The Eurobarometer has recently published an interesting analysis of skills shortages in Europe, with a particular focus on SMEs. You can find the report, a summary, data sheets and single-country analyses here: https://europa.eu/eurobarometer/surveys/detail/2961
One of the main problems is finding technical staff, a point we have been making for some time: technical staff is mainly trained and qualified in work-based learning, with consistent learning and working shares of time inside companies. This means all efforts the European Commission is putting into improving skills during this European Year of Skills should be focussed on this training approach and not on University studies or professional schools.
Incentivise and help companies to train the people in-house (with dedicated support from professional schools during 30-50% of the learning time), convince learners and parents that work-based learning leads to secure jobs and good incomes, and we will do only good to the European Real Economy
The Industry, Transport, Research and Energy Committee of the European Parliament (ITRE), with rapporteur MEP Tsvetelina Penkova, proposes to help Startups in a special way, as they would be more disadvantaged than SME, and trying to underline the differences between the two categories of companies. The first impression is that we are seeing a strange version of “food jealousy”. But before we contribute actively to a fight among the poor(-er companies), let’s give a look into the details of this surprising report.
First of all, yes SME and Startups are substantially different. While SME develop their business based on their owners’ practical professional skills and capacities, create trust with clients, raise quality steadily, access markets one after the other, make incremental innovation, employ and train people, scale up their companies step-by-step while struggeling with high taxes and complex bureaucracy, survive crises, inherit from one generation to another their successful stories transferring also a strong entrepreneurial mind-set in the families, and sometimes even become hidden champions in a niche of the global economy, Startups essentially base their business model on one idea: first formulating a (supposedly) disruptive idea for a business, normally with the use of new technologies, then trying to proof the concept, prototyping and starting a first roll-out to the market, and eventually find an investor to sell the business idea and prototyped product. I.e. 9 out of 10 Startups don’t look for becoming a successful company of the real economy, but simply want to monetarise their genius ideas as soon as possible. Good for them if they succeed (and for the lucky Big Companies – from Europe and broad – that buy their ideas and solutions), not really useful for a diversified, resilient and strong economy. Good as an exercise labs for young entrepreneurs, not good enough to build a long-term perspective. And indeed, Startups represent – if much – 3% of the registered companies.
And it is for sure true that Startups have a difficult life, as 9 out of 10 fail in the first 5 years after their business idea had been born. And it is as well true that many of the difficulties they face – and which the report lists in an explanatory note – are the same problems SMEs face. Given that, we could conclude that also SME need a more favourable business environment, better access to finance, less bureuacracy, one VAT number valid for the whole Single Market, better access to markets and finances, support to find skilled workers and employees, etc. But that would be like saying, “we want the same” – quite trivial.
Instead, we have the impression the whole report is intended to obtain one thing: to include Startups more into EU policy making at all levels. As if they could guarantee a long-term interaction with the European Institutions, as well as a consierable number of voters. And it is even very interesting if not a bit annoying, noting how the rapporteurs try to underline the specific role of Startups for the European Commission’s and Parliament’s political goals – as if they would be the ones that bring the innovations for the green and digital transitions, for AI and a net-zero industry, to say: all that what makes Startups already being thepreferred kids on the EU-block (see EIC, etc.).
We think, SMEs do not deserve to be considered less important than others. Our claims are well documented and count for millions of companies in every sector. Simply, there are no “better companies”, independently from being mid-sized, small or micro, “traditional” or “startup”.
We invite Startups to join forces with SMEs and to get better conditions for all – without privileges for some few.
The survey allowed us to identify the top five priorities for entrepreneurs and their teams in this field:
Time matters – SMEs and Mid-Caps want to save 25% of their time from complying with the rules. This would translate into financial savings, but also in less cumbersome procedures. That means it wouldn’t be just more convenient. It would also feel so!
For companies, this is more important than cutting the number of legislative acts or their related reporting obligations.
Clear interpretation – Some regulations are perceived as problematic as their impact and application are often unclear. They need to be better explained.
For example, GDPR is still perceived as causing more problems than previous legislative frameworks for data protection. But that mainly depends on wrong interpretation by lawyers, national public authorities and companies themselves. Video tutorials to explain each point would save time and frustration for companies.
A “Once Only” Approach – European SMEs believe that all that can be produced only once, e.g. ESG, Due Diligence and Taxonomy reporting obligations, should be standardised and done only once. It should be recognized as valid for different needs and in all 27 member states.
Many SMEs flagged that the first document to be adapted in this spirit should be the A1 Form for posting workers abroad.
Digitalise as much as possible – In 2023, producing paper, hand-sign and sending by fax or post is completely anachronistic. Bureaucratic procedures should happen in digital format, significantly reducing the burden on companies.
Act Fast – SMEs and Mid-Caps can’t wait another 7 years, as with the Stoiber Commission between 2007 and 2014. We need results in the next couple of years maximum, or our companies will be less competitive on the global stage.
We invite policymakers to act with the utmost urgency and make the simplification of bureaucratic procedures for small and medium-sized companies a priority.
On September 18, our Secretary General Stefan Moritz talked during the inaugural session of the European Steel Congress organised by our Polish Member Regionalna Izba Gospodarcza w Katowicach in Katowice.
He illustrated our confederation’s positions following the opening keynotes of Polish Ministers Mr. Jacek Sasin and Mrs. Anna Moskwa. Together, they offered a multifaceted and passionate discussion about the difficulties the European Steel industry faces today.
He also had the occasion to hear the insights from the Deputy Speaker of the Polish Senate, Mrs. Gabriela Morawska-Stanecka, and the State Secretary for State Assets, Mr. Marek Wesoły, as well as the MEP Grzegorz Tobiszowski. For European Entrepreneurs CEA-PME and the hundreds of thousands of industrial SMEs and Mid-Caps we represent, the steel industry in Europe is crucial to defend an industrial basis in Europe. To ensure this, we, the big steel producers and the small and mid-sized manufacturing companies with their competitiveness, need to think together while working on challenges like climate change.
After nearly 1,5 years since Russia’s invasion of Ukraine, 2 years since inflation is back in Europe, after years of complaints about the ineffective Late Payment Directive of 2011 – but only 1 year after the announcement by President von der Leyen during her 2022 Speech about the State of the European Union– the European Commission came –finally – forward with a so-called SME-Relief Package.
European Entrepreneurs CEA-PME welcomes this package, particularly because it contains requests we have formulated since time and discussed on many levels. This Relief Package, e.g. includes a clear idea of when and how the Once Only Principle that we have asked for again recently in our most industrialized members’ Manifesto of the Real Economy for a Realistic Industry Policy will be put in place. And this includes – again, after more than 10 years, we are asking for it – finally, the possibility of managing the A1 certificate for posted workers online, once only.
We also appreciate the robust position the European Commission has taken regarding late payments, which promises to reestablish with a European Regulation (i.e. not a Directive to be transposed into national law with all the risks and confusion and delays and inequalities between Member States this would have allowed to produce) a fair relationship between big clients and small suppliers. We will stay alert and do what we can to ensure that this new Late Payments Regulation will be approved by the European Parliament and the EU Council as proposed.
The Head Office Tax System – allowing also smaller businesses to interact only with the Tax Authority where the seat of the company is registered, and not also with all authorities in countries where branch offices are in place – is surely a good invention and will help to promote cross-border business as well as lead to a reduction of tax burdens. An issue European Entrepreneurs CEA-PME has already raised at the time of the publication of the Small Business Act in 2004.
Said this, this Relief Package comes finally, as it is high time to help European SME and Mid-Caps to recover a little bit of competitiveness. Other measures are somehow welcome and offer at least some added value, like, for example, the refinancing of the SME Window of the Strategic Technologies for Europe Platform STEP under InvestEU with some 3-5 billion Euro or the important review of the SME dimension criteria by the end of 2023, including hopefully at least also Small Mid-Caps under the support schemes of the EU.
BUT: now we wait also for other Directorate Generals of the Commission to deliver, and we expect from President von der Leyen that her words in the 2023 Speech on the State of the EU are not only marketing talk.
Europe’s SMEs need less bureaucracy, fewer reporting obligations, more benefits, and more deals. Not only Green, not only Digital, not World Champions in setting rules that hinder ourselves, but a thorough recovery of competitiveness before it is too late.
We look forward to talking with President von der Leyen during the announced Industry Talks in autumn 2023.
European Commission President Mrs. Ursula von der Leyen said she wants to cut the bureaucratic burden for companies. But which ones and how? European Entrepreneurs CEA-PME asks all SMEs and Mid-Caps in Europe: please to tell us what You think!
Please answer this 5-minute survey in your language. See the links below:
On June 28, at the Spark Venue in Brussels, we hosted the first annual SME2B Business Forum Europe. For 2023 edition of this SME Forum, we focused on the need for New Energy for SMEs and Mid-Caps, meaning an approach to our economy that can reinvigorate European companies as they adapt to the many crises happening in parallel today and the challenges ahead of them. The event had Amazon as its Premium Partner, and SME Connect supported it.
Mr Markus Jerger, Executive Chairman of our German member Der Mittelstand, opened the SME forum. BVMW and the newly elected President of our European Confederation of SME Associations. He set the scene for the event by reminding attendants that SMEs are the backbone of the European economy, but they need to know they are being listened to and supported in this trying time to stay committed to delivering prosperity for Europe.
He was followed by our first keynote speaker, Mr Othmar Karas, the First Vice-President of the European Parliament. He strengthened the message by emphasizing the absolute need for European SMEs to stay competitive in the global market.
Our third keynote speech was given by Mr James Waterworth, Amazon Director of EU Public Policy, who gave the audience insights on the company’s commitment to and agenda for solutions that can keep the European economy and its SMEs successful.
We then launched the first dialogue, which focused on the the aspect of SMEs’ and Mid-Caps’ competitiveness under Green Deal conditions. It was opened by Mrs Outi Slotboom, Director for Strategy & Economic Analysis at DG GROW of the European Commission, who spoke about the need for a transition to a green economy that is apt to include SMEs so that they are thriving.
Our Secretary General, Mr Stefan Moritz, moderated this Dialogue 1, which included various views.
Mr Paul Rübig, Member of the Governing Board of the European Institute for Innovation and Technology, Member of the Employers Group at the EESC, and former long-time MEP, stated that the history and strengths of SMEs must be used as a jumping board for the transition and not discarded by forcing changes that might not be fit for purpose.
Mr Michał Boni, Senior Research Associate Martens Centre for European Studies, former Polish Minister of Labour and Social Policy (1991), Minister of Public Administration and Digitalisation (2011-2013), and former MEP in 2014-2019, shared his views that only working with SMEs and other social partners, change can really take place. A centralist approach should be avoided as it is more likely to lead to a loss of time and inadequate results.
Mr David Osimo, Research director at The Lisbon Council and co-author of “Green, Digital and Competitive”, framed the broader picture by examining how the three elements in his book’s title can go together if SMEs are incentivised to innovate.
Two additional members of our confederation also joined the debate, with Mrs Annalisa Guidotti, Director of Public Affairs at CONFAPI, and with Mr Alexandre Montay, Executive Delegate of the Movement of M-ETI. They both focused on their respective countries, Italy and France and provided a snapshot of the challenges their members are facing while being overwhelmed with multiple challenges. Once again, they agreed that support must come through incentives and not through policies that steer the market.
The second dialogue of the SME forum moved the focal lens to the international situation.
Moderated by Dr Horst Heitz, Secretary General of SME Europe, it included Mrs Marina Kaas, Vice-President of European Entrepreneurs CEA-PME, as well as of our Estonian member association EVEA, Mrs Svitlana Mikhaylovska, Deputy Director General of European Business Association Ukraine and Mrs Wincate Muthini, Programme Director of the Pan-African Chamber of Commerce and Industry.
Our first two guest speakers focused mostly on the many problems caused by the invasion of Ukraine and how it is destabilising the region. SMEs need further support to ensure they can keep up and be ready for when the time of rebuilding comes. Our third speaker focused on the opportunities that the African market offer for cross-continental trade between companies (you can find out more on our platform, African European Entrepreneurs).
The third dialogue of the SME forum examined how new technologies can help the Green Deal transition. It was chaired by Mrs Anette Galskjøt, CEO of our member, the Danish Export Association.
The panel included Mr Jürgen Tiedje, the Head of Unit Industrial Transformation of the Directorate-General Research and Innovation of the European Commission, who reminded the audience that the public sector could support SMEs as they invest in innovating and coming up with new solutions, but it should be done in a way that is most effective for both parties.
Mrs Algara Castle, the eFuel Alliance Head of EU Affairs, and Mr Walter Hueber, CEO at Kitepower,both delved into how the technologies from their sector, e-fuels and airborne wind energy,could provide results to make our economy and energy production sustainable even if they are not as well known, and at times supported, as other solutions.
MrWouter IJzermans, the Executive Director of BEPA, the Batteries for EU Partnership, and Dr Arthur ten Wolde, the Executive Director of Ecopreneur.eu, as well as Mr John Braeckeveldt, President of our member European Business Association Georgia, instead looked at how cooperation with the purpose of developing sustainable solutions can bring SMEs together in finding their path, and more can even be done when they are in a dialogue with public institutions.
After a short coffee break, we heard from MEP Brando Benifei, Member of the Committees on Internal Market and Consumer Protection, and on Civil Liberties, Justice and Home Affairs, and Rapporteur of the AI-Act. He argued that SME-led technological innovation could make the economy of Europe thrive. Legislation hence needs to support a green transition that allows companies to be both smart and competitive.
Our SME forum concluded with our fourth and final dialogue. It presented an overview of what digital solutions are out there to help the green transition. it was chaired by Mrs Anna Klissouras, Principal for EU Public Policy and SME Ambassador at Amazon.
MEP Lukas Mandl, Chair of the European Parliament Delegation for the relations with the Korean peninsula, Vice Chair of the EP-Subcommittee on Security and Defence, and member of the Committees AFET and LIBE, offered a broader political perspective, reminding the audience that digital solutions are appearing worldwide and European companies must be allowed to keep up the pace of the global markets.
Our Members joined the debate in the form of our Treasurer and Secretary General of the Austrian Business Association OGV, Mr Stephan Blahut, and Mrs Iris Brokamp, Secretary General of Eurojuris International as moderator. They were vocal about the need for SMEs who face a daily crisis and, with more crises piling up, they need easy-to-access solutions or be put in a position to let their entrepreneurial spirit flourish and come up with their own.
The panel included entrepreneurs like Mr Frank Riemann,CEO of Fairdoy Ltd, and Mr Tomas van der Heijden, Co-Founder & CEO at Briink as well as the more academic perspective of Professor Marcello Colledani, Professor at the Polytechnic University Milan and Coordinator of Digiprime, who all focused on presenting of existing and upcoming digital technologies, like AI applications, and what their strengths can bring to SMEs, as well as what limitations need to be overcome.
This concluded a great day that surely put new energy into our work to support SMEs across Europe. We thank all our speakers and guests for joining us in a great day of discussion and learning that will be conducive to more actions to help companies in Europe get the best deal to overcome the ongoing crises.
We launched a manifesto for aRealistic Industry Policy that presents ten key action points that can be implemented across European industrial, environmental, energy, skills, innovation and trade policies to truly support the European Real Economy and act as a springboard for its growth.
The SME and Mid-Caps of the continent are often referred to as the backbone of the European economy, meaning they are the European Real Economy.
The backbone is under a lot of pressure: a top-down, dirigiste approach is causing higher production costs and dependency on imports beyond the single market. This approach and its effects constrain the flexibility and innovativeness of European SMEs, not letting them thrive and bring to the market the solutions most fit for consumers.
We identified four specific points of concern:
1. The illusion of European policymakers that solving the biggest challenge, global climate change could be done by Europe alone, and specifically by European industry alone, as the leading responsible actor and executor of political strategies.
2. The strategy towards this critical objective is currently defined by national and European governance instead of focusing on defining negotiated targets and aims and leaving it to companies and the market to find the most suitable solutions.
3. This approach has entailed strict timeframes and deadlines, increasing prohibitions, and putting massive pressure on our productive European system, which is made up of individuals, companies, families, and communities.
4. It has also favoured specific technologies and processes, excluding other economic players from the market by law, making the emergence of unforeseen innovations impossible, hence limiting future opportunities.
This approach already had a significant impact on the SME ecosystem of Europe, causing an increased demand for capital to keep pace with the new demands and consequently bringing many companies into financial and existential danger.
The Manifesto aims to address how this issue can be tackled with ten key action points. These points include, among others, a demand for SMEs to be more thoroughly involved during the formulation of European strategies to respond to ongoing crises and a demand for legislation to be evaluated against its impact on SMEs to lower the burden.
They also demand cutting red tape and reporting to diminish the impact of companies already grasping for resources and to let the market draw out the best technological solutions to respond to climate change, moving from a top-down to a bottom-up approach.
“Our entrepreneurs have long understood that environmental sustainability and digitization processes are not only an essential horizon but also an opportunity for development and competitiveness for their businesses. But it is necessary to keep together sustainability and productivity,” said Maurizio Casasco, Honorary President of European Entrepreneurs CEA-PME and President Emeritus of CONFAPI, the Italian association of SME
“We – the European Real Economy – need a more Realistic Industry Policy now. A policy that helps enterprises to rise to the challenge that enables them to innovate their business models, that facilitates the access to markets, particularly by reducing bureaucratic burdens”, said Markus Jerger, President of European Entrepreneurs CEA-PME.
Press Contacts
Lorenzo Marchese
CEA-PME European Entrepreneurs Communication Manager
We are pleased to invite you to our upcoming webinar on the EntreVet project, taking place on June 1st at 15.00 CEST. During the webinar, we will discuss how the EntreVet project can be considered a model to help promote entrepreneurship in vocational training institutes.
Join us to learn about the added value of the EntreVet project and learn more about its evaluation mechanism and the certification scheme for the current entrepreneurial capacities of VET institutions. With EntreVet, you can enhance your organization’s capacity to transfer an entrepreneurial mindset and crucial skills to your students and staff and foster a culture of innovation and creativity.
This webinar is an excellent opportunity for managers and trainers from Vocational Education and Training Centers, professional schools and institutes, and enterprises that rely on these centres, to assess their entrepreneurship training capacity and learn about new ways to promote entrepreneurship education.
We look forward to seeing you there!
The largest confederation of voluntarily associated small and medium-sized companies in Europe.
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