On Tuesday, the European Commission launched its SME strategy. In short, the Commission focuses on three points:
- Help SMEs digitalize and make the investments to become carbon neutral in the medium-term
- Reduce regulatory burden for SMEs and make sure rules and regulations are being aligned in the different member states
- Improve the access to financing for SMEs and start-ups
Here is what I think of the Commission’s ideas:
- It is good that the European Commission acknowledges the tough decisions SMEs are facing today to be competitive in the digital age and to transition to green and sustainable business models.
- Small businesses need to be able acquire the necessary know-how and finance the necessary investments. That’s why we like the Commission’s suggestions to support them through EU funds, but also through a Europe-wide network of 260 spaces, where businesses can train their staff in the use digital technology, where they will get legal and administrative advice and where they can collaborate and exchange ideas (these are called Digital Innovation Hubs)
- We appreciate the Commission’s effort to complete the European single market, by trying to make sure that the same things are regulated the same way in different countries, so that small companies don’t need to hire huge legal teams to expand to another European country.
- Finally, we really like that the Commission puts an emphasis on supporting female entrepreneurs and wants to make sure that more women also become financiers for start-ups.
- What we don’t like so much is that the Commission seems to be willing to weaken the rules of competition law in Europe. This goes in the wrong direction. If anything those rules need to be strengthened. Instead of creating artificial “European Champions”, EU and national authorities need to protect SMEs from unfair market practices that can result from the abuse of dominant market positions of large suppliers and customers.
- We also don’t think that the Commission is doing enough to make sure that SMEs have a fair change in the huge public procurement market (when governments buy things): Complex application procedures, risk-averse decision making and effective lobbying efforts too often favour large established companies.
- All of this is fair and well but nothing the commission does will have any big impact if national finance ministers do not agree on sufficient money for these important programs. In the EU long-term budget (MFF) negotiations, things went completely in the wrong direction. This needs to change, and soon!
- We should not forget that SMEs are among the hardest hit from the interruption to normal life from the Corona virus. Many small companies are struggling to pay their wages & bills, and will be fighting with survival. There is only so much the EU can do to help SMEs recover. Most of these policies are tasks of the EU member states. But for many SMEs, all across Europe, coordinated help, speeding up approval processes and waiving administrative hurdles will make a real difference.