Report shows candidate countries must work more on entrepreneurship
A report on the candidate countries' efforts to improve entrepreneurship and competitiveness has found improvements in education, public administration and support services for enterprises, but recommends more work in access to finance, particularly for small and medium sized enterprises (SMEs), the creation of an innovation culture among enterprises and labour market flexibility. The report was carried out by representatives from the business community and public authorities in the candidate countries and mirrors a report carried out in the EU Member States in 1998, the BEST (business environment simplification) report. This new report has been named 'CC BEST'. The report includes a profile of each of the candidate countries in which two best practices from each country are highlighted. One example is in Malta, where a Small business efficiency unit (SBU) has been formed, which acts as a facilitator in contacts between business and administration - another example is the one-stop-shop network' in Romania, through which new companies can register and receive the necessary operating permits. 'In the area of education for an entrepreneurial society, a large number of practices exist and they are generally coordinated between the public authorities, the educational institutions, including universities, and, to a lesser extent, the business community,' according to the report. Many new initiatives are currently being pilot tested, including courses on the market economy and the setting up of fictitious companies in vocational schools. The report identified a number of areas for further work, including the strengthening of links between public authorities, schools, universities and the business community, the designing of curricula that respond more to the needs of small businesses, encouraging students to set up their own businesses. The candidate countries also need to address the issue of promoting entrepreneurship within the context of tight budgetary constraints, according to the report. The report found that 'most candidate countries seem aware of the need to streamline procedures and reduce as much as possible the administrative burdens for enterprises, in particular new and fast growing companies'. The supply of support services to enterprises is regarded in a positive light by the report, although it emphasises that the quality of the support differs significantly between urban and rural regions. 'Business organisations are often not sufficiently developed in the candidate countries, and are therefore unable to provide effective services to enterprises,' it says. The European Commission is addressing this problem by providing support through the PHARE Business support programme. The report highlighted the work needed in the area of financial support for SMEs in the candidate countries, with none of the countries having presented satisfactory conditions, according to the report. 'There are huge needs in this area and relatively few good practices have been identified. Access to finance, together with excessive bureaucracy, is always listed by entrepreneurs as the main barriers to business development. It is still difficult for SMEs to get sufficient credit on reasonable terms,' states the report. Improvements in recent years are however noted, many of these facilitated by the introduction of guarantee schemes and dedicated SME credit lines. Despite these, 'there is still a need in all countries to increase the capacity to generate new business ideas and prepare sound business plans,' claims the report. Areas which the report recommends the candidate countries address include the key success factors for effective guarantee schemes, the risk of state financing programmes leading to bad loan portfolios and the potential role of alternative financial sources such as business angel networks and micro credit schemes. The report claims that 'the creation of an innovation culture among enterprises, and in particular SMEs, is far from being achieved. More can be done to promote technology transfers, disseminate research results, foster cooperation between research centres and enterprises and encourage inter-firm linkages.' The report also recommends that the countries address the facilitation of technology transfers and more user friendly SMEs. The report was carried out in order to give the candidate countries the opportunity to share their experiences with each other and learn from each other's experiences. The activity was also intended to illustrate to the candidate countries what EU Member States are carrying out in this area, and to inform them on EU enterprise policy. Candidate countries have to foster the competitiveness of their economies in preparation for accession. The reform of legislation and administrative structures must however go together with the promotion of a climate in which enterprises can be created and flourish and the entrepreneurial spirit is encouraged.