POLICY
Promoting the competitiveness of EU industry – in particular small and medium-sized enterprises (SMEs) – and helping the adjustment of production and services processes to a low carbon, climate resilient, resource-efficient economy are key goals of the Europe 2020 Strategy. The EU is working to improve the business environment and to support the development of a strong and diversified industrial base capable of competing on a global scale.
Particular effort is needed to promote the development of SMEs. SMEs are a major source of economic growth and job creation in the EU, accounting for more than 67 % of private sector jobs and providing more than 58 % of total turnover in the EU. Creating the conditions for SMEs to flourish is part of the EU’s growth and jobs strategy, as described in the Commission’s Europe 2020 Industrial Policy flagship communication. 6)
The EU has an important role to play in unlocking the growth potential of SMEs, including through the targeted use of the EU budget. Activities in this area focus on addressing the key market failures that limit SME growth – for example in relation to access to finance – and ensuring that SMEs are able to take full advantage of the enormous potential of the European single market.
The strategic and innovative use of the EU budget will contribute significantly to these efforts. The EU budget will be used to help provide much-needed equity and debt finance via the use of innovative financial instruments and to support a wide range of activities to promote the development of SMEs at European level. Together, these activities will provide a significant boost to SMEs.

INSTRUMENTS
The European strategy for industrial competitiveness and SMEs will focus on the promotion of SME-friendly activities across the full range of EU policies and spending programmes and on providing a dedicated support and services reflecting the particular needs of the SME community at European level.

>Promoting industrial competitiveness and SMEs
It is essential that the specific interests and circumstances of SMEs are taken into account in the design of all EU policies and funding programmes.
In particular, the future financial framework will be designed so as to facilitate the participation of small businesses in funding programmes, for example by simplifying rules, reducing the costs of participation, accelerating award procedures and providing a “one-stop shop” to make life easier for the beneficiaries of EU funding.

>A dedicated programme for industrial competitiveness and SMEs
In addition to the promotion of SME interests and the steps being taken to reinforce the coordination and simplification of funding programmes, the EU budget will also provide targeted financial support for SMEs. The Commission proposes to establish a dedicated “Competitiveness and SMEs Programme” as a successor to the non-innovation part of the current “Competitiveness and Innovation Framework Programme” (CIP). All research and innovation support to SMEs (including the innovation part of the CIP) will be included in the Common Strategic Framework for Research and Innovation. The “Competitiveness and SMEs Programme” will focus mainly on measures to promote more dynamic and internationally-competitive SMEs. These measures will include:

Access to finance: the financial instruments for growth
Financial instruments for growth will facilitate SME access to funding through the use of innovative financial instruments. These instruments will take full advantage of the new equity and debt platforms to provide both equity and loan guarantee facilities. Financial instruments, for start-up and growth investments, in particular venture capital, will also be provided in the Common Strategic Framework for Research and Innovation for innovative companies and SMEs. The instruments in the Competitiveness and SMEs programme will include:
(1)An equity facility for growth-phase investment, which will provide commercially-oriented reimbursable equity financing primarily in the form of venture capital (VC) through financial intermediaries to SMEs. Two measures are envisaged:
–Investments in VC funds which operate across borders within the EU and are focused on investing in growth-oriented enterprises, thereby supporting the development of an EU-wide VC market.
–A “fund-of-funds” (or “European fund”) investing across borders in VC funds which subsequently invest in enterprises, in particular in their international expansion phase.
(2) A loan facility, providing direct or other risk sharing arrangements with financial intermediaries to cover loans for SMEs. The facility would generate a high leverage effect and would provide the cross-border lending or multi-country lending that could not easily be achieved through facilities at national level.
In order to ensure complementarity, these activities will be closely coordinated with the types of action undertaken within cohesion policy under shared management.

Improving the competitiveness and sustainability of EU industry
This strand of the Competitiveness and SMEs programme will support actions including:
•Activities to improve European competitiveness: EU action in this area will focus on supporting coherence and consistency in implementation as well as informed policy making at European level. In particular, it will improve the economic and regulatory environment through benchmarking, the exchange of best practices and sectoral initiatives.
•Developing SME policy and promoting SME competitiveness in line with the goals of the Small Business Act (SBA). EU actions will include reinforcing the use of the ‘Think Small First’ principle in EU and Member State policy making, identifying and exchanging best practices in order to contribute to the implementation of the SBA, maintaining a single entry point to EU policies – the Small Business Portal and support to SMEs to exploit the potential of the single market.
•Tourism: EU tourism measures will focus, inter alia, on providing reliable information on trends in tourism demand at European level; developing competitiveness in the tourism industry and promoting ICT uptake by tourism enterprises; combating tourism seasonality; promoting sustainable tourism products and destinations; deploying a skills and competences framework for employees and employers in the sector; facilitating exchange of best practices and partnership creation. In line with the Lisbon Treaty provisions, EU tourism measures will encourage cooperation between the Member States by contributing to the diversification of the transnational tourism offer, coordinating national efforts towards enhancing Europe’s visibility in third markets and jointly promoting emerging, non-traditional European destinations.
•New business concepts for sustainable, user-driven design-based goods: This initiative will focus on the commercial use of relevant concepts and ideas in the textiles, footwear and sport and other consumer goods sectors.

Access to marketsThese activities will include:
•Provision of growth-oriented business support services via the Enterprise Europe Network: As a one-stop-shop for SMEs, the Enterprise Europe Network with 600 partners organisations in 49 countries will continue to provide comprehensive and integrated services to SMEs which include:
–information and advisory services on EU matters;
–facilitation of cross-border partnerships by managing a cooperation database with 13,000 active requests and offers for cooperation;
–internationalisation services within the EU leading to 2,500 business cooperation, technology and R&D partnership agreements every year;
–informing SMEs on EU legislation and promotion of EU funding programmes, including the Common Strategic Framework for Research and Innovation;
–provision of a two-way channel for communication between SMEs and the Commission where 10,000 SMEs have been involved;
–support for improving the financial knowledge of SMEs; and
–access to energy efficiency, climate and environmental expertise by SMEs.
•SME business support in markets outside the EU: To access third country markets successfully, SMEs must be equipped with appropriate skills and knowledge of the third country regulatory framework. The proposed activities in this area include comparing the demand for services with current service delivery, the creation of an online portal and, where appropriate, in selected cases the establishment of and/or continuation of support to EU SME Centres, in cooperation with local European and Member State business organisations. The EU SME Centres will provide comprehensive support services for SMEs operating in markets outside the EU.
•International industrial cooperation: Activities will aim at reducing differences in regulatory and business environments between the EU and its main trading partners and the countries in the “European Neighbourhood” by government-to-government regulatory dialogue, business-to-business dialogues and “direct actions” with third countries such as thematic workshops and conferences.

Promotion of Entrepreneurship
Activities in this area will encompass the simplification of administrative procedures and the development of entrepreneurial skills and attitudes, especially among new entrepreneurs, young people and women. All activities will have a strong European dimension.
The Erasmus for Entrepreneurs exchange programme offers new or prospective entrepreneurs the possibility to work for up to six months with an experienced entrepreneur in another EU country. This European mobility scheme aims to promote entrepreneurship and to support the internationalisation and competitiveness of micro and small enterprises in the EU.

IMPLEMENTATION
The management of the new Competitiveness and SMEs Programme will be largely outsourced to external bodies, in particular the EIB Group for the “Financial Instruments for Growth” and the (successor of the) Executive Agency for Competitiveness and Innovation (EACI) for other activities related to SMEs.

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Competitiveness and SMEs Programme €2.4 bn

6) COM(2010) 614.