SMEs getting the benefit of the Union - report

Aid, attention and assistance offered by the European Union's programmes and institutions are helping SMEs (small and medium sized enterprises) to bring the Lisbon summit's goal of a knowledge-based economy closer to reality according to a European Commission report which has ...

Aid, attention and assistance offered by the European Union's programmes and institutions are helping SMEs (small and medium sized enterprises) to bring the Lisbon summit's goal of a knowledge-based economy closer to reality according to a European Commission report which has just been made available online.

'Creating an entrepreneurial Europe: the activities of the European Union for small and medium sized enterprises (SMEs)' lists the support available to SMEs and reports back on their success. Funding, research and development cooperation, international agreements, regulatory issues and administrative reforms are just some of the issues which it tackles.

According to the report, SMEs have had more budget and attention dedicated to them in the last four years, going on to state that 'SMEs are at the centre of European policymaking'.

It points to the high priority given to SMEs in areas such as distribution of Structural funds, where 18 per cent of the Funds' budget (over 21 billion euro) was dedicated to SMEs in the period from 1994 to 1999. The methods of providing more access to funding for SMEs has also been strengthened, with the establishment of new entities. The European technology facility (ETF, boasting a budget of 125 million euro), the European technology facility start up (ETF start up, with 168 million euro), the SME guarantee facility (with 168 million euro) and the Joint European venture (JEV with 84 million euro) are all designed to assist budding SMEs. The European Investment Bank (EIB) and the European Innovation Fund (EIF) have been fundamental in helping SMEs too, with 49,000 SMEs having received an EIB loan in the last five years.

In research and development assistance, once the companies have begun operating, SMEs are taking more advantage of the EU assistance available. The EU's Fourth Framework programme (FP4), which ran from 1994 to 1998, saw the number of SMEs double compared with the previous Framework programme. These participants received over 20 per cent of the total budget and were largely (64 per cent) newcomers to participating in these kind of programmes or in some cases (63 per cent) being involved in R&D cooperation at all.

The levels of participation of SMEs in the current Fifth Framework programme (FP5) are expected to be even higher, especially as the SMEs who took part in FP4 clearly benefited from the experience. Some 43 per cent of them increased their turnover, 53 per cent accessed new markets and 42 per cent created new jobs and over 95 per cent of them said they would do it all again.

FP5 has added features benefiting SMEs, such as the allocation of at least 10 per cent of each thematic programme's budget to SMEs, at the request of the European Parliament. In addition, there is a horizontal programme dedicated to 'innovation and participation of SMEs', which helps to coordinate the instruments available to SMEs under FP5, which also provides a helpdesk for all SME enquiries. Already the spread (across both programmes and countries) and successful participation of SMEs in FP5 is better than FP4, with a greater spread across Member States attributed to the effort of the SME national contact points.

The report also recognises the importance of other programmes such as the eEurope initiative which is helping to establish an environment where all parties, including SMEs, can be better equipped to deal with the digital age. And it also refers to the progress made in establishing an employment framework under the Luxembourg process and a regulatory environment under the Cardiff process which are suited to fostering SME progress.

But the report concludes that more still needs to be done. It recognises that more must be done to find out the effect of some of the programmes mentioned on SMEs. Monitoring is still needed so that the most detailed and up to date analyses can be made. Benchmarking can then set the goals to be attained. The report hopes that it will help tackle one of the most common problems, which is accessibility to Community programmes. While the administrative side of SME participation has been simplified, there is still a need to disseminate information on these programmes in order for SMEs to apply for participation.