SPECIAL REPORT / Increasing divergence in the performance of Europe’s small and medium sized enterprises (SMEs) is contributing to a jobless recovery and, says a new Commission report calling for more cross-border efforts and a new entrepreneurial policy to redress the situation.
The Commission’s SME Performance Review 2012 report, conducted by consultancy Ecorys, confirmed the domination of the European business market by SMEs, with 98% of all enterprises with some 20.7 million firms and more than 87 million people employees.
The lion’s share of these firms (92%) are micro firms, employing fewer than 10 employees, but performance of across the EU is increasingly divergent, said the report, published yesterday (15 October).
Considerable variance across EU
In the majority of member states, SMEs have so far been unable to bounce back to their pre-crisis levels, the report said.
It assessed the performance of SMEs across member states according to whether countries reached their pre-2008 level of SME real value added and employment, and reviewed the speed of recovery since 2009.
Only Austria, Germany and Malta recovered on their 2008 position, whilst the performance of member states in terms of SME value added and employment growth varied considerably.
Austria, Belgium, France, Germany, Luxembourg and Malta performed above the EU27 average for both employment and ‘value added’. The Czech Republic, Estonia, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia and Spain all performed below the average for the two indicators.
Unbalanced supporting measures
“The implementation of supporting measures for SMEs is still unbalanced with some measures being ignored by a substantial number of countries, such as facilitating a second chance for entrepreneurs who failed once, or taking into account the characteristics of small businesses when designing legislation,” the report added.
Presenting the report on the first day of European SME week, Commissioner for Industry and Entrepreneurship Antonio Tajani said that a new plan to boost entrepreneurship would seek to raise the performance of flagging countries.
"The most ambitious action plan to boost entrepreneurship Europe has ever seen will follow in November. We offer support and advice at a so far unknown level. We try to restore confidence so that SMEs can make progress once again and drag us out of the current crisis,” Tajani said.
SME envoy network to meet in Cyprus next month
The plan will complement and build on the Small Business Act for Europe, driven by the one-year-old network of national SME envoys – whose role is to encourage member states to introduce measures designed to boost small businesses – under the leadership of the chief envoy, Daniel Calleja Crespo.
The next meeting of SME envoys – at which they will discuss progress in specific SME policy areas – will take place during the SME assembly in on 15-16 November in Cyprus.
A spokesman for the Commission told EurActiv that the next congress of the SME envoys will discuss Crespo’s priorities for 2013, including access to finance, licensing, standardisation and access to international markets.
Called for a new Economic Dialogue
A spokesman for UEAPME, the group representing the interests of European crafts, trades and SMEs at the EU level, said that the new system of 27 national SME envoys was “necessary”, but added that “it is not sufficient to fill the gap between decision makers and SMEs”.
UEAPME is now calling for the creation of an “SME Economic Dialogue” composed of Crespo, the Trio of Council Presidencies with their respective SME envoys, MEPs, UEAPME and other representative business organisations.
“The ‘SME Economic Dialogue’ would guarantee the application of the ‘Think Small First’ principle from the outset to all policy initiatives taken at EU level and concerning SMEs. It would also greatly facilitate the quest for better regulation through a constant and constructive dialogue between decision-makers and stakeholders,” the UEAPME spokesman said.
Europe's 23 million SMEs are the backbone of the economy, representing 99% of businesses and accounting for 58% of total turnover in the EU. Their development and growth is essential for enhancing competitiveness and strengthening Europe's attractiveness as a place for investment and production.
European SME Week (15-21 October) is a forum for businesses, policymakers and investors to discuss ideas for promoting the sector.
With more than 1,500 events running across 37 countries and a summit in Brussels on 17 October, European SME Week is organised by the EU Directorate for Enterprise and Industry, as a campaign to promote entrepreneurship and inform entrepreneurs about support available for them at European, national, regional and local level.
15-21 Oct.: European SME Week
- European Central Bank: Survey on the access to finance of small and medium-sized enterprises in the euro area, from October 2011 to March 2012
- European Commission: SME week (General)
- European Commission: European SME Week
- European Commssion: Proposal for a Regulation on European Venture Capital Funds
- European Commission: Annual Report on SMEs in the EU 2011/2012
- European Investment Fund: Website
- European Private Equity and Venture Capital Association: Website