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SME-friendly Regions and CitiesSurvey of EU local and regional authorities
Mr Witold Krochmal, Rapporteur for the forthcoming CoR opinion on Competitiveness of Enterprises and small and medium-sized enterprises (2014-2020), invites you to provide your initial feedback on the policies for supporting SMEs and increasing the "business friendliness" of EU regions and cities.
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Your contribution will feed into both Mr Krochmal's draft opinion (final adoption on 9-10 October 2012) and the 3rd CoR Monitoring Report on Europe 2020, due to be published in October 20121.
PLEASE FILL IN THIS QUESTIONNAIRE IN ANY EU LANGUAGE USING THE SPACES PROVIDED AND SEND YOUR COMPLETED QUESTIONNAIRE IN ANY WORD FORMAT TO:
[email protected] 23 APRIL 2012
For more information, including details of how to join the Europe 2020 Monitoring Platform, go to:
www.cor.europa.eu/europe2020The questionnaire will be available on this website in all languages as of the last week of March.
1 This annual report gives an account of how Europe 2020 is implemented on the ground, and the extent to which it is implemented in partnership by all tiers of government, ahead of the next European Commission's Annual Growth Survey. The 2nd CoR Monitoring Report was adopted in December 2011:http://portal.cor.europa.eu/europe2020/news/Pages/2ndCoRMonitoringReportonEurope2020.aspx
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CONTRIBUTOR INFORMATION2:Name of sender: David Santorum Mira
Contact details: (address, telephone, e-mail)
Fundación Galicia EuropaRue de la Loi 38, bte. 21040 BrusselsTel. : +32 (0)22 346 933Email: [email protected]
On behalf of: (name of local or regional authority)
Instituto Galego de Promoción Económica (IGAPE)Consellería de Economía e Industria – Xunta de Galicia (Regional Government of Galicia)
Country: SpainMember of the EUROPE 2020 Monitoring Platform (formerly Lisbon Monitoring Platform)3:
Yes No
1) Please summarise the current impact of the financial and economic crisis on enterprises in your area, especially SMEs.
The financial and economic crisis is still seriously affecting businesses throughout Spain. The number of active businesses fell by 1.3% in 2010: this was the third successive year that the number had fallen (Figures from the INE [Spanish Statistics Institute]).Galicia has not been able to escape this trend. Thus, in 2011 there were 1.2% fewer active businesses than the previous year, with a total of 196 535 active businesses (INE figures).SMEs are undoubtedly the worst affected by the crisis. Most of them pinpoint lack of liquidity as their main concern.
2) Has your local/regional authority taken any specific measures to help SMEs address the crisis since 2008? YES NO If YES, please describe in brief.
The IGAPE has adopted a series of measures designed to facilitate the establishment of entrepreneurial projects and foster moves to boost the competitiveness of existing businesses, as well as cooperation and internationalisation.
Entrepreneurs:- IGAPE-ICO-Entitades budget line: Entrepreneurs and SMEs which promote investments using funding
2 Privacy Statement The follow-up to your contribution requires that your personal data (name, contact details, etc.) be processed in a file. All the answers to the questions are voluntary. Your replies will be kept for a period of 5 years after the receipt of your questionnaire. Should you require any further information or wish to exercise your rights under Regulation (EC) No. 45/2001 (e.g. to access, rectify, or delete your data), please contact the data controller (Head of the Networks and Subsidiarity Unit) at [email protected]. If necessary, you may also contact the CoR Data Protection Officer ([email protected]). You have the right of recourse to the European Data Protection Supervisor at any time (www.edps.europa.eu). Please note that the questionnaire with your contribution and your contact details will be published online. Your questionnaire may be transmitted to CoR Rapporteurs and other EU institutions for information. Should you not agree to this, please inform us accordingly.
3 If you are interested in joining the Europe 2020 Monitoring Platform, please visit: http://portal.cor.europa.eu/europe2020/Knowledge/Pages/BecomeaMember.aspx
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from one of the budget lines of the 2008 Business Promotion Programme of the Official Credit Institute (ICO) can obtain an additional subsidy from IGAPE.
- 2010 Re-Emprende programme: IGAPE gives grants (co-financed by the European Regional Development Fund) to entrepreneurs who promote projects involving investment of between EUR 50 000 and 1 500 000.
Competitiveness:- Re-Invirte Ferrol facility: Financial support for SMEs in the hotel, commerce, tourism and service
sectors in the districts of Ferrol, Eume and Ortegal.- Re-Solve+ programme: Subsidised and approved finance line for the self-employed, micro-enterprises
and businesses. - Re-Bote programme: Guarantee line to help SMEs and larger companies obtain access to additional
operational financing. Funding is provided via credit lines, discounts, factoring and confirming. - Re-imaXina programme: Finance line to help Galician SMEs, entrepreneurs and micro-enterprises to
set up investment projects, both for the start-up of new businesses and to improve the competitiveness of existing businesses or companies.
Cooperation:- IGAPE provides incentives for the development of projects by groups of enterprises to increase
cooperation and thus strengthen Galicia's network of associations. Also, with a view to encouraging more innovative business groupings and having a knock-on effect, specific incentives are offered for the development and implementation of strategic plans for innovative Galician business groupings.
- Programme to support innovation in SMEs (Innoempresa programme): The basic aim is to help Galician SMEs to become more innovative and competitive by undertaking projects (individually or jointly) in the fields of business management, technology and organisation.
Internationalisation:PEXGA: The Galicia Network of Enterprise Platforms for overseas business (Pexga Network) is a joint initiative of the Confederation of Galician Entrepreneurs and IGAPE, designed to provide Galician businesses with high value-added services in the foreign trade field.
3) To what extent do you believe that the crisis has forced your region/city to rethink the regional policy making (process) on entrepreneurship and to apply the Small Business Act's "Think Small First" principle? Please explain in brief.
SMEs account for over 95% of the Galician business sector. Supporting them has therefore always been a prime objective of the Galicia regional government's economic policy, even before the current crisis. Economic promotion of SMEs is the main task of IGAPE, offering a wide range of support, instruments, assistance and services.
It is nonetheless true that the current crisis has put more emphasis on making Galician businesses more competitive and more international. To this end, IGAPE is carrying out various projects and schemes to make Galician SMEs more open to new markets and thus increase their exports.
4) Please state which of the following objectives for SMEs are supported by your local/regional authority. For each item selected, please state briefly what form this support takes: a) improving access to new markets and fostering international growth (within and beyond the
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European Union) b) ensuring easier access to financing for SMEsc) helping address the regional skills mismatchd) promoting entrepreneurship as a career pathe) improving internet access f) e-government services for SMEsg) facilitating innovative activity and marketing of its resultsh) others (please specify)
a) As already noted in the answers to questions 2 and 3, IGAPE is investing strongly in the internationalisation of Galicia's businesses. With a view to helping Galicia's SMEs become more international, IGAPE and the Confederation of Galician Entrepreneurs (CEG) are setting up a network of enterprise platforms in the markets of greatest interest to Galician businesses.
b) IGAPE and the ICO are setting up investment financing lines for entrepreneurs and SMEs. c) Dd) IGAPE's key objectives include fostering the creation of new businesses. It thus aims to provide
training, advice and mentoring at appropriate stages, to help turn business ideas into concrete projects, as well as facilitating tools, services and financial instruments to support the establishment of new business initiatives.
e) Df) IGAPE uses technologies such as e-signatures to facilitate and simplify administrative
procedures.
5) How SME friendly is your legislation (including your system of taxation)? What legal changes could be introduced at European, national and/or subnational level to improve the situation for businesses?
Broadly speaking, Spanish fiscal legislation is quite SME friendly, as there are special tax rates and deductions for them.
It is worth noting that the tax rate for SMEs is 25% (Article 114 of the law on corporation tax, in tandem with Articles 108 and 28 thereof), compared with a general tax rate of 30% (Article 28(1) of the law on corporation tax, in tandem with the 8th additional provision thereof). Certain incentives are also offered for SMEs (e.g. freedom of amortisation) and, in general, tax deductions to encourage particular activities (RD&I, promotion of ICT, export, etc.).
However, it must also be said that Spanish corporation tax is one of the highest in Europe. The case should be considered for reducing the tax base for SMEs. Also, entrepreneurs have long been calling for the simplification of administrative procedures for setting up a business.
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6) In order to increase regional competitiveness, should you target specific economic activities for support? If so, what are these economic activities?
This question is not clear.
7) The European Council recently identified a series of urgent measures for supporting growth, in particular SMEs. Among others, the following objectives were identified: a) Strengthening the Single Marketb) Completing the Digital Single Market by 2015 (in particular: boosting confidence in online
trade; providing better and cheaper broadband coverage)c) Reducing administrative and regulatory burdensd) Removing external trade barriers and ensuring better market access and investment conditions
outside the EUe) Improving access to financef) Delivering top-quality business support servicesg) Promoting entrepreneurship h) Promoting the development of an effective EU-wide venture capital regimei) Making more effective use of pre-commercial public procurement to support innovative and
high-tech businesses.To what extent could these actions improve the situation for SMEs in your region/city? Can you suggest any other action?
a) Europe remains the main market for Galician businesses' products and services. For this reason, any steps to strengthen the single market are welcomed.
b) Online business has become much more important in recent years as it is simple and easy for both businesses and consumers to sell or buy a variety of products. The new technologies make it easier to reach new markets, so any steps in that direction are helpful.
c) Setting up a company always involves a lot of red tape. Simplifying or reducing administrative and regulatory burdens could encourage more people to undertake new projects.
d) IGAPE encourages and helps Galician SMEs to internationalise. Outside the EU, the most interesting markets for Galician enterprises are in Latin America. However, doing business with some Latin American countries can be very complicated, because of the tariff and non-tariff barriers which some of them tend to impose. Eliminating these barriers would make exporting to these countries easier.
e) SMEs' main complaint at present is the difficulty of finding financing. Improving access to finance could help them to keep staff and invest in new projects.
h) An EU-wide venture capital system could be a good way of promoting innovative projects and fostering the spirit of enterprise.
8) The COSME Programme for Competitiveness of Enterprises and SMEs will replace4 the current CIP (2007-2013) and will have a budget of EUR 2.5 billion from 2014 to 20205. Please comment on:a) the potential benefit of the COSME programme for your region
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b) the challenges relating to its implementationc) the action that the national, regional and local authorities in your country could take to make
COSME a success storyd) the role that the local partners of the Enterprise Europe Network or other business support
providers could play with respect to COSMEa) The COSME programme could greatly help Galician SMEs and young entrepreneurs. It could
help improve and extend Galicia's business fabric and thus create new jobs.
b) The main challenge posed by the programme is how to make sure all SMEs and young entrepreneurs know about it. The programme needs to be publicised more widely, so that all interested enterprises can benefit from it.
c) The national and regional authorities can help to make the programme a success by publicising it as widely as possible and co-funding certain projects.
d) The Enterprise Europe Network could help SMEs wishing to set up or export to other countries, advising them on the steps they need to take.
9) Do you wish to share your experiences (please indicate: title of the project/policy action, brief description, source of funding, if the action is carried out in partnership with other levels of government, obtained results, website and any other element you deem useful) on the above issues and/or add any further comments or suggestions? If so, please include your comments here. Please send us any additional relevant reports/policy papers which you may have available.
THANK YOU FOR YOUR COOPERATION!
4 Compared to the CIP, COSME places a greater emphasis on overcoming the direct obstacles which SMEs face when setting up a business, accessing foreign markets or looking for business information and advice. The programme's five key actions are: (1) Access to finance for SMEs through dedicated financial instruments; (2) Enterprise Europe Network: a network of business service centres; (3) Entrepreneurship (supporting transnational networks and knowledge sharing); (4) Improving framework conditions for the competitiveness of enterprises and policy development; (5) Internationalisation of SMEs.
5 More information at: http://ec.europa.eu/cip/cosme/
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Background information
Although Europe 2020 remains the EU's long-term strategy of structural reforms for smart, sustainable and inclusive growth, the European Council set out a number of short term priorities in the first quarter of 2012 to help boost growth and jobs. One of these priorities is to ensure the business continuity of SMEs and to strengthen them in view of the key role they need to play if the European economy is to return to a path of growth and job creation. .
To this end, the main action undertaken by the EU institutions include:
Small Business Act6 - a set of 10 principles which should guide the design and implementation of policies both at EU and national level. This is essential to create a level playing field for SMEs throughout the EU and improve the administrative and legal environment so as to allow these enterprises to unleash their full potential to create jobs and growth;
Improving access to finance, delivering top-quality business support services and promoting entrepreneurship through the COSME Programme for Competitiveness of Enterprises and SMEs, which will have a budget of EUR 2.5 billion from 2014 to 2020 and replace the current CIP (2007-2013). Compared to the CIP, COSME places a greater emphasis on overcoming the direct obstacles which SMEs face when setting up a business, accessing foreign markets or looking for business information and advice. The programme's five key actions are: (1) Access to finance for SMEs through dedicated financial instruments; (2) Enterprise Europe Network: a network of business service centres; (3) Entrepreneurship (supporting transnational networks and knowledge sharing); (4) Improving framework conditions for the competitiveness of enterprises and policy development; (5) Internationalisation of SMEs7.
Promoting the development of an effective EU-wide venture capital regime, through an "EU passport" (to allow venture capital fund managers to grow and to market their funds across the EU using a single set of rules) and a "fund of funds" (to provide cross-border risk capital and a financing scheme to support innovative SMEs).
Making more effective use of pre-commercial public procurement to support innovative and high tech businesses.
Reducing administrative and regulatory burdens at EU and national level.
The European Entrepreneurial Region (EER) award label, identifying and rewarding EU regions with outstanding entrepreneurial visions).
6 http://ec.europa.eu/enterprise/policies/sme/small-business-act/ .7 More information at: http://ec.europa.eu/cip/cosme/.
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