Select Committee on European Union Minutes of Evidence


Memorandum submitted by the European Commission

1.  POLICIES AND PROGRAMMES SUPPORTING BUSINESS DEVELOPMENT AND GROWTH

SMEs' needs and concerns are incorporated into most EU policies and programmes. Nonetheless, the Enterprise Directorate-General undertakes specific initiatives in favour of access to finance and the development of skills, which were identified by the call for evidence as particularly important. Summary descriptions of these initiatives, including the key findings as far as available, are provided below.

  1.1  The Multiannual Programme for Enterprises and Entrepreneurship (MAP)[1] brings together stakeholders to discuss shared problems and to exchange good practice in a number of areas including education and training and access to finance:

    1.1.1  The Commission ran a benchmarking project on entrepreneurship education and training, which helped experts from the Member States' and Norway to share and learn from each other's experience regarding the promotion of entrepreneurship teaching in the education systems. The project found considerable commitment at national level to promote entrepreneurship teaching, but noted that such programmes are not generally available to students. The Commission, in co-operation with experts from the Members States and the Candidate Countries, is now concentrating on elaborating methodological tools. In addition a project for management capacity building aims to identify and disseminate good practice in this area.

"Creating an entrepreneurial Europe"—pages 25-27

    1.1.2  In the area of access to finance, the Commission benchmarked business angel policies within the EU. The project's conclusions emphasised the increasing role of business angels in start-up and early-stage equity finance, and recommended improving financing conditions, considering public support for building a business angel market place and assessing the effects of taxation. It also identified a need to raise awareness in several Member States and Candidate Countries regarding the benefits of business angel finance. The Commission furthermore facilitates dialogue among stakeholders through discussions on finance in the Candidate Countries, micro-credits and a Code of Conduct for banks and SMEs.

The Financial Instruments aim to improve the financial environment for businesses, especially SMEs by bridging the gaps that financial markets would otherwise leave open. Three are implemented via the intermediary of the European Investment Fund (EIF); the SME guarantee facility provides guarantees to financial institutions to cover credits to SMEs; the ETF Start-up Facility supports business creation and financing by investing in specialised Venture Capital Fund and Business Incubators; and the Seed Capital Action provides support for recruiting investment managers with a view to reinforce the venture capital industry's capacity for investing in seed capital. In addition the "Joint European Venture" programme supports the creation of trans-national joint ventures among SMEs within the EU.

"Creating an entrepreneurial Europe"—pages 50-59

  1.2  The sixth Framework programme for RTD[2]covers, inter alia, promoting innovation. It aims to encourage and validate initiatives to promote the creation and growth of innovative business, notably through the initiatives "Paxis" and "Gate2Growth", which concentrate on networking and the exchange of good practice. The framework programme will also support pilot actions to promote adapting to change and entrepreneurial innovation, focussing on firm growth, including entrepreneurship within larger companies. The increasing importance of innovation through entrepreneurial initiative and entrepreneurship is also dealt with by the Commission's recent Communication on Innovation Policy.[3]

"Creating an entrepreneurial Europe"—pages 41, 74

2.  EVALUATING AND IMPROVING EU ENTERPRISE POLICY

To assess whether the EU policies and programmes, as described above, are well targeted and implemented effectively, the Commission not only carries out specific evaluations, but also applies procedures to assess the impact of EU regulation and policies on businesses and to consult stakeholders directly.

  2.1  Reinforcing the evaluation of commission activities is a key element of the new management culture promoted by the current reform of the commission, which established a general principle of regular evaluation of Commission activities. The Commission considers that evaluation should support policy development and continuous improvement of the effectiveness of activities. Evaluation findings should ultimately contribute to decision-making on priorities and resource allocation.[4] New standards and good practice on evaluation which will come in to force later this year will further enhance the organisation and transparency of the commission's evaluations.

  2.2  The Financial Instruments were assessed in the yearly report of the Growth and Employment initiative. Their impact was considered positive: the guarantee instruments benefited about 100,000 SMEs with a total lending of almost

10 billion, following a total contribution of about

200 million. This means that this instrument has been able to mobilise SME lending worth 50 times the Community input. On venture capital investments, the EIF had signed contracts with 18 funds for a total amount of about

120 million, which raised about

540 million, so far benefiting over 200 SMEs. This demonstrating the substantial leverage of Community funds.

  2.3  The MAP is shortly to be the subject of an overall external evaluation. The Commission expects to be able to draw on this evaluation to both improve the current MAP and to aid in the development of any successor. The Framework Programmes for RTD are subject to both annual monitoring and a five-year assessment.

  2.4  As part of its Better Regulation Action Plan, the Commission has established a new impact assessment procedure.[5] It aims to improve the quality of the Commission's policy proposals in terms of their efficiency, effectiveness and coherency. It identifies the likely positive and negative impacts of proposed policy actions, with a particular focus on economic (including business), environmental and social effects. Consulting stakeholders according to the Commission's new minimum consultation standards[6]is an integral part of the impact assessment process for major policy initiatives.

  2.5  SMEs can directly influence European Community legislation and programmes, in the first place through their local Euro Info Centre (EIC). The EIC network has 300 contact points in the EU, regularly feeding back company concerns to the Commission, notably through the Interactive Policy Making Initiative, with a view to prevent recurring obstacles to business and to involve businesses in European policy making at an early stage. It also contributes to make EU policy more transparent, comprehensive and effective.

3.  CO -ORDINATING ENTERPRISE POLICY WITH MEMBER STATES AND AT EU-LEVEL

  3.1  In order to help Member States developing their policies, the Council introduced the "Open method of co-ordination" in 2000.[7] This involves defining policy guidelines, performance indicators and examples of best practice that can be adapted to national and regional conditions. Within the field of enterprise policy this has led to the Best Procedure, where Commission and Member States' experts jointly identify benchmarks and examples of best practice in selected areas.

  3.2  In 2000 the Council endorsed the Charter for Small Enterprises,[8] which calls upon Member States and the Commission to support small enterprises to take full advantage of the knowledge-based economy. The Commission publishes annual implementation reports, which provide an overview of progress made by both the Member States and the Commission towards achieving the Charter's objectives.

  3.3  To co-ordinate SME policy within the Commission, the SME Envoy is designated to listen to SMEs and their representatives and to raise SME concerns with the different Commission services. To this end, the SME Envoy monitors SME-related issues, assesses SME needs in EU programmes and polices and facilitates interaction between SME organisations and the Commission. The SME Envoy has acquired visibility in the business community, via numerous contacts with European and national business organisations. For 2003, the SME Envoy intends to enhance contacts with the business community, in particular in the candidate countries.


1   Council Decision (2000/819/EC) of 20 December 2000 on a Multiannual Programme for Enterprise and Entrepreneurship, and in particular for SMEs (2001-05) OJ L 333/84, 29.12.2000. Back

2   Decision No 1513/2002/EC concerning the sixth framework programme of the EC for research, technological development and demonstrating activities, contributing to the creation of the European research area and to innovation (2002-06). Back

3   "Innovation policy: updating the Union's approach in the context of the Lisbon strategy", 11.03.2003, COM (2003) 112 final. Back

4   "Strengthening evaluation of Commission activities", SEC (2000) 1051. Back

5   Action plan "Simplifying and improving the regulatory environment", COM (2002) 278 final, and "Impact Assessment", COM (2002) 276 final, 05.06.2002. Back

6   "Towards a reinforced culture of consultation and dialogue-General principles and minimum standards for consultation of interested parties by the Commission", COM (2002) 704 final 11.12.2002. Back

7   Presidency Conclusions, Lisbon European Council, 23-24 March 2000. Back

8   Endorsed by EU leaders at the Feira European Council, 19-20 June 2000. Back


 
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