libros
revistas
otras publicaciones
videos
oficioyarte
documentacion - otras publicaciones

LFOLLOW-UP OF THE 3 RD EUROPEAN CONFERENCE
OF CRAFTS AND SMALL BUSINESSES
August 1999

The participants at the Milan Conference called for an environment to be created which:

  • is conducive to the creation of businesses, particularly by young people and women, for whom access to self-employment represents one of the best chances of obtaining a foothold in the employment market;
  • enables existing businesses to improve their competitiveness, to gain access to new markets and/or to develop new products/services, thereby generating growth and employment.

The participants suggested, in particular, that support for small and craft businesses be geared to the following:

  • the sector of activity concerned (labour-intensive or capital-intensive/traditional or innovating);
  • the life cycle of the business: set-up, expansion, transfer;
  • certain target groups (e.g. young entrepreneurs, women entrepreneurs and assisting spouses) which represent untapped job-creating potential.

It was agreed that the priorities of the Conference should be put into practice according to the following principles:

  • coordinating resources at all levels (a Commissioners’ Group on SMEs has been established, chaired by Mr Papoutsis, to ensure co-ordination of all policy areas which impact upon SMEs and entrepreneurship, and which have consequences for competitiveness and employment);
  • publicising the measures and/or actions carried out and giving them a high profile (in order to achieve the necessary transparency and to enable exchanges of best practices);
  • monitoring and assessing the results of these measures and/or actions, particularly their impact on employment.

The Conference further suggested that a group be set up to monitor progress with the priorities which were identified in Milan (the Milan Follow-up Group was established shortly after the Conference and meets on a regular basis).

PRIORITIES

I. To encourage the economic success of small and craft businesses by creating an environment conducive to their development.
A. Fiscal environment
1. the involvement of craft and small business sector representatives in following up ideas on how fiscal policy can be used as an instrument for job creation High taxes and social contributions hit SMEs particularly hard, and are a financial disincentive to take on new employees. SMEs are more labour-intensive than large enterprises, and play an important role in the creation of new jobs. Under the entrepreneurship pillar of the Luxembourg employment guidelines, Member States are asked to reform their tax systems to cut labour costs, which benefits particularly small, labour-intensive businesses.

In December 1997, a seminar was held in Brussels, organised by CNA with the Commission’s support, on “Creating a fiscal context for the growth of SMEs and craft firms”. The results of the seminar, illustrating best practice, have now been published.
2. targeted reduction of VAT rates on labour-intensive services, on certain environmental services and tourism, sectors where such a reduction is likely to encourage demand and reduce moonlighting In November 1997, the Commission put forward a Communication on the possibility of applying, on an experimental basis, a reduced VAT rate on labour-intensive services. On 17 February 1999, the Commission adopted a proposal for modification of the 6th VAT Directive to allow Member States wishing to do so to experiment with the operation and impact of a reduction in the VAT rate on labour-intensive services which are not exposed to cross-border competition. In view of this measure’s experimental nature, it is restricted for Member States to a fixed three year period.
B. Administrative & regulatory environment
1. Implementing the BEST Task Force’s recommendations concerning simplification of the administrative environment of SMEs, by adapting them, where necessary, to the special nature of craft and small businesses i) The Commission’s response to the BEST Report and recommendations, together with an Action Plan for the appropriate authorities to implement the measures, was adopted by the Commission on 30 September 1998. The Commission agrees with BEST’s view that simplification and regulatory reform as well as a change in administrative procedures should be made central to public policy at all levels in the EU. It remains committed to simplifying the regulatory environment, as set out in the Communication “Legislate Less to Act Better” of 27 May 1998, and will improve its business impact analysis system. This will include consultation with craft and small businesses (the “Think Small First” concept) when drafting regulations. The Commission is also examining its administrative procedures, including its guidance for officials (a new version is currently under preparation).

ii) After the SLIM exercise in 1997 the Commission as well as Member States were asked to cut down the formalities imposed on business for VAT collection purposes. As a follow-up, the Commission undertook different initiatives, including legislative proposals, studies and discussions in working groups.
2. improving the access of such businesses to markets for goods and services, particularly public procurement contracts and markets which have been or will be liberalised The Commission published a Communication on “Public Procurement in the European Union” on 11 March 1998. Through a series of measures aimed at improving the existing EU public procurement regime, the Commission intends to take action to adapt the regulatory framework to changes in the market, to develop a favourable environment for business, particularly SMEs, and to complement and achieve synergy with other Community policies. A future Communication specifically concerning SMEs and public procurement is envisaged.
3. taking such measures as may be necessary to reduce payment periods The Commission has adopted the Late Payment Directive and will pursue its adoption by the Parliament and Council as soon as possible. In addition, a call for proposals was published on 20 August 1998 which included an action to raise awareness and offer training on the most suitable payment rules and practices for SMEs, including debt management and debt recovery procedures.
C. Financial environment
1. improving business start-ups and the access of small and craft businesses to credit: i) The BEST Report emphasises the need to take account of the differing needs of SMEs of different sizes, including crafts and small businesses, in improving access to finance.

ii) The Amsterdam European Council of 16-17 June 1997 invited the European Investment Bank (EIB) and the European Investment Fund (EIF) to develop a facility to provide venture capital for high technology projects by SMEs. Further to this, and as part of its response to the European Parliament’s Growth and Employment Initiative, the Luxembourg Special European Council on Employment on 20-21 November 1997 earmarked ECU 450 million over 3 years (1998-2000) for the financing of SMEs and innovative actions and projects in the labour market. The EIB also grants global loans to intermediary institutions giving credit to SMEs.

iii) The Commission has already carried out, under the European Innovation Monitoring System (EIMS), a study on the opportunities for securitisation of guaranteed SME loans in Europe.

iv) At the initiative of the European Parliament, the Commission and the EIF have set up a facility to ease the access of SMEs to credit for new investments in the environmental area. This Growth and Environment Fund guarantees investments issued by its intermediary banks in the Member States.
a) by developing loan guarantee systems geared to the specific needs of the craft and small business sector (bringing in the EIF). The creation of national mutual guarantee networks would make it possible to set up appropriate relays conducive to the development of the EIF. i) The SME loan guarantee facility under the Growth and Employment Initiative, to be managed by the EIF, aims to promote an increase in the number of loans to small or newly-established businesses by facilitating an expansion of the activities of guarantee schemes and mutual guarantee banks. The Commission will sign a co-operation agreement with the EIF to make this programme operational.

ii) The Commission also supports a limited number of projects selected via calls for proposals with a view to enabling banks and mutual guarantee societies to launch new activities in countries where mutual guarantee instruments are currently under-developed.
b) by setting up venture capital funds i) The Commission has launched the I-TEC pilot project (Innovation and Technology Equity Capital) in co-operation with the EIF in order to encourage private investment in early stage, technologically innovative SMEs of less than 3 years old, and to help build within venture capital operators a lasting capability to appraise and manage such investments. In July 1998, the Commission extended the I-TEC pilot project in order to be able to support smaller, regionally-based venture capital funds as well as funds that concentrate on a particular technology or that are closely linked to a particular research centre. To date, 16 funds have been selected with a total investment capacity of 750 MECU, 250 MECU of which will be exclusively devoted to seed investments in companies less than 3 years old.

ii) In its recent Action Plan to Promote Risk Capital, the Commission outlined a number of actions to promote risk capital in the EU which address institutional and regulatory barriers, taxation, paucity of high-tech SMEs and human resources issues. It is currently working on its implementation with the Member States.

iii) The Commission has launched a 2nd pilot action on Seed Capital (CREA), which aims to stimulate the supply of equity finance for the creation and transfer of new, innovative smaller businesses with the potential for growth and job creation through support for seed capital funds or similar organisations. It will also create a Community-wide network for seed capital funds and their managers. In November 1998, the Commission published a call for proposals with deadlines for 15 January 1999 and 15 June 1999 aiming to select 20-30 seed capital funds from the EEA countries.

iv) After a feasibility study on a European Business Angels Network and a European Business Network Conference in Torquay in February 1998, organised by EURADA with the support of the Commission, the Commission launched a call for proposals in order to disseminate the concept of Business Angels networks, study the feasibility of the establishment of Business Angels networks and co-finance pilot actions. The European Association of Development Agencies (EURADA) was selected for the European-wide dissemination of the concept.
c) by encouraging joint actions and joint ventures (JEV Programme) The Joint European Venture (JEV) II programme provides financial contributions of up to ECU 100,000 to support the establishment of transnational joint ventures between SMEs in the EU. The scheme is managed by the Commission and operates via a network of financial institutions in the Member States.
2. Increasing financial institutions’ knowledge of the craft and small business sector through initial and continuing training of the staff of these institutions i) Under its INNOVATION programme, the Commission is conducting a number of pilot projects through which commercial banks learn to understand the needs of innovative SMEs and experiment with new approaches to technology rating.

ii) The 3 rd Round Table of Bankers and SMEs has begun its work, bringing together SME representatives, entrepreneurs and bankers, and will examine how to improve
financing for start-ups and early stage finance. The need to improve account management of SMEs by staff in financial institutions was discussed at its meeting on 11-12 February 1999.
3. broadening entrepreneurs’ awareness of the financing instruments available, including alternative forms of financing, such as mutual guarantee schemes i) Within the framework of concerted actions that are based on the exchange, identification and dissemination of best practice between Member States, the Commission has carried out seminars on finance for start-ups and SMEs.

ii) Under its INNOVATION programme, the Commission is establishing a help desk on financing innovation (the LIFT pilot project), which aims to increase the awareness of SMEs participating in Community-funded RTD programmes of the financing instruments that are available and to guide them to appropriate sources of finance. As part of the LIFT pilot project, a dedicated website has been created within the CORDIS server, which provides guidance on the different financing instruments.
D. Technical environment
1. promoting lifelong assistance of small and craft businesses by setting up and/or improving business services and simplifying access to them (e.g. European Community Business and Innovation Centres (EC-BICs)) There is a need to analyse existing services of accompaniment for craft and small businesses and to diffuse best practices, as well as analysing new systems of co-operation between businesses. This could take the form of an action under the Commission’s work programme for 1999. In addition, the Commission will continue its efforts to improve access for craft and small businesses to its business services.
2. improving the quality of the services on offer to small and craft businesses The Commission is continuing its efforts to improve the services available to SMEs via its Euro Info Centre (EIC) network. In line with the recommendations of the BEST Report, the Commission will also build upon work already undertaken through concerted actions with the Member States and business organisations to monitor and disseminate information on best practice in the provision of support services.
3. strengthening instruments such as performance indicators
II. To promote the emergence and development of a European small-business culture.
A. by promoting the enterprise culture and spirit among young people and their parents in the media and in education and vocational training systems The call for proposals launched on 20 August 1998 included an action to promote the spirit of enterprise amongst young people by encouraging partnerships between education authorities in the Member States and the professional organisations representing the craft and small business sector. This action also included a prize for the Young European Entrepreneur of the Year.
B. by pursuing the initiatives launched under the European vocational training policy in order to increase the importance attached to apprenticeship and sandwich courses in the education and initial vocational training systems Apprenticeship is already recognised by the Commission as a successful form of training in the craft sector, and its important role in vocational training has been acknowledged in the LEONARDO, SOCRATES and YOUTH for Europe programmes. Representative organisations will be called upon to offer their services in the implementation of these programmes. The Commission is also preparing a Communication on Training for SMEs (“Learning for Growth”), which will emphasise the need to promote apprenticeship training.
C. by improving management training in order to encourage young people to set up their own businesses i) The call for proposals launched on 20 August 1998 included actions to promote: awareness, training and counselling for start-ups by young people; innovative management techniques and methods of work organisation in craft and very small businesses; and innovation management training and advice for small businesses.

ii) Under its INNOVATION programme, the Commission is conducting a series of actions to promote the use of innovation management techniques by SMEs.
D. by making the external partners of small businesses (banks, insurance companies, law firms, public authority staff, etc.) aware of the special nature of the sector through initial and continuing training
E. by facilitating the transfer of businesses from one generation to another, not only through transfer of the productive capital but also through the transfer of knowledge via training methods which bring together the future transferees and the entrepreneurs before the latter hand over the business About 30% of all European enterprises face a transfer in the near future, and some 30% of them are expected to disappear because of poor preparation of their transfer. The main problems preventing the successful transfer of businesses are psychological barriers and legal, tax and administrative obstacles resulting from national laws. These include problems in civil and company law, high tax burdens and cumbersome administrative formalities.

The call for proposals launched on 20 August 1998 included an action to raise awareness amongst entrepreneurs of the specific risks inherent in the transfer of businesses between one generation and the next and the need to prepare for this operation. The action also included the setting-up of cross-border networks linking inventories of potential buyers and sellers of businesses. In addition, the Commission adopted a Communication on 28 March 1998 on the transfer of small and medium-sized enterprises, in which it emphasised that it will be necessary to improve further the legal, financial and fiscal environment for transfers.
F. by disseminating the best management and organisation methods and by stimulating the capacity to innovate and keep abreast of new technologies i) The Commission has a strong interest in quality issues as these are of crucial importance to SMEs, and intends to take over the Quality Award for SMEs as of 1999. This will be one component in a broad quality policy specifically targeted at SMEs.

ii) Under its INNOVATION programme, the Commission is conducting a series of actions to promote the use of innovation management techniques by SMEs.
III. To ensure that the small and craft business sector is taken into account from the very outset in the planning of national and Community measures and/or policies in the economic and social field. Such account must be taken, in particular, in consultations and negotiations at all levels.
A. by ensuring that craft and small businesses are involved in social dialogue at all levels The Commission, in its recent Communication on Social Dialogue, stressed that a broad representation of interests at all levels of Social Dialogue was necessary to achieve the widest possible acceptance and recognised that the current situation gave cause for concern. In December 1998, UNICE and UEAPME concluded a co-operation agreement on all issues of social dialogue. Following this agreement, UEAPME will also be represented in negotiations of social agreements under the framework of the Social Protocol.
B. by conducting specific studies and creating statistical instruments at national and/or Community level to obtain a better picture of the sector i) The Commission already produces, in co-operation with Eurostat, the annual “Enterprises in Europe” report, which gives a demographic overview of enterprises according to the number of employees, country and sector. However, given the differences in national definitions of the craft sector, where these exist, there are no common statistics at a European level. The craft sector is also covered in the Reports of the European Observatory for SMEs.

ii) The Commission launched a call for tender on 18 July 1998 for studies on young entrepreneurs, women entrepreneurs, co-entrepreneurs and entrepreneurs from ethnic minorities. The purpose of these studies is to improve the data available about these groups and to seek ways of overcoming the obstacles with which they are faced. In the case of women entrepreneurs, these studies will enhance the work already undertaken by the European Observatory for SMEs in its 4 th Report.

iii) Under its INNOVATION programme, the Commission is regularly conducting the Community Innovation Survey, which provides statistical information on the innovation activities of European companies, including SMEs.
C. by continually gauging the impact of national and Community policies on this type of business The Commission will continue to improve its business impact assessment system, which is designed to ensure that the concerns of business are taken into account during the preparation of legislation by the Commission services and that legislative proposals do not add unnecessarily to the compliance costs and administrative burdens for business, particularly SMEs. This will include the first pilot projects for Business Test Panels in the Member States to determine compliance costs and administrative burdens placed on individual enterprises from legislative proposals.
IV. To encourage small and craft businesses and their representatives to become involved in the processes of exchange and cooperation, both intra-Community and with non-member countries.
A. by encouraging cooperation between businesses and the creation of university/business networks designed to promote technology transfer and training for small and craft businesses The Commission is actively promoting the development of technology-based clusters focusing on SMEs and has launched an initiative entitled “Clusters - Networking as a tool for SMEs to enhance their access to RTD”. This initiative aims to involve SMEs in RTD networks, giving them improved access to technologies, opportunities to exchange information, and support for business development and the creation of partnerships. The Commission will also promote networks involving SMEs and RTD centres to make the latter aware of the potential for collaboration with SMEs. Under the INNOVATION programme, the network of Innovation Relay Centres has provided important technology transfer services to SMEs.
B. by setting up at national and Community level a legal framework which facilitates cooperation between businesses, in particular innovative forms of business association The EEIG (European Economic Interest Grouping), with its simple and flexible structure, is particularly well-suited to the needs of SMEs for co-operation at international level. Since the application of the Regulation on the EEIG in 1989, more than 800 EEIGs, involving more than 3000 partners, have been incorporated in EEA countries. Among these, 68% are either exclusively or mainly composed of SMEs. The Commission will shortly publish a Handbook on EEIGs to provide information and examples of good practice as well as a model contract for setting up a EEIG.
C. by stepping up cooperation between the bodies responsible for small and craft businesses in the European Union and their opposite numbers in non-member countries i) The participation, since December 1998, of a number of candidate countries from Central and Eastern Europe in the Third Multiannual Programme is being reinforced by initiatives such as the Business Support Programme, for which calls for proposals will be published during 1999. The BSP aims to support partnerships and twinning operations between business support organisations in the candidate countries and the EU and to strengthen the capacity of business support organisations to help businesses in the candidate countries to adjust to the Community “acquis”.

ii) Co-operation between SMEs is also being facilitated via partnership initiatives such as Partenariat and INTERPRISE events in the Mediterranean, Asia, Latin America and elsewhere. The Commission will also continue to contribute to the development of the economic and financial dimension of the Euro-Mediterranean Partnership, which aims to achieve a Free Trade area by 2010. Particular emphasis is being put on the promotion of start-ups, the restructuring of existing businesses and the development and strengthening of information and communication networks to foster cooperation amongst businesses.

iii) The Commission also plans a continuous improvement of BC-NET and BRE to ensure that the networks are up to date and user-friendly. Opportunities for greater co-operation will be sought via the experience of programmes such as INTERPRISE and Europartenariat and these may eventually be made available to SMEs using the Internet. The international expansion of the network will continue in connection with existing Commission programmes such as Asia-Invest and Al-Invest and with the United States via TASBI (Trans-Atlantic Small Business Initiative).
D. by improving the synergy between the existing Community SME support networks (Euro Info Centres, BC-NET, BRE, Business Innovation Centres, CRAFT Focal Points, etc.) Ongoing.
V. To increase competitiveness and innovation in small and craft businesses.
A. by making small businesses aware of the
potential of technological development and electronic commerce
The Commission’s Electronic Commerce Task Force has discussed the need to improve access for SMEs to electronic commerce. One possibility would be to organise a workshop or conference on awareness structures in Europe, which would aim to bring together the existing decentralised structures to exchange best practices and explore the feasibility of a permanent structure or more frequent exchanges.
B. by encouraging exchanges of best practice i) The Commission launched a call for tender on 20 August 1998 on “Improving the access of SMEs of all sectors to electronic commerce”. This project will create a database (to be made available on the World Wide Web) with profiles of organisations and businesses dealing with awareness, dissemination of information, web marketing, sectoral studies, provision of business services related to electronic commerce and any other information that could help guide investment decisions by SMEs in this field. In addition, the project will identify successful craft and micro-business web sites and obtain information about success factors. The results will be available in June 1999 and will particularly target web support service providers to give them an idea of how to help crafts and small businesses.

ii) The Commission’s SCREEN (Small and Craft Enterprises Electronic Networking) initiative is designed to strengthen co-operation between development projects in the Information Society and SMEs. A limited call for proposals, aimed at Euro Info Centres, will be published in the first half of 1999.
C. by organising systems of flexible working
hours suited to the needs of small businesses
In its Communication “Modernising the organisation of work - A positive approach to change” (COM(99)592), the Commission has asked the social partners to consider taking a leading role in developing a new approach to work organisation. In this context, a positive approach to reconciling the needs of firms for flexibility and the needs of workers for security in change is essential.
D. by facilitating the access of small and craft businesses to new technologies, particularly to Community and national RTD programmes i) The Commission is preparing a Recommendation on improving participation by SMEs in Community programmes. The proposal for the 5 th Framework Programme, including the horizontal programme “Promotion of innovation and encouragement of participation by SMEs”, envisages the following measures: the rationalisation and co-ordination of RTD assistance networks by replacing them with a network of NCPs (National Contact Points); the introduction of a single entry point for SMEs; improved dissemination of information via CORDIS (Community Research and Development Information Service); simplification of application forms; quicker reaction to proposals; and special measures for SMEs such as exploratory awards.

ii) The Commission will set up an Innovation Financing Help-Desk (LIFT), which will assist participants in Community-funded RTD projects to establish contacts for access to finance and to exploit research results.
E. by developing a training culture geared to
small and craft businesses
i) The call for proposals published on 20 August 1998 included actions to: promote access to training for self-employed entrepreneurs; inform, train and advise young people on setting up businesses; promote recognised training courses for women and co- entrepreneurs; promote innovative management techniques and methods of work organisation in craft and micro- enterprises; and promote innovative management training and advice for small enterprises.

ii) The Commission’s Communication on “Fostering Entrepreneurship in Europe”, published on 7 April 1998, emphasised the need for training as an essential tool in the building of an enterprise culture. In addition, the Commission’s Communication on Training for SMEs, currently under preparation, will contain a strategy for future training actions in favour of SMEs and their employees, including the identification of best practice.

iii) Within the framework of the revision of the LEONARDO programme, the involvement of entrepreneurs in the programme will be strengthened, especially in respect of mobility and through the promotion of flexible forms of training.
F. by supporting the intermediate structures
capable of gearing the training they offer to the specific expectations of small and craft businesses
The Commission is launching a call for tender during 1999 to identify the experience of networks of learning organisations which specialise in the provision of training for SMEs and to test best practices at a European level. The final objective is to establish a Business Education Network of Europe (BENE).
G. by raising entrepreneurs’ awareness of the importance of continuing training for them and their employees, while taking care not to increase burdens on businesses The Commission’s Communication on Training for SMEs will address the question of how to raise entrepreneurs’ awareness of the need for continuing training.
H. by identifying best practice in the management of high-growth businesses The Report “Europe’s 500” explored the reasons behind the success of the fastest growing businesses in Europe and highlights areas such as management and training. Its results will be the subject of a conference in 1999.
I. By promoting the use of modern management techniques, particularly self-evaluation and benchmarking EUROCHAMBRES carried out a benchmarking project on quality management with the support of the Commission. A final report is available and a benchmarking brochure especially for SMEs is being finalised by EUROCHAMBRES.
J. by encouraging the participation of small and craft businesses, via the good offices of their umbrella organisations, in the European competitiveness benchmarking network EUROCHAMBRES as well as some national Chambers of Commerce are participating in the European benchmarking network.
K. by setting up environmental diagnostic, consultation and information systems suited to businesses’ individual needs The Commission’s Communication of November 1997 on Environment and Employment addressed the need for environmental consultation and information systems. Initiatives in this direction would not only benefit the environment, but could also help to improve economic performance and safeguard and/or create employment in SMEs. One possibility would be to organise a workshop with interested partners on the role and structure of such consultation and information systems, and, based on the results, to develop further policy actions.
L. by promoting administrative simplification at all levels, especially by the creation of one-stop information shops i) The BEST Report encouraged Member States to consider one-stop shops, the setting up of regular monitoring and evaluation systems to measure progress and to make greater use of information tools. In its Action Plan, the Commission asks Member States to implement the Recommendation on Business Start-ups, including, inter alia, the setting up of Single Registration Points.

ii) The Commission is updating a number of studies detailing the administrative and fiscal requirements for setting up new businesses in different Member States under its European Innovation Monitoring System.


Oficio y arte, OAE (Organización de los Artesanos de España)
Montes, 13 - entreplanta D local 3 · 15009 A CORUÑA - España
T +(34) 981 288 104 · F +(34) 981 282 796 ·
correo@oficioyarte.org