Main problems that European SMEs are facing

One of the driving objectives of the newly established Enterprise Europe Network is to help small and medium-sized enterperises (SMEs) to grow.

At the Enterprise Europe Network for the North East of England we help SMEs to source suppliers, find the finance they need, track public tenders and shape R&D projects for their new product development. We also encourage SMEs to feedback to the European Commission by participating in open consultations and joining special panel groups.

The European Commission have just completed a consultation with SMEs asking business leaders the main problems they face preventing their businesses from growing. Over 500 SMEs contributed in the open consultation ran by the Commission. The outcome identified some clear areas that concern SMEs.

The administrative burden, overregulation and bureaucracy are by far the main general concerns, followed by access to finance, taxation, lack of skills, access to public procurement, unfair competition and labour law. Excessive payment delays are also described by many respondents as an important problem for SMEs. Some interesting findings:

• The majority of respondents (around 60%) think that EU legislation creates
  an unnecessary burden on SMEs

  A large majority of respondents (84%) think that the education system, and
  in particular the school curricula does not focus enough on entrepreneurship.
  They therefore consider it important to intervene in the education system with
  more systematic measures

  Around 60% of replies indicated that there is still a need to reduce the
  time and costs to set-up a business. Some respondents pointed out that
  significant differences exist within Member States in this regard. The lack of
  information and the lack of appropriate support for newly created enterprises
  are identified as additional problems

  With regards to skills, there is in particular a lack of ICT skills which
  are considered essential to better exploit the opportunities offered by new
  technologies and also for training itself, considering that small entrepreneurs
  often cannot follow traditional courses

  More than 70% of the companies and of all the responding stakeholders in
  general see a need to improve SMEs’ access to public procurement and consider it very useful to increase transparency in EU procurement procedures

  Regarding finance, respondents agreed on the necessity of improving current
  policies and instruments

  The main problems identified regarding SMEs’ access to EU programmes were the lack of awareness of these programmes, the difficulty created by the need to have a consortium and, finally, the administrative burden together with the long timescale associated with any application, in particular in the context of the 7th Framework Programme for R&D and the JEREMIE initiative

  Concerning access to markets outside the EU, the identified areas for action
  range from the provision of information and practical support (including the
  exchange of good practices), to linguistic and technical training better
  tailored to SMEs

  More than half of the respondents are favourable to establishing EU centres
  in the fast-growing countries. The places mentioned most frequently for these
  centres are by far: China and India, and in general the Asian countries followed
  by South America (Brazil) and Russia

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Shak Gohir

EEN Practice Director