Small Business Act: Unlocking SMEs' potential?

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In 2008, the EU adopted a US-style 'Small Business Act' for Europe to improve market conditions for small and medium-sized enterprises and boost the economy. However, SME groups continue to be critical of implementation at national level despite the European Commission highlighting progress by member states.

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Overview

SMEs, which are defined as companies with no more than 250 employees and a maximum turnover of €50 million, are generally seen as the backbone of the European economy, accounting for 99% of EU businesses and providing around three-quarters of all private sector jobs. 

The Lisbon Growth and Jobs Agenda, adopted in 2000 and aimed at making the EU "the most dynamic and competitive knowledge-based economy in the world by 2010," first recognised the need to boost the competitiveness of SMEs. 

At the June 2000 Feira Summit, the EU endorsed a European Charter of Small Enterprise, the first policy framework seeking to make Europe a "world-class environment" for SMEs. 

Among the many subsequent initiatives was a March 2005 strategy for 'better regulation', aimed at lowering costs for SMEs by reducing the administrative burden they face. 

In November 2005, the Commission presented a new SME policy. Entitled 'Think Small First', it aimed to promote entrepreneurship and skills via education and training, improve market access for SMEs, simplify legislation and improve SMEs' participation in the EU's 7th Framework Programme for Research (FP7) (EurActiv 10/11/05). 

The European Council endorsed the policy in March 2006, backing the establishment of one-stop shops for company registration and measures to reduce the length of time and expenditure required to start up a business. 

Following the presentation of a mid-term review in October 2007, the Commission presented a proposal for a Small Business Act for Europe (SBA) in June 2008, aiming to unite all the existing the initiatives under a single legislative document while also introducing a series of new measures to speed things up. 

The text was adopted by the EU's industry ministers at their meeting on 1 December 2008 (EurActiv 02/12/08).

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