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EU measures for SMEs reaping results

All rights reserved © Alexander Raths

The Competitiveness and Innovation Programme (CIP) promotes actions that address the challenges European industry is facing, with a special focus on the needs of small and medium-sized enterprises. The programme has been successful in meeting its main objectives according to a recent report, which highlights several of its achievements. Building on CIP's results, its funding successor – the new Programme for the Competitiveness of Enterprises and SMEs (COSME) - is expected to further strengthen and streamline actions in this field from 2014 onwards.

Two years ago the European Commission launched Europe 2020 the EU's strategy for the current decade, whose main priorities are smart, sustainable and inclusive growth. Smart growth implies developing an economy based on knowledge and innovation. Sustainable growth calls for making the EU economy and its production more resource efficient and competitive; whereas inclusive growth refers to a high-employment based economy delivering economic, social and territorial cohesion.

The CIP's performance reportpdf Choose translations of the previous link , published in March 2012, shows that the programme and its three sub-programmes - the Entrepreneurship and Innovation Programme (EIP), the Information and Communication Technology Policy Support Programme (ICT-PSP) and the Intelligent Energy Europe Programme (IEE) - have been financing activities that can contribute to meeting these objectives.

Thanks to € 3.6 billion earmarked for the period 2007-2013, CIP has been helping the start-up and growth of SMEs through better access to finance, offering business support services, creating a favourable environment to SME cross-border cooperation and promoting innovation.

Improving access to finance

The financial instruments available under the EIP were set up to create leverage and address major market gaps identified with regard to SMEs' access to loans and private equity.  By the third quarter of 2011, 155 350 SMEs had benefitted from these instruments, which facilitated their growth and increased business prospects. Debt financing of € 11.4 billion under guarantee schemes and investment volumes of up to € 2.2 billion under venture capital allowed creating or maintaining more than 186 000 jobs.

A practical example is offered by BioTech GmbH, a company providing mobility solutions for patients in Hungary: thanks to a loan obtained in the framework of CIP's financial instruments, Biotech was able to strengthen its production and research infrastructure, which eventually resulted in 28 additional employees hired in 2011.

Supporting business and entrepreneurship

The Enterprise Europe Network, a business support organisation present in 50 countries, is another initiative successfully launched by CIP. The Network helps SMEs find business and technological partners, make the most of the EU's single market and access EU funding.

About two million SMEs turn to the Network yearly. More than half of the SMEs which had used its services confirmed that they accessed new markets or developed new products.

The number of SME partnership agreements, combining business and technology partners, is growing steadily. Within the space of only three years, 4 300 cross-border cooperation agreements were concluded through the Network with a total impact on sales growth estimated at € 450 million. Participating firms created 2 400 new jobs.

One beneficiary of the Network's services is for example Multi Protect, an Estonian micro-company developing environmentally friendly fire-retardants, which is now represented abroad by a UK company. Another beneficiary is Treemetrics, a firm launched by two former foresters who had pioneered a way to estimate the timber production capacity of trees before they are chopped down. Through the Network, the duo gained dozens of new clients worldwide.

Promoting innovation

CIP has supported 134 eco-innovation projects, submitted largely by SMEs, in recycling, construction, green business and the food and beverages sector.

Projects like Greenbottle, LeakCure and TiLeather demonstrate how SMEs benefiting from CIP funding then bring their innovative solutions directly to the market. Greenbottle is the eco-friendly papier-mâché milk bottle, which reduces the plastic used by 25 % and generates 50 % less carbon. It is now available to consumers in the United Kingdom. LeakCure developed a technology, which self-penetrates the leakage, sealing and permanently repairing it; the first target end-user is Thames Water, a major water company in the United Kingdom. Another company, TiLeather, might have changed the way leather is tanned, replacing the outdated chrome tanning with a more eco-friendly ‘chromium-free’ process. Shoes made using this technology will be in shop windows in France and Spain already this summer.

Information and Communication Technology (ICT) and energy efficiency are other fields in which CIP promoted the development of promising projects.

In a nutshell

The performance report concludes that several CIP's growth enhancing measures contributed to supporting competitiveness and encouraging sustainable innovation in the European economy.

Building on these results, the European Commission has put forward proposals for a new generation of programmes underpinning the EU's objectives in the areas of competitiveness, SMEs and innovation (see box).

On the way to COSME

The Commission's proposals for the next Multiannual Financial Framework (2014-2020) include a programme for the Competitiveness of Enterprises and SMEs (COSME), which should continue on the path set out by CIP. The new programme will ensure continuity of the many successful features of the EIP, whilst simplifying their management so as to make it easier for small businesses to benefit.

With a proposed budget of € 2.5 billion, it is estimated that COSME will contribute to an annual increase of € 1.1 billion for the EU’s Gross Domestic Product (GDP) through a leverage effect.

The main beneficiaries of COSME will be existing and future entrepreneurs. The programme aims at facilitating access to finance for SMEs, promoting an environment favourable to business creation and growth, encouraging an entrepreneurial culture in Europe, increasing the sustainability and competitiveness of EU companies and helping small businesses access new markets.

Contact

'General Coordination' Unit,
Directorate-General for Enterprise and Industry

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