Supporting the creation and growth of businesses, in particular small and medium sized enterprises (SMEs), are key ways by which cohesion policy helps to boost regional economies.
Supporting entrepreneurs, attracting investors and enhancing the productive capacity of regions is vital to improving their economic performances and helping those that are lagging behind to catch up. Around 1.2 million enterprises are created in the EU every year – some 10% of the total number of businesses. Yet only half of them survive the first five years. And there are big differences across the EU – for example, in Italy, Spain and the United Kingdom, new enterprises are created twice as often compared to the EU average.
SMEs are the real giants of the European economy, accounting for 99% of businesses and up to two-thirds of all private sector jobs in the European Union. However, SMEs often have difficulty in accessing capital and knowledge, coping with structural changes in markets and frequently lack experience. EU cohesion policy is aimed at tackling these difficulties through a combination of ‘hard’ measures, such as direct support to investment, and ‘soft’ ones, notably the provision of business support services, training, an innovative environment, financial engineering and technology transfer, as well as the support of networks and clusters.
Between 2007 and 2013, cohesion policy programmes will support:
- The creation and growth of SMEs, in particular linked to entrepreneurship, access to finance, research and innovation, technology transfer, access to information and communication technologies or environmentally friendly production. About €27 billion (7.9% of the total allocation) are allocated to such support dedicated specifically to SMEs.
- Other investment support to both large and small businesses, including productive investment and the provision of business support services in the abovementioned areas, are planned to receive another €28 billion (8.1% of the total allocation). A large share of these funds will directly or indirectly benefit SMEs.
- Support to business and employees aimed at anticipating and managing economic and structural changes with the aim of anticipating "corporate restructuring", designing more productive ways of organising work or implementing life-long learning strategies. The objective being to allow for fluid and smooth change that supports jobs and to create a more adaptable workforce. These priorities are supported by the European Social Fund.