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IP/10/723

Brussels, 11 June 2010

Small Businesses: Better policy support for EUs jobengine

With the onset of the economic crisis in 2008, a very positive development ofsmall and medium enterprises (SME) has come to a halt. Between 2002 and2008, SMEs in the EU turned out to be the most important EuropeanEconomy job engine. With 9.4 million jobs created between 2002 and 2008SMEs outperformed large firms. This is in sharp contrast to an estimatedloss of 3.25 million jobs in the SME sector over 2009 and 2010 further to theannual SME report published today. For each EU Member State and 10 more

countries, selected key facts describing the national SME sector areprovided, such as number of SMEs and employment creation. They alsounderline that Member States have undertaken many relevant policy actions,but much more needs to be done to ensure that the guidelines set by theSmall Business Act (SBA) are fully implemented.

European Commission Vice-President Antonio Tajani, in charge of Industry andEntrepreneurship, said: "SMEs represent our economy's future, only they cangenerate new employment opportunities.. In light of the rather testing times ahead,an effective policy response is crucial in helping SMEs to be successful. MemberStates should step up actions that give a boost to SMEs. For SMEs to thrive, theyneed a more business-friendly environment across Europe".

Providing jobs for almost 90 million Europeans, Europes 20.7 million SMEs continueto be the EU's economic backbone. To spur its role as the EUs most important jobgenerator, a speedy implementation of the actions contained in the Small BusinessAct (SBA) is critical. It is the EUs flagship SME policy initiative and foresees actionsby the Commission as well as by Member States in 10 different policy areas (seegraph below).

The main conclusions of the SME performance review are:

SMEs outperformed large firms in 2002-2008 in employment generation: Onaverage, between 2002 and 2008, the number of jobs in SMEs increased by 1.9%annually, while the number of jobs in large enterprises increased by only 0.8%

annually.

Crisis struck large and medium firms first, but smallest ones hit harder now:Estimates for EU-27 SMEs' production in EU-27 in 2009 hint at a decline by 5.5%. In2009, this happened mostly in large and medium-sized enterprises, and less so formicro and small enterprises which are expected to be most affected in 2010 andbeyond as initial support measures are phased out.

SMEs in United States hit hard too: The number of businesses is estimated tohave declined by 0.6% in 2008 and by 2.2% in 2009.

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Member States active in implementing SME support measures: As regardspolicy developments, the SBA fact sheets reveal that more than 500 policy measuresacross all ten SBA principles were implemented in 2007-2009. Only a minority 9 ofMember States were active across the entire range of the 10 SBA principles.

Distribution of policy measures by SBA policy areas in

EU member states (2007-2009)

Public procurement

and state a id

9%Access to finance

20%

Single market

5%

Entrepreneurship

14%

Second chance

4%

Think small first

6%

Responsiveadministration

11%

Internationalisation

10%

Environment

5%

Skills and

innovation

16%

Source: DG ENTR.

On the SME performance review (SPR)

The SME Performance Review (SPR) provides information on the situation ofSMEs and SME policy in the EU, as a contribution to evidence-based and effective(SME) policy making. It was launched in 2008, the same year as the Small BusinessAct for Europe (SBA).

The report was developed by EIM Business & Policy Research at the Commissionsrequest and the views expressed in this document are solely those of EIM and donot necessarily reflect those of the Commission. This SME report strives to providean aggregated EU-level analysis. The latest figures at the time of writing the reportconcern 2006, whereas figures for later years were estimations made by thecontractor.

More information

SME performance review

http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htm

"Small Business Act" for Europe

http://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htm

European Small Business portal

http://ec.europa.eu/enterprise/policies/sme/index_en.htm

http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/small-business-act/index_en.htmhttp://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/index_en.htm