The EU Enterprise Policy
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Transcript of The EU Enterprise Policy
![Page 1: The EU Enterprise Policy](https://reader036.fdocuments.us/reader036/viewer/2022081519/56812ae8550346895d8ed05c/html5/thumbnails/1.jpg)
The EU Enterprise Policy
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Elements
• The EU and risk taking• European Enterprise Policy
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The EU and Risk-taking
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Risk-taking
• Europe has too few entrepreneurs. This is due to
• economic reasons, to which • cultural,• societal, • historical and • legal reasons contribute.
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Risk-takingThe European Union has identified the most important of these to be:
– lack of entrepreneurial culture in schools, universities and other educational institutions,
– excessive punishment for “failure”– fear of loss of "control" of a company, – reluctant attitude towards risk taking.
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Risk-taking
• The US economy has developed financial instruments to provide easy access to capital for high-tech start-ups, which have contributed to creating millions of jobs.
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Risk-takingInformation technologies:Information technologies:
• In Silicon Valley alone eleven new companies were formed every week and one was floated on the stock exchange every five days.
• Every year 300 venture capital companies invest US$ 1 to 3 billion in start-ups there.
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Risk-taking• Between 1981 and 1990 the value of
the PC industry, of which 70% of the firms were supported by venture capital, rose from 0 to $100 billion.
• Compaq(1982), Cisco(1984), Sun(1982), Oracle(1977), and Apple(1976) were all born with the aid of venture capital.
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Risk-taking
• For several years Europe has been taking corrective measures to expand the venture capital markets, but these will not bear fruit until the medium term.
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Risk-taking• Europe’s performance remains
insufficient on three fronts:1.
• Companies in the early stages of development received only 7.4% of the total investments from European venture capital funds, against 34% in the USA,
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Risk-taking• which enables them to grow faster than
their European counterparts and to build up strong positions on the world market earlier.
2.• There is not always a sufficient
volume of truly innovative projects, capable of generating value rapidly.
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Risk-taking3.
• In Europe, entrepreneurs find it more difficult to gain access to the capital market, which is more fragmented and less liquid.
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EU Enterprise Policy
• Aim: – The creation of a favourable environment
for enterprises and business in Europe
• Measures:– Reduced administrative burden– Improved quality of legislation– Facilitating rapid start-up of new companies– Creating an environment supportive to
businesses
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EU Enterprise Policy
• Treaty article 157:– Community should ‘ensure that the
conditions necessary for the competitiveness of the Community industry exist’
– Encourage entrepreneurial initiative– Encourage SME growth
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EU Enterprise Policy
• Instruments: – Multi-annual Programme for Enterprise and
Entrepreneurship• Enhancing the growth and competitiveness of business • Promotes entrepreneurship• Simplifies regulatory framework for business• Improves financial environment for SMEs• Easier access to community support, networks
Not about direct support to SMEs, but an SME policy
– Successor program from 2007: Competitiveness and Innovation Programme
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The EU and SMEs
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Supporting SMEs
‘We need to roll out a red carpet for entrepreneurs, not create red tape’
J.M. Barroso – President of European Commission, 2006
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Characteristics of SMEs
• SME = company with less than 250 employees, turnover up to 50 million €
• 23 million SMEs (99% of all) in the EU
• Key job creator (75 million jobs)
• Source of new (business) ideas
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(c) European Commission, 2005
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Integration and SMEs
• Enhanced opportunities for internationalisation
• Increased competition from fewer, larger companies
• Sensitivity to change• Regulation and disproportionate
costs to SMEs
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Challenges for SMEs
(c) European Commission, 2006
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Business Constraints
European Commission, 2007
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European Charter for Small Enterprises
• Created through Lisbon process – 2000
• Aim: SME support through improved legislative and administrative framework
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10 Key areas covered
1. Education and training for entrepreneurship
• Promotion of entrepreneurship and business knowledge in schools
• Business-related modules essential to education
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Related actions
• The European Enterprise Awards to local initiatives (start at minute 1)
• Mini-companies run by students
• Revision of bankruptcy law and warning system re: financial position
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Key areas covered
2. Cheaper and faster start-up
• Comparative cost with ‘competitors’• Catch-up for most burdensome EU
members• Encourage online registration
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Key areas covered
3. Better legislation and regulation
• Assessment of national bankruptcy laws
• Screening of new legislation towards assessment of SME impact
• Simplify competition legislation
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Related actions
• 60 laws withdrawn• 1,400 laws to be simplified• Dialogue with SMEs within SME
Panels• Encouragement of SME standards
participation (voluntary)• Help on law/regulations via SOLVIT
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Related Action
• Prevention of dominant position and price fixing– Attention to SME complaints
• Grants towards business start-ups up to 2 million euros in poorest regions= Favourable state aid legislation for SMEs
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Key areas covered
4. Availability of skills
• Training institutions and scheme adapted to business needs
• Lifelong training
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Key areas covered
5. Improving online access
• Electronic communication with public authorities including:• Advice• Applications• Tax returns
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Key areas covered
6. More out of the Single Market
• Advancing reforms in:• Electronic commerce• Telecommunications• Utilities• Public procurement• Cross-border payments
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Related actions
• Help towards finding suitable business partners abroad – Euro Info Centres– Innovation Relay Centres
• ‘Your Europe’ business information on other countries
• Public tendering and online solutions
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Key areas covered
7. Taxation and Financial Matters
• Taxation to encourage start-ups and SME expansion
• Improved access of SMEs to financial services
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Related actions
• Set-up of Joint European Resources for Micro and Medium Entreprises (JEREMIE) – bank and investment funds financing
• Framework towards risk capital encouragement and microcredits
• 60% extra spending on SMEs by Community in 2013
• Attraction of regional funds towards SMEs
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Key areas covered
8. Strengthen the technological capacity of SMEs– Support of technology dissemination
and adaptation– Cooperation on technology– Commercial application of knowledge– Community patent
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Related Action
• Competitveness and Innovation budget for 2007-2013 budget: €3.5 bn
• R&D funding towards SMEs €5bn for 2007-2013
• Introducing less complicated evaluation procedures for funds access
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Related Action
• INNOVA initiative for the exchange of successful solutions between business, universities, policy makers, investors, research institutes
• Training on IPR issues• European Design Prize
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Key areas covered
9.Successful e-business models and top-class SME support
– Best practice encouragement– Easy to access networks and services– Use of European Observatory of SMEs
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Key areas covered
10. Develop stronger, more effective representation of SMEs’ interests in EU and nationally
• Review of practices and social dialogue
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References• EU Enterprise Policy
• European Charter of Small Entreprises• EU SME Policy• Implementing the Community Lisbon
Program. Modern SME Policy for Growth and Employment, 2005
• Support Services Across Europe• SME Performance Review