Encouraging small businesses is seen as a key element of Brussels' plan to develop a sector which already provides five million jobs.
Arts, cultural heritage, film, music, publishing, design and new media are part of a growing industry which accounts for 2.6% of Europe's GDP but the full potential of the sector has yet to be unlocked, according to the European Commission, which launched a public consultation in tandem with a Green Paper.
The Green Paper was welcomed by the music industry, which praised the emphasis given to SMEs and market access.
The Commission says promoting investment is essential to enable the sector to flourish and to contribute to sustainable and inclusive growth.
"Europe's cultural and creative industries are not only essential for cultural diversity in our continent; they are also one of our most dynamic economic sectors. They have an important role to play in helping to bring Europe out of the crisis," said Androulla Vassiliou, European commissioner for education, culture, multilingualism and youth.
Digitisation and globalisation are opening new market opportunities, in particular for small businesses, she said. But these businesses very often face obstacles to fulfilling their full potential.
As well as looking for innovative sources of funding, getting the right mix of creative and management skills remains a challenge for micro enterprises.
Cultural and creative industries are contributing to the competitiveness and social cohesion of cities and regions across Europe, the Commission says. European Capitals of Culture such as Lille, Liverpool and others have shown that investing in this sector creates jobs and helps transform the image of cities, it claims.
Cultural and creative industries can also have beneficial spill-over effects on a wide range of other businesses and society at large, according to the EU executive, which points out that designers, for example, have gradually become an essential part of the management team of many big companies.
The public consultation launched by the Green Paper runs until the end of July.