Making the internal market a “late payment free zone”, creating a ‘Europe Inc.’, reviewing the definition of SMEs, creating an initiative to launch a European ‘New Space’, creating an alliance of SMEs in artificial intelligence, reviewing the directive on late payments, giving more space to SMEs in the ‘European Semester’: these are some of the initiatives that the European Commission intends to present in its strategy for SMEs, which is due to be presented on 10 March next, according to a provisional version obtained by EUROPE.
Unsurprisingly, the Commission is structuring its action in line with the challenges of the digital and ecological transformation and wants to tackle the two main problems that prevent SMEs and start-ups from fully exploiting the potential of the internal market: red tape and obstacles in the internal market.
Thus, the Commission wants, as a first step, to strengthen and interconnect local and regional entrepreneurial ecosystems to accompany the green transition of SMEs, i.e., by supporting local and regional ‘Green Deals’. The institution also wants to create simplified European support mechanisms for SMEs through the local European Environmental Network (EEN) and the European Digital Innovation Poles, as well as to improve SMEs’ access to skills through the strengthening of the industry-led, European Skills4SMEs partnership.
European ‘New Space’
In the long term, the institution wants to develop “large-scale” SME alliances in the field of artificial intelligence, particularly in “strategic value chains”. The Commission will ensure that at least 70% of the funding for the European Innovation Council, to be launched in 2021, goes to SMEs.
In addition, the Commission wants to create a European ‘New Space’ (inspired by what is being done on the other side of the Atlantic) and, in this context, plans to launch the ‘Space Entrepreneurship’ initiative. It proposes launching a public procurement initiative for innovation brokers, particularly in the space and defence sectors. In addition, the Commission plans to present a “new skills pact”.
Europe Inc.
The Commission is working on many improvements to make the Internal Market work better for SMEs, such as strengthening SME testing under new legislative proposals, deploying the Erasmus for Young Entrepreneurs (EYE) programme.
It proposes creating a pilot project, a bottom-up regulatory “sandpit” for SMEs, in cross-border regions and sectors to implement new initiatives, or to improve the business registers interconnection system (BRIS), linking the business registers of the Member States and ensuring EU-wide access for everyone to the information and documents stored in these business registers via the European e-justice portal.
Interestingly, the institution intends to propose the creation of a ‘Europe Inc.’ scheme, based on the Societas Europaea concept, to facilitate the expansion of start-ups across borders within the single market.
Access to finance
The Commission is also addressing the issue of access to finance for SMEs. In particular, it plans to review the Late Payments Directive and in the meantime intends to use the principle of “zero tolerance” for incorrect implementation of the Late Payments Directive in its current version. The institution wants to launch the ESCALAR initiative, which basically consists of increasing private investment to support business development through venture capital.
Change the definition of SMEs
The Commission also wants to improve governance and the way it operates to take better account of SMEs, again according to the ‘Think Small First’ principle. The institution thus wants to strengthen the network of SME representatives (SME envoy) and create a “group of ambassadors” dedicated to “strategic entrepreneurship”, which would be an advisory group of cross-sectoral experts. It also suggests a task force on SMEs with the support of specialised SME teams in all the Directorates-General concerned.
In addition, the Commission wants to put more emphasis on SMEs in the context of the ‘European Semester’ budget process. Finally, it wants to modernise the definition of SMEs in order to clarify which companies can be considered as SMEs and thus determine which will be able to benefit from European policies in favour of SMEs. (Original version in French by Pascal Hansens)