European Commission - Growth

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A European partnership to seize global opportunities Arna fhoilsiú an : 10/06/2011, Nuashonrú is déanaí: 29/09/2015

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Europe’s small and medium-sized enterprises (SMEs) need access to the global economy if they are to flourish. Partnerships involving SMEs, governments and support agencies could help increase the effectiveness of public support in this domain. With this in mind, the European Commission is consulting stakeholders to get feedback on concrete ideas for a comprehensive approach to support measures for internationalisation.

The European Union has a strong track record in supporting small business. Growing recognition has been given to the importance of providing support also overseas, where EU SMEs have the opportunity to benefit from new export markets, foreign partnerships and cross-border clustering.

Various valuable initiatives, such as EU Business Support Centres (see boxes), the EU Gateway Programme for Japan and Korea and the Pro-invest Programme, which aims to encourage cooperation and technology transfers with African, Caribbean and Pacific countries, have been launched taking this into account. The EU and the US also recently joined forces to create the TransAtlantic IPR Portal (page 8), which offers guidance on intellectual property rights to both European and American enterprises that wish to do business in other countries.

Small business, big world

The broad rationale for this internationalisation support is well-founded. On the one hand, SMEs generally need some form of assistance when making their first steps on foreign markets, as they are often less well-equipped than large enterprises to deal with different legal environments, standards and risks. On the other hand, the required support cannot be fully provided by the private sector alone.

However, a stronger coordination could further improve the effectiveness of the tools currently available and help design new ones. Moreover, the European Commission also feels that a user-friendly one-stop shop for SMEs wanting to do business abroad is still lacking. This is a problem, especially for SMEs from Member States whose governments or chambers of commerce are not present in certain markets. Also, SMEs as a whole are often unaware of business support services available, partly as a result of the complex and sometimes uncoordinated approach within the EU. Furthermore, the EU can add value to these services with its expertise on regulatory issues, standardisation and customs procedures.

Have your say!

An online consultation, which runs until 12 July, was recently launched by the European Commission specifically to address this situation. The objective of the consultation is to receive feedback on Commission proposals to establish a more coherent SME support system. The aim is to establish new partnerships and new ways of working between SMEs, governments and support agencies.

This feedback will go towards the formulation of a Communication, to be adopted later this year. In general, the consultation is a means to sound out the expectations of stakeholders – such as chambers of commerce and trade promotion agencies – and the general public regarding the role the EU should have in the area of support for internationalisation.

Blueprint for the future

The European Commission believes that the first step towards establishing a more effective framework is to carry out a detailed mapping of existing support services in all priority markets. This would then allow for the implementation of an online international business portal, which would make relevant information accessible and available via one dedicated source. The portal would be designed with SMEs in mind, but would also be useful for all intermediaries working on SME support, such as chambers of commerce.

The third step would involve designing EU activities accordingly. Existing structures should be built upon, and new structures should be created as required. EU business centres for SMEs, for example, are useful in some regions of the world, but need not be established as a general rule. According to the proposal, the focus should be on integration and stronger synergies rather than the creation of further individual support activities. This approach, in effect, could give the existing SME support system a firm European dimension, and provide European businesses with easier access to the information and advice they need to flourish.

Going international

These efforts fit with the objectives of the Small Business Act (SBA) and its Review (page 3), which aim to ensure that European SMEs have access to finance and markets and can thrive in a regulatory environment conducive to growth. One of the SBA principles is to encourage and support SMEs to benefit from the growth of markets; in other words, to help them take full advantage of the global economy.

A major reason for doing so is that businesses that ‘internationalise’ through exports, foreign partnerships, investments and cross-border clustering are proven to be more likely to enjoy long-term sustainability. A 2009 study (page 18), for example, found that internationally active SMEs reported employment growth of 7%, while SMEs without any international activities experienced only 1%.

Centres of support

Innovative EU business support centres to help SMEs in foreign markets have already been established in key regions such as India, China and Thailand. The European Business and Technology Centre in New Delhi, with antennae in Mumbai, Kolkata and Bangalore, for example, aims to foster links between EU and Indian business as well as between science and technology experts. The centre, which began in 2008, has a strong emphasis on technology, with a focus on environment, transport, biotech and energy.

The EU Centre for Support to European SMEs in Beijing, China similarly aims to assist EU business, in particular SMEs, in doing business in China, including fostering their cooperation with Chinese business, while the European ASEAN Business Centre (EABC) in Bangkok, Thailand aims to assist EU business in doing business in Thailand and ASEAN countries. Launched in 2010, the Centre is made up of a consortium of nine European-Thai chambers of commerce as well as Eurochambres and is being led by the German-Thai Chamber of Commerce.

Far East cooperation

The EU-Japan Centre for Industrial Cooperation, headquartered in Tokyo, with a branch office in Brussels, was established by the European Commission and the Japanese Government to focus on individual business skills through various programmes it runs. These include managerial training programmes on how to succeed in Japan, internships in Japan for European students in the fields of engineering, science and architecture and training programmes in world-class manufacturing for European executives.

The centre also performs a think tank role on industrial policy issues, such as the common challenges faced by the EU and Japan (for example, global warming and environmental issues, energy concerns, competition from emerging countries and foreign direct investment).