Analytics, Business, Markets and Companies, Modern EU

The European Commission considers SMEs and entrepreneurship in general as a key to ensuring economic growth, innovation, job creation, and social integration. However, several global challenges have been constantly breaking the spirit of certainty, hope and trust among entrepreneurs. In particular, during and after the COVID-19 epidemic tackling these issues would be vital obligations for the national governance.    

More on SMEs in: https://ec.europa.eu/growth/smes/business-friendly-environment/sme-definition_en

Urgent measures

The Commission has adopted a “Coronavirus Response Investment Initiative” in the direct support for citizens, jobs and businesses in the amount of € 37 billion to mitigate the impact of the crisis. Besides, for the first time in the EU’s history, there was a unanimous decision to activate the general escape clause in the Stability and Growth Pact: it means that the member states can use all the firepower they have to support citizens and all kind of businesses during these tough times.

Source: Commission President speech/26.03.2020/ at: https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_20_532

Specifically, the Commission is fast-tracking and promoting research on COVID-19 by mobilizing: - €47.5 million for 17 projects for vaccines and treatment; - €90 million in public and private funds for therapeutics and diagnostics; and - €164 million for SMEs and startups for innovative solutions to tackle the COVID-19 outbreak.

Source: https://www.consilium.europa.eu/en/policies/covid-19-coronavirus-outbreak/

European efforts to support SMEs

The Commission’s specific reactions to COVID-19 from the corporate angle would take various forms; however some general approaches are already in place. Thus, the following aspects have been within the EU’s efforts to stimulate positive actions in the states’ entrepreneurship sphere:

= Creating business friendly environment. At the centre of the Commission's action has been the “Small Business Act for Europe” (so-called SBA), which included a comprehensive guide the SME policy in the member states. For example, the SBA promotes the “think small first” principle and promotes entrepreneurial spirit among the European states’ governance. Other main SBA priorities are: less regulatory burden, access to finance, assistance to global markets and internationalization, to name a few.

More on “Small Business Act” in:

 https://ec.europa.eu/growth/smes/business-friendly-environment/small-business-act_en

= Promoting entrepreneurship. The Commission promotes entrepreneurship through the Entrepreneurship Action Plan, which is aimed at supporting entrepreneurship education and providing additional tools for aspiring entrepreneurs.

More on promoting entrepreneurship in:

https://ec.europa.eu/growth/smes/business-friendly-environment_en

= Improving access to new markets. The Commission’s priority is to ensure that enterprises can rely on a business friendly environment and make the most out of cross border activities, both within the EU Single Market and outside the EU.

However, about 25% of the EU-based SMEs (over 5 mln companies) are involved in export activities and even smaller portion export beyond the EU.

Besides, the Commission aims to help European businesses face competition, access foreign markets, and find new business partners abroad. Going international increases SMEs' performance, enhances competitiveness, and reinforces sustainable growth.

The Commission has installed a special “business portal”, which provides a practical guide to doing business in Europe while supplying entrepreneurs with information and interactive services that help them expand their business abroad.

More on “Your Europe Business Portal” in:

https://europa.eu/youreurope/business/index_en.htm

More on SME internationalisation in:

https://ec.europa.eu/growth/smes/access-to-markets_en

= Facilitating access to finance. Access to finance is the most pressing issue for many small enterprises. The Commission has been working on improving the financing environment for SMEs and providing information on funding: for example, the “Late Payment Directive” strengthens businesses' rights to prompt payment.

The following financial instruments are used to mitigate SMEs problems in the states: loans and guarantees, venture capital, business angels, growth stock markets, crowd funding and fintech/blockchain.

More on access to finance in: https://ec.europa.eu/growth/access-to-finance_en

= Supporting SMEs through competitiveness and innovation. Promoting competitiveness and innovation are key aspects of EU policy in relation to industry and enterprise, in particular for SMEs. On industrial competitiveness in: https://ec.europa.eu/growth/industry_en#competitiveness; On general start-up information in: https://startupeuropeclub.eu/guide/?box=startup; On innovation in: https://ec.europa.eu/growth/industry/policy/innovation_en  

European innovative approach

Fast Track to innovation (FTI) is a fully-bottom-up measure in Horizon 2020 promoting close-to-the-market innovation activities that is open to all types of participants. FTI aims to reduce the time from idea to market and to increase the participation in Horizon 2020 of industry, SMEs and first-time industry applicants.

FTI also aims to nurture trans-disciplinary and cross-sector approaches: i.e. all innovators are stimulated to cooperate in developing sustainable innovative solutions. In this sense, modern EU’s business is to become innovative with the EU’s financial support: EU’ maximum contribution is of €3 mln per proposal with time-to-grant (from the cut-off to the signature of the grant) of around 6 months. 

More on industrial technologies in: https://ec.europa.eu/programmes/horizon2020/en/h2020-section/leadership-enabling-and-industrial-technologies

Proposals for funding must be submitted by consortia comprising between three and five legal entities established in at least three different EU states or countries associated to Horizon 2020.  Within each consortium there must either be an allocation of at least 60% of the budget to industry participants or the consortium must include a minimum of two industry participants in a consortium of three or four partners, or three industry participants in a consortium of five partners.

Source: https://ec.europa.eu/easme/en/eic-fast-track-innovation-fti-0 

No doubt, innovative approach is important; at the same time modern online trends in corporate activities (instigated by the COVID-19 in the first part of 2020) have shown that all sectors of entrepreneurship are subject to “digital technologies”. In short, the whole entrepreneurship has turned into a “business technology”, including education and training.  

Specific support for start-ups and scale-ups

The Commission's 'Start-up and scale-up initiative' aims to give Europe's many innovative entrepreneurs every opportunity to become world leading companies. It brings together all the possibilities that the EU already offers and adds a new focus on venture capital investment, insolvency law, taxation and more.

More in Commission communication on start-ups and scale-ups:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2016:733:FIN

General link for these issues: https://ec.europa.eu/growth/smes/; in particular, on tourism: Eteris E. Tourism in the World, Europe & the Baltics. In:

http://www.baltic-course.com/eng2/editors_note/?doc=20747&ins_print. 

Several examples of tackling the emerging problems have already been visible: e.g. the FXB association has developed an approach that mixes training, personal and material support. It also measures its impact and uses the findings from these evaluations to make appropriate modifications in cooperation with partners, including the King Baudouin Foundation. More about the project in: https://www.kbs-frb.be/

 Breaking the spiral of poverty and despair is the idea of the Belgian FXB association which has developed an approach that mixes training, personal and material support. It also measures its impact and uses the findings from these evaluations to make appropriate modifications in concentration with its partners, including the King Baudouin Foundation. Bottom line: all eyes on SMEs!

More about the project: https://www.kbs-frb.be/ and a newsletter in: https://www.kbs-frb.be/en/Newsroom/Stories/20200129AJ2?utm_source=newsletter&hq_e=el&hq_m=6018745&hq_l=4&hq_v=0ec8ea7c9a  

Collaborative economy

The collaborative economy, sometimes called the sharing economy, covers a great variety of sectors and is rapidly emerging in the EU states: ranging from sharing houses and car journeys, to domestic services. The collaborative economy provides new opportunities for citizens and innovative entrepreneurs.

But it has also created tensions between the new service providers and existing market operators. The European Commission is looking at how to encourage the development of new and innovative services, the temporary use of assets, while ensuring adequate consumer and social protection.

Source: https://ec.europa.eu/growth/single-market/services/collaborative-economy_en

Commission’s information resources on key European support networks and information for SMEs: 

= the Your Europe Business Portal is a practical guide to doing business in Europe. It provides entrepreneurs with information and interactive services that help them expand their business abroad; 

= the Enterprise Europe Network helps SMEs and entrepreneurs access market information, overcome legal obstacles, and find potential business partners across Europe; 

= the SME Internationalisation support page provides information on foreign markets and helps European business internationalize their activities; and  = the single portal on Access to Finance helps SMEs find finance supported by the EU.