High-tech SMEs call for a European Small Business Act
A group of 20 European high-tech start-up companies advising the European Commission are calling for the EU and national governments to agree a European Small Business Act, which would allow targets for small companies in public procurement of innovative products and services. The SUN&SUP consortium comprises 20 start-ups, and is funded as a PAXIS project by the Commission's DG Enterprise. The consortium emphasises that European small and medium sized enterprises (SMEs) are smaller and more numerous than their American counterparts, but claim that they are blocked by a glass ceiling that prevents them from becoming global players. Since 1980, US SMEs have generated seven times more global players than their European equivalents. The glass ceiling stems from negative discrimination, according to a statement. 'The rules of competition favour already established enterprises against newcomers, regardless of the quality of their offer. In some cases, contracts which could have been executed as well as or better by innovative SMEs were not awarded to them because of biases based on their size and age. Regulating competition is necessary in order to foster the emergence of new large companies in the economic structure,' claims SUN&SUP. The group is therefore calling for regulation in the form of a European Small Business Act based on a similar arrangement in the US. In 2003, a total of USD 95 billion in public procurement contracts was awarded to US SMEs through the US Small Business Act. European governments currently do not have the right to give their SMEs a preferred supplier status due to a World Trade Organisation (WTO) agreement negotiated in 1995. This is in spite of a clause secured by US negotiators allowing the exclusion of US SMEs from this agreement, according to SUN&SUP. 'A European Small Business Act allowing SME targets in public procurement of innovative products and services should be able to generate 100 billion euro of supplementary contracts for innovative European SMEs on a yearly total of 1,500 billion euro of public procurement. By facilitating the access of innovative SMEs to markets in the whole European Union, a European Small Business Act would foster the emergence of the 1,000 new large companies necessary to meet the Lisbon Agenda and take up the challenges of globalisation,' reads the statement.