Adopted in June 2008 and inspired by the American SBA, the European Small Business Act (SBA), a strategic framework for exploiting the growth and innovation potential of SMEs, was revised this September. Eurochambres, the European Association
of Chambers of Commerce and Industry counting 46 members (44 national and 2 transnational delegations of Chambers of Commerce and Industry) made its position clear in Brussels for the renewal of this roadmap.
Europe dominated by start-ups and micro-enterprises First and foremost, Eurochambres was keen to observe the face of European enterprises today. According to the latest statistics on the continent’s enterprises, the European Union holds 20.7 million SMEs, making up 98 % of the continent’s enterprises. Not only this, the EU is dominated by start-ups and micro-enterprises (92.2 % of enterprises).
These enterprises have been hit by the crisis. Indeed, the number of jobs accounted for by these SME declined from 88.3 million to under 86 billion between 2008 and 2012, and production fell from 3.5 trillion euros to under 3.4 trillion euros over the same period.
So an obvious question has emerged: what needs to be done to revive the European Union’s economic sector?
Accelerate procedures and implement SBA principles
The 21st century’s global economy is moving fast, and policymaking needs to follow this market tempo. Laws therefore need to be speeded up, and to become more reactive.
“The gap between the adoption and the delivery of SME policy is sometimes alarming. We have a late payment directive that obliges public administrations to pay bills in 30 days, but in Italy it still takes 170. We have an objective to reduce business start-up time to three days, but in 2012 it was still taking 5.4 days,” commented Secretary General Arnaldo Abruzzini.
In addition, amongst those waiting the longest, almost 30 % of French enterprises see their bills paid in over 60 days. Overall, on the European level, mass liquidity to the worth of hundreds of billions of euros is delayed in payment.
After reviewing the 10 principles of the SBA, it was decided that that the same objectives
would be kept, namely:
I Creating an environment in which entrepreneurs and family enterprises can prosper and where the spirit of enterprise is rewarded
II Enabling honest entrepreneurs forced to declare themselves bankrupt to rapidly benefit from a second chance
III Defining rules according to the principle of “Think Small First”
IV Ensuring the reactivity of administrative bodies to the needs of SMEs
V Adapting the tools of public powers to the needs of SMEs: facilitating the participation of SMEs in public markets and better exploiting the possibilities offered to SMEs in terms of State grants
VI Facilitating the access of SMEs to financing and setting up a legal and trade environment conducive to punctual payment of bills in the context of trade transactions
VII Helping SMEs to take further advantage of the potentialities of the single market
VIII Promoting the reinforcement of qualifications within SMEs and innovation in every form
IX Enabling SMEs to transform environmental challenges into opportunities
X Encouraging and helping SMEs to take advantage of market growth
Fighting youth unemployment, improved communication, better financing
However, it has been necessary to add a new priority: the fight against unemployment. Given the alarming level of youth unemployment, Eurochambres has suggested the adoption of vocational teaching and training schemes to better meet the needs of enterprises that fail to find candidates with the level of skills that they seek.
The Chamber association also advocates better use of European schemes, such as the European Social Fund, the Globalisation Adjustment Fund, Youth Guarantees or Erasmus for Young Entrepreneurs, to ensure the required coherence, continuity and synergies.
The European Social Fund is to bring short-term measures by supplying administrative and financial support to companies employing young people or long-term unemployed persons as in the case of French “contrats de generation” (“generation contracts” to facilitate the integration of young people in the job market).
At the same time, the “Think Small First” principle should not to remain an abstract leitmotiv but, according to institution, be integrated in the national laws of each Member State, the aim being to facilitate procedures for small enterprises.
The Chamber association also pored over the issue of bankruptcy risks for enterprises. What emerges is that we tend to forget that while this phenomenon can have disastrous consequences, it is also part of the dynamic of a healthy economy. Rather than trying to eliminate it, energy should be spent on helping entrepreneurs to manage financial difficulties. In concrete terms, this is a matter of limiting the length of solvency procedures, and also making a clearer distinction between dishonest bankruptcies from
honest ones and providing honest entrepreneurs with quick and flexible procedures for getting started again.
Finally, key measures include encouraging the growth of national-scale networks of SME representatives for greater exchange on the Small Business Act.
For further information:
The European portal for SMEs: http://ec.europa.eu/small-business/policy-statistics/facts/index_fr.htm