Further Information : Small and Medium-sized Enterprises
Micro, small and medium-sized enterprises (SME) play a central role in the European economy
They are a major source of entrepreneurial skills, innovation and employment. In the enlarged European Union of 25 countries, some 23 million SMEs provide around 75 million jobs and represent 99% of all enterprises.
However, they are often confronted with market imperfections. SMEs frequently have difficulties in obtaining capital or credit, particularly in the early start-up phase. Their restricted resources may also reduce access to new technologies or innovation.
Therefore, support for SMEs in one of the European Commission's priorities for economic growth, job creation and economic and social cohesion.
EU Support for SMEs
SMEs have taken on ever greater
prominence in EU policy-making in recent years. Under the ‘think small
first' principle, both direct and indirect impacts on SMEs need to be
considered in drawing up and implementing policy across all fields of
the Commission's activity. That means that there are many activities
which affect SMEs.
The European Commission has set up a web portal to provide a single entry point for information on all EU policies, programmes, projects, tools and services aimed at SMEs. Users can identify immediately the languages in which each site is available, making it easier to find the information of most use to them.
This on-line tool also provides a simple means for SMEs to identify the European Commission funding instruments which could help their business. It explains the different programmes, their aims and the types of activity each supports. It also gives links to detailed information and contacts for further information and assistance in each EU Member State.
For more information on the Small Business Act go to the European Commission's SME Web Portal
Small Business Act for Europe
August 2008 saw the launch of the Small Business Act for Europe. This Act is the European Commission's ambitious plan to address the needs of Europe's small and medium-sized businesses. It is a major step to make Europe more entrepreneurial and help its businesses thrive as it improves framework conditions for SMEs while taking full account of their diversity. It comprises a set of common principles to guide SME policy as well as a number of proposed actions to translate the principles into practice.
More information on the Small Business Act for Europe can be found on the European Commission website.
Importance of a European SME definition
In a single market with no internal frontiers, it is essential that measures in favour of SMEs are based on a common definition to improve their consitentcy and effectiveness, and to limit distortions of competition. This is all the more necessary given the extensive interaction between national and EU measures to help SMEs in areas such as regional development and research funding.
The current definition entered into force on 1 January 2005 and applies to all policies, programmes and measures that the Commission operates for SMEs. Since the average European enterprise employs no more than six people, most can be considered as SMEs. However, the definition takes into account possible relationships with other enterprises. In certain cases, those relationships, particularly if they create significant financial links with other enterprises, may imply that an enterprise is not an SME.
The European Commission guide The new SME definition: user guide and model declaration is primarily designed for two audiences: the first are entrepreneurs running enterprises who are interested in applying for grants or loans; the second are European, national, regional and local officials who draw up and run various business support schemes.
