Select Committee on European Union Written Evidence


Letter and memorandum from the Union of Industrial and Employers' Confederations of Europe (UNICE)

  UNICE welcomes the Commission's initiative. Europe needs to foster entrepreneurship more effectively and we hope that the Green Paper will help to improve entrepreneurship policy at all levels. Increased entrepreneurial activity has a direct impact on the overall economic performance of the EU and entrepreneurship is therefore a crucial element for achieving the Lisbon objectives. UNICE is currently preparing its response to the Green Paper in which it will focus on three main themes. Firstly, taxation and finance for entrepreneurs; secondly, better regulation and simplification; and thirdly, promotion of entrepreneurship, changing attitudes and the role of education.

  Reducing the tax burden is of direct relevance to increasing rewards and frees capital for investment. UNICE believes that an efficient functioning single market and a stable macro-economic environment are all critical pre-conditions for risk-taking by entrepreneurs and that particular attention should also be paid to better regulation and reduction of fiscal and administrative burdens and the promotion of the spirit of enterprise throughout society to change attitudes to risk-taking.

  UNICE is not in a position to submit evidence regarding specific schemes and programmes in the areas of access to finance and support of management and work force skills but I will enclose a paper prepared by Mr Nick Bojas, Senior Policy Adviser at the Confederation of British Industry (CBI), regarding some specific UK schemes and programmes in these areas. In addition, you will find enclosed a one page document, prepared by myself, which lists UNICE's priorities in the area of entrepreneurship and a copy of the section on entrepreneurship which I contained in UNICE's Lisbon Strategy Paper.

UNICE PRIORITIES

  1.  UNICE identifies the following areas on which policy-makers should focus in order to foster entrepreneurship in Europe. These are:

    —  focus on an efficient functioning single market and a stable macro-economic environment;

    —  focus on taxation and finance;

    —  focus on better regulation and simplification; and

    —  focus on promoting entrepreneurship, changing attitudes and the role of education.

  2.  Within the area of an efficient functioning single market and a stable macro-economic environment, UNICE identifies the following central issues which should be addressed. These are:

    —  timely, consistent and uniform transposition of Community law;

    —  liberalisation of utility industries and increasing competition;

    —  a well-developed infrastructure;

    —  reduction of the overall scale of public expenditure and debt; and

    —  integration of capital markets.

  3.  Within the area of taxation and finance, UNICE identifies the following central issues which should be addressed. These are:

    —  reduction of the overall tax burden;

    —  facilitation of the transfer of businesses;

    —  increase access to finance;

    —  improve conditions for R&D investment; and

    —  reduce social security inequities.

  4.  Within the area of better regulation and simplification, UNICE identifies the following central issues which should be addressed. These are:

    —  reduction of administrative burdens;

    —  impact assessment and better consultation; and

    —  reduction of entry and exit barriers.

  5.  Within the area of promoting entrepreneurship, changing attitudes and education, UNICE identifies the following central issues which should be addressed. These are:

    —  teaching entrepreneurial skills at schools and universities;

    —  improve attitudes amongst politicians and civil servants at all levels;

    —  encourage risk-taking by immigrants and women;

    —  change attitudes regarding failure;

    —  promote networking and commercialisation of spin offs; and

    —  secure a qualified workforce.

ENTREPRENEURIAL SPIRIT

UNICE'S EXPECTATIONS

Business calls for favourable framework conditions for more dynamic entrepreneurship. A high level of entrepreneurial activity has a direct impact on the overall economic performance of the EU. UNICE requests the Commission to identify a focused set of actions to foster entrepreneurship in the forthcoming Green Paper. Lower costs and taxes for business, simplicity and less red tape are necessary.

  Entrepreneurship is key to growth and job creation, as was rightly expressed in the Presidency Conclusions of the Barcelona Summit. Entrepreneurs create new sources of wealth, replace old inefficient firms with new innovative ones, and create new jobs. Setting up favourable framework conditions for entrepreneurship is of relevance not only for individuals launching a new business enterprise and for small firms to survive, grow further and develop but also for large firms to continue being entrepreneurial, to adjust and grow.

UNICE'S RECOMMENDATIONS

    —  Promote the spirit of enterprise throughout European societies. All members of society should be made more aware of the key role of entrepreneurship in improving economic well-being. An entrepreneurial culture and skills should be supported in schools and universities and among the working population to encourage individuals to become entrepreneurs. Networking between small and large firms should be promoted to create business opportunities for small firms whilst allowing large firms to spread risks and increase flexibility.

    —  Create room for entrepreneurs and reward risk-takers. A stable and supportive macro-economic environment and an efficiently functioning single market are essential for entrepreneurship. Reducing the tax burden is of direct relevance to increasing rewards for risk-takers, the prospect of which is elemental for entrepreneurs. A high level of government expenditure, in combination with a high level of taxation, damages consumer and business confidence and penalises entrepreneurship.

    —  Release market potential and decrease obstacles. The issue of administrative burden and over-regulation is of major interest for entrepreneurship. In particular barriers to market entry such as excessive procedures to obtain permits, licences and approvals are damaging. Europe should be committed to reducing these obstacles and calculating the direct and indirect costs of regulations and procedures, for instance, by means of establishing a non-political agency independent from the EU institutions. Barriers to exist from markets caused by high penalties associated with failure should also be reduced to alleviate the hardship of failure and create a culture where it is commonplace to restart a business after failure.

    —  Ensure financing of entrepreneurship and employable workforces. Entrepreneurs have to raise money and hire talented staff. Lack of financing is one of the most significant barriers to the start-up and growth of businesses. A well-functioning capital market and appropriate public support initiatives are essential for entrepreneurs. To secure a qualified workforce it is necessary to increase the provision of scientific, technological and management courses throughout the education system. Also, common rules on the mutual recognition of qualifications in the EU should be improved and simplified to increase mobility.

    "Entrepreneurial spirit is essential for a more dynamic enterprise culture in Europe and must therefore be enhanced throughout the education process. We need to generate a more favourable attitude to risk-taking, and to promote and encourage people who are prepared to take risks. We urgently need to change mentalities, starting at school, by explaining the positive aspects of entrepreneurial activity is an opportunity open to all".

José Maria Cuevas,

President of CEOE


 
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