-financial business economy. Micro enterprises (those with fewer than 10 persons employed) played a particularly important role also, providing employment to nearly as many people as large enterprises.