Starting a business is faster, cheaper, but challenges remain

The European Union adopted the Small Business Act in 2008, with the intention of making it easier to start and run a business. Two years on, the EurActiv network takes a look at the achievements and challenges ahead. Starting her own online art gallery in London this year took Gina Cross about a week and cost £70 (€82), about the average for entrepreneurs in the United Kingdom. Likewise, in Bulgaria, France and Ireland, registering a new business costs less than €100 and takes less than a week.

"It’s quite easy," said Cross, founder of A Little Bit of Art, a small company which sells printed artworks. But in Poland and Spain, entrepreneurs still wait about a month for their initial paperwork to be approved. In Italy, Luxembourg, Greece and the Netherlands, the process is faster but expensive – more than €1,000. That discrepancy highlights the challenges facing efforts in the European Union to jumpstart the economy. When it comes to economic initiatives the EU has no powers to enact rules with teeth. They host meetings, promote programmes and share best practices, but at the end of the day their recommendations are only as strong as the political will to enact changes at the national and regional level.

"Certain member states moved on certain elements, but not all […] There’s definitely space to push further. We’re very much aware of that," said Marko Curavić, head of unit for entrepreneurship in the European Commission. Four years ago, leaders from all 27 member states set a 2007 deadline for their own countries to create one-stop-shops for setting up a company quickly – ideally within a week. Start up fees, the European Council concluded, should be as low as possible, and hiring the first employee shouldn’t involve more than one public administration point. Clearly many countries are years behind schedule.

Small and medium-size businesses create 80% of new jobs in Europe. That means entrepreneurs and small and medium businesses will play a critical role as Europe recovers from the economic and financial crisis. So anything that hinders new businesses hinders growth. This is especially important now because while the unemployment rate in the EU averages around 10%, and it’s double that for job seekers under the age of 25, according to research published last week by the Organisation for Economic Coordination and Development. The highest youth unemployment rate was in Spain, followed by Ireland, Slovakia and Greece. Only Germany posted a slight decrease.

News source: EurActiv link: article

The Small Business Act two years on: businesses call for improved delivery

Two years after the Small Business Act entered into force and shortly before the European Commission review, the European Economic and Social Committee's Employers Group, BUSINESSEUROPE, EUROCHAMBRES and the European Association of Craft, Small and Medium-sized Enterprises held a second yearly event to discuss the implementation of the Act and the way forward. The conference, bringing together EU decision-makers and businesses, identified a number of concrete measures to be taken rapidly by the EU and national policy makers in order to strengthen their efforts to deliver the Small Business Act for Europe (SBA).

European entrepreneurs and business representatives made it clear that current measures have not yet removed the obstacles to SMEs growth, job creation and innovation in Europe. In their conclusions (see appendix), business representatives outlined ten recommendations in the three priority areas identified by the Council in its December 2008 Small Business Act Action Plan: access to markets, better regulation and access to finance. Conference participants underscored the need to create a more SME-friendly regulatory environment by carefully assessing the impact of any new regulatory or legislative measures on SMEs. They also stressed that SMEs needed better access to markets, which is still hindered by excessive red tape and the lack of harmonisation in the EU internal market. They also called for initiatives to open up public procurement to SMEs. Despite recent initiatives taken by the EU, in particular through the European Investment Bank and EU Research Framework Programmes, access to finance remains tricky. The new EU regulatory measures for banks should be defined in a balanced way, so that they do not hinder SMEs access to capital. The potentially significant cumulative effect of the wide range of measures on the table should also be taken into account, said participants in the event.

Participants also called for successful completion of Council negotiations on the European Private Company Statute (SPE), the only legislative proposal from the SBA still pending. The absence of an SPE restricts smaller companies' ability to grow and trade across Europe.

Henri Malosse, President of the EESC Employers' Group, concluded "It is high time that the European Commission replaced its strategies, acts and plans by concrete actions. The 23 million European SMEs would very much welcome a single positive action, like those on public procurement, vocational training, entrepreneurship, taxation and finance".

Supporting SMEs and business in Europe will be one of the key solutions not only to the financial crisis but also in addressing global social and environmental issues: SMEs are crucial to innovation and creativity. They deserve to be supported. While the economic outlook may look more encouraging in large areas of the EU, smaller businesses still encounter many of the bottle-necks and obstacles that the SBA was designed to tackle. Progress has undoubtedly been made by the Commission and in certain member states over the last two years. However, if the green shoots of economic recovery are to be harnessed into a long-term upswing coupled with sustained growth and new jobs, the delivery of the SBA and compliance with its overriding 'think small first' principle must be perceptible throughout the EU.

The Employers' Group (Group I) of the European Economic and Social Committee has 113 members, and is made up of entrepreneurs and representatives of entrepreneur associations working in industry, commerce, services and agriculture in the 27 Member States of the European Union.

News source: EU Press Room link: article