Cutting administrative red tape is the first step towards releasing SMEs' innovative potential.
eveloping the right environment for SMEs to thrive in has long been considered a vital part of the European Union's plans for sustaining future economic growth. In June 2000, a detailed blueprint for this development, the European Charter for Small Enterprises(1), was adopted by the General Affairs Council and later welcomed by the Feira European Council.
The Charter is a direct result of the Lisbon meeting of the European Council in March, which committed the EU to becoming the "most competitive and dynamic knowledge-based economy in the world" by the end of the decade.
Seeds of success
The Charter recognises the importance of SMEs as a source of employment - and hence as a key component of a sustainable European economy. Importantly, it stresses the need to cut red tape so that SMEs can expand without becoming snared in excessive bureaucracy.
The Charter acknowledges that there must be adequate reward for SMEs' success in reacting dynamically to rapidly changing market places. The role they play in social and regional development within the new knowledge economy is also stressed. The Charter does not ignore the risks involved in entrepreneurship either, stating that "some failure is concomitant with responsible initiative and risk-taking and must be mainly envisaged as a learning opportunity".
Furthermore, it pledges to make certain that the correct fiscal and regulatory framework is in place, and offers a commitment to "ensuring access to markets on the basis of the least burdensome requirements". By providing access to finance and the best research and technology, the Charter pledges that "the EU will offer the best environment for small business in the world".
In the field of education and training, the Charter wants entrepreneurship to be taught at all school levels, while training institutions will be encouraged to adapt programmes to the specific needs of SMEs.
It also encourages SMEs to co-operate more closely so as to strengthen their technological capacity. Inter-firm clusters and networks will be supported as well as pan-European co-operation between small enterprises. SMEs will be encouraged to adopt successful e-business models in the pursuit of best practices.
Wherever possible, the Charter asks for regulations to be simplified so that companies can be created quickly and, conversely, not pilloried in the event of failure. In line with this, tax systems "should be adapted to reward success (and) encourage start-ups".
The UEAPME(2) has supported the ideas and the adoption of the Charter, drawn up by the Commission and the Member States. Furthermore, the Economic and Social Committee(3) is in favour of the proposals, backing the Charter in a spring 2000 opinion.
To ensure rapid progress, the Charter includes an obligation to "monitor and evaluate progress annually ... at the Spring Summit". In the Charter, Member States commit themselves to working towards its goals using the method of 'open co-ordination' of national enterprise policies.
(1) The text of the European Charter for Small Enterprises is available at http://europa.eu.int/comm/enterprise/enterprise_policy/charter.htm
(2) The European Association of Craft and Small and Medium-sized Enterprises, http://www.ueapme.com/
(3) The Economic and Social Committee, http://www.ces.eu.int/