No C 232/58 Official Journal of the European Communities 31. 8. 87 
Opinion of the Economic and Social Committee on the action programme for SME 
(87/C 232/20) 
On 3 October 1986 the Commission decided to consult the Economic and Social Committee, unnder 
Article 198 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the 
Committee's work on the subject, adopted its Opinion on 3 June 1987, in the light of the report by Mr 
Calvet. 
At its 247th plenary session (meeting of 1 July 1987), the Economic and Social Committee adopted the 
following opinion unanimously: 
Foreword 
Before starting its examination of the Commission proposal, 
the Committee expresses its satisfaction at an action 
programme which represents the culmination of a process of 
gradual acceptance of the key role that SMEs play and will 
continue to play in the Community's socio-economic life. 
The programme is at present the final link in a chain of 
actions which began twelve years ago and which, with the 
heavy involvement of all the Community institutions 
(Commission, European Parliament, ESC), has now 
produced this major scheme for an ambitious and potentially 
effective special policy for SMEs. 
It is clear that the development and the future of the 
Community's small firms will largely hinge on the 
convergence of overall policies to ensure more flexible 
markets, the promotion of a spirit of enterprise and, last but 
not least, the completion of the internal market within the 
renewed spirit of cooperation and dialogue which underpins 
the current cooperative growth strategy. 
However, it is equally clear that the present economic 
situation and the rapid changes which are revolutionizing 
production methods bring a need for specific policies for 
small firms, at both Community and national level. 
The Commission action programme falls into this latter 
category, and it is as such that it is examined in the present 
opinion. 
Expressing its general satisfaction with the Commission 
document, the Committee feels that the ideas presented in 
this framework programme require urgent and determined 
implementation. It will study the practical and sectoral 
aspects, and their connection with other particular 
Commission policies (regional, technological, social, etc.) 
when it examines the large number of implementing 
provisions which the programme will need. Accordingly, the following pages analyze the action 
programme as an overall strategy for small firms. Chapter 1 
contains general comments on parts I and II of the 
Commission proposal, while Chapter 2 provides specific 
comments on part III. 
1. General comments 
1.1. The Committee welcomes the Commission's action 
programme for SMEs as a further demonstration of the need 
to solve the problems besetting this sector and hence the 
European economy as a whole. The Committee has drawn 
attention to this need in a number of documents since 1974, 
the most recent being those on small firms in the services 
sector and the importance of technological research and 
development to small and medium-sized enterprises 
(SMEs). 
The Committee is also pleased to note than many of the ideas 
contained in the Committee's 1982 opinion on the 
promotion of the small and medium-sized enterprises sector 
in the European Community (') have been incorporated in 
the present programme. 
1.2. When considering Community-level adoption of a 
coherent set of measures to encourage the setting-up and 
development of small firms, we must pinpoint (a) the stage at 
which problems arise, (b) the authorities whose 
responsibility it is to solve them and (c) which particular 
SMEs are affected. In this way we can define the role of both 
the Community and Member State authorities. At all levels, 
measures will have to be implemented, stepped up and 
coordinated. The fact that microeconomic production 
structures differ greatly from one Member State to another 
means that many measures will obviously have to be carried 
out at national level (whilst remembering the Community 
context). 
0) OJ No C 285, 9. 8. 1982, p. 16. 
31. 8. 87 Official Journal of the European Communities No C 232/59 
1.3. The Committee recognizes the enormous difficulties 
involved in arriving at a homogeneous definition of SMEs 
according to sector and country. Nevertheless, bearing in 
mind the distortions to competition policy which can arise 
from the heterogeneity of the term, two recommendations 
may be made: 
— the Commission should undertake forthwith the difficult 
task of formulating one or more definitions of SME so 
that the term can be used with some degree of 
uniformity, 
— pending this the Commission should ensure that the 
present welter of definitions cannot be used arbitrarily to 
create distortions of competition. 
Under no circumstances, however, must these measures to be 
taken by the Commission delay the implementation of the 
proposed programme. 
1.3.1. Moreover, it is well known that the problems of 
medium-sized firms are sometimes very different from those 
of small or craft firms: the measures to be implemented and 
the approach taken to SMEs will have to take account of 
this. 
1.4. It is generally agreed that the expansion and 
strengthening of SMEs will have a favourable impact on 
employment in the medium and long term. This can already 
be seen in many sectors, although in some other sectors and 
countries SMEs are encountering employment problems 
characteristic of a period of transition and adjustment. 
1.4.1. However, the evidence that small firms can be 
made powerful instruments against unemployment does not 
make this the only reason for supporting their expansion. 
1.4.2. The expansion and changing role of SMEs (which 
have always occupied a prominent position in the industrial 
fabric) is also the result of an economic and technological 
revolution with far-reaching effects not only on employment 
but also involving the gradual emergence of a new 
socio-economic framework. Moreover, it is the Committee's 
view that the aid provided should be generalized, covering 
the three categories of enterprise (processing, commercial, 
service sector), and that the definition of development 
priorities should not be influenced by political 
considerations. 
1.4.3. Support for small firms should never replace or 
squeeze out the attention given to larger firms: the two 
should go hand in hand. In the rapid process of industrial 
renewal, a new optimum equilibrium between the two types 
of firm is being forged, but they will remain 
interdependent. 
1.4.4. It is important to remember that many small firms, 
while playing a crucial role in generating employment and growth, only operate within their national borders. 
Accordingly, it will not be sufficient simply to examine 
Community provisions in respect of barriers to free trade; 
care will also have to be taken to ensure that provisions in 
other areas do not impede the achievement of these vital 
objectives, with due respect for all the economic and social 
objectives which form the Community patrimony. 
1.5. Furthermore, an environment propitious to the 
creation and development of SMEs is necessary to persuade 
those persons presently operating in the black economy to 
return to legality. As the 1982 Committee opinion on the 
promotion of SMEs pointed out, the black economy is not 
only extremely harmful to the public interest because of the 
evasion of taxes and social security contributions, but is 
especially damaging to the small firms sector. This being the 
case, and as the situation in many of the Member States has 
worsened in the last few years, the Commission could 
usefully draw up a series of guidelines for the national 
authorities on how to bring those operating illegally into line. 
These guidelines could be taken directly from the study 
commissioned by the European Council in The Hague in 
June 1986. 
1.6. The success of the programme will depend to a large 
extent (a) on the financial, technical and human resources 
available to the Commission for its implementation and on 
the coordination of these resources, and (b) on the political 
will of the Council and the Member States. 
1.6.1. The Commission should take steps to centralize all 
the aspects of concern to SMEs in a single body within the 
Commission structure. SME owners would then have a 
single channel for their dealings with the Commission. 
This operational role could be effectively filled by the Task 
Force; for this it will be necessary to strengthen and expand 
its mandate beyond purely coordination to take in 
management functions as well. 
A further point: the Community budget must schedule the 
resources needed to carry out every single action contained in 
the programme, something which is not the case with the 
1987 budget. Under no circumstances must the budget be 
allowed to provide financing for a specialized body which 
would rapidly become a European Assistance Centre, and 
which the representative SME organizations have come out 
clearly against. The role of the Task Force will be to 
undertake studies, consulting the representative social 
organizations, which will lead to Community measures 
geared to the needs of small firms, and to propose these to the 
Commission. 
Furthermore, the evidence that only a limited proportion of 
Community funds is aimed at and actually reaches SMEs 
No C 232/60 Official Journal of the European Communities 31. 8. 87 
(undoubtedly far smaller than that received by large firms) 
points to the need for a major budgetary and financial effort 
to support the programme. The Task Force should study and 
monitor that part of Community aid which is designated for 
and should end up in the hands of SMEs. 
1.6.2. The political will of the Member States was 
apparent in the final declarations of the European Council 
meetings of 29 and 30 March 1985 in Brussels and 2 and 3 
December 1985 in Luxembourg. These declarations called 
for the removal of obstacles to the proper development of 
SMEs. 
The Committee hopes that the spirit evinced by the Heads of 
State and Government of the Member States will be reflected 
by the Council of Ministers when it adopts binding 
provisions for the implementation of the action 
programme. 
1.7. The Committee urges the Commission to set 
deadlines for each section of the action programme. These 
should in no instances be later than 1992, the projected date 
for the completion of the framework for the internal market. 
They should be accompanied by a carefully drawn up, 
detailed schedule for implementing measures, according to 
priority. The order of priorities would have to be studied and 
set out clearly, starting preferably with urgent measures for 
creating the most favourable economic and financial 
environment for small firms, and developing the more 
specific measures gradually, albeit as quickly as the Task 
Force is able. This would give SME managers a sense of 
security and confidence in the future, and allow them to plan 
their future development with more certainty. 
The Committee also recommends the establishment of a 
monitoring system, so that the Commission can assess the 
effectiveness and results of the measures adopted. Periodic 
reports on these aspects would be sent to the other 
Community institutions, including the Committee. 
1.8. Lastly, the Committee notes that there is a whole 
range of economic and administrative activities in which 
small firms achieve major economies of scale when they work 
together (use of common services, credit management, 
coordination of research, and much more). It must also be 
remembered that the SME sector covers an enormous and 
extremely disparate range of businesses. Community action 
will therefore have to be highly adaptable and flexible. Close 
contact between the Community authorities and the various 
SME organizations would provide the best guarantee of 
this. The Task Force will thus have to establish relations and 
extend its contacts with SME organizations, institutes, 
advisory and training centres, etc. at both national and 
Community level. Small firms also need to form a common 
front for certain key aspects of their participation in 
institutional dialogues and negotiations, at both Community 
and national level. 
SME organizations, in all their forms (associations, 
chambers of commerce or trade, enterprise agencies etc.) are 
undoubtedly the best way to disseminate information and 
coordinate joint measures. 
The Commission will thus have to devote special attention to 
this type of organization, to encourage them to provide the 
advisory and support services which these firms need. In no 
case must this involve financial support from the 
Community. 
1.9. Similarly, trade union presence in small firms 
(naturally, subject to the relevant national legislation) should 
assist them in their socio-economic activity, encouraging 
consultation and agreement between workers and employers 
in a harmonious and mutally supportive fashion. Such 
unionization is part of the cooperation policy to be followed 
by trade unions, representative organizations, and the small 
firms themselves. 
2. Specific comments — Action programme 
2.1. Providing a favourable environment for firms 
In the Committee's view, achievement of this objective is the 
cornerstone on which any action to support small firms will 
rest. In other words, the adoption of any concrete aid 
measure will rest on the creation of an environment 
favourable to the development of small firms. 
It must be remembered that the environment in which SMEs 
operate does not involve solely the public authorities and the 
laws and regulations which govern company life; it also 
involves other socio-economic groupings (large firms, small 
firms, management and labour, etc.) with which small firms 
need to maintain smooth and flexible relations. 
2.1.1. Promoting the spirit of enterprise 
2.1.1.1. It is necessary to encourage not only the 
setting-up of individual firms, but also the creation of 
31. 8. 87 Official Journal of the European Communities No C 232/61 
cooperative associations of firms and cooperation 
arrangements, including linkage with larger firms. 
An extremely useful instrument to encourage this 
cooperation at Community level will be the European 
Economic Interest Grouping, the effective implementation of 
which needs to be speeded up. 
2.1.1.2. As part of the promotion of initiatives for young 
entrepreneurs, it should be ensured that the setting up of 
cooperatives and similar bodies, such as the 'sociedades 
anonimas laborales' (workers' cooperatives) in Spain, 
'consorzi' (cooperative associations) in Italy, etc., is just as 
practicable as the setting-up of any other form of small 
business, without this entailing any distortion of 
competition. 
A key role could be played by business and innovation centres 
which, with Community support, could operate pilot 
schemes to check small-business potential in regions with 
high youth unemployment. 
2.1.2. Improving the administrative 
environment 
2.1.2.1. The Committee realizes that at both national 
and Community level certain laws and administrative 
provisions will need to be adapted to the special features of 
SMEs, provided that adaptation means simplifying 
provisions without altering their original intention, although 
in some cases the necessary changes may be more substantial. 
This does not mean blanket deregulation; it is merely to note 
the need to adapt to the new economic and technical 
structures. 
Existing provisions were certainly not designed to hinder the 
entrepreneur. However, in many cases they may have proved 
obsolete, unnecessary, or sometimes even inadequate. The 
proposed procedure will have to assess in each case: 
— the original objective for which the provision was 
designed, 
— the present degree of obsolescence or inadequacy of the 
provision with respect to its objective, 
— the desirability and socio-economic cost of replacing, 
amending, abolishing, retaining or supplementing it. 
It is obvious that dialogue between all the social groupings 
-will play a major role in this assessment; the activity of SMEs 
urgently needs to be made more flexible, without lowering 
guaranteed basic social standards. 2.1.2.2. The review of the provisions affecting small 
firms should, as in other aspects of Task Force activity, be 
conducted in such a way that it is not seen as a form of 
discrimination against large firms, but as the correction of 
precepts which fail to take account of the special features of 
small firms, with the sole aim of placing them on an equal 
footing in their economic activity. 
An instrument to encourage harmonious relations between 
the two categories of firm, promoting dialogue and 
cooperation, would be useful here. This could take the form 
of the 'partnerships' which have appeared in some Member 
States over the last few years. 
2.1.2.3. The need to reduce the legal and administrative 
burdens on small firms to a suitable level, according to 
sector, makes it essential to establish which provisions have 
priority, depending on the importance of their objectives. 
The institutions will have to tailor their requirements to the 
actual capacity of the existing bureaucratic and 
administrative machinery. An otherwise useful provision, in 
the hands of an administrative structure which is unable to 
apply or monitor it, becomes a burdensome instrument 
leading to market distortion and providing an incentive to 
fraud. 
Provisions, and Community provisions in particular, must be 
presented in a coherent manner and formulated in a clear and 
up-to-date fashion. 
When the national and Community authorities consider the 
measures to be adopted to improve administrative services, 
they will have to take account of the fact that in those 
Member States which have more complex structures, SMEs 
will come into contact with administrative authorities at 
different levels; the central, regional and local 
administrations will therefore have to simplify their 
arrangements. 
2.1.2.4. The 'impact statements' that are to be supplied 
with all legislative proposals submitted by the Commission 
are a great step forward for firms, and for small firms 
especially, and will be of great help to the Committee's work. 
The Committee would thus like to receive the statements on 
the provisions it is to consider. The representative 
organizations who are to be consulted will also need to have 
access to the impact statement on the subject of the referral. 
Perhaps this could be best achieved by its publication in the 
Official Journal. 
In order not to distort their positive effects, these statements 
should be used as an additional source of information to the 
contents of the provisions themselves, forming a basis for any 
modifications which might prove necessary to avoid 
prejudice to firms and to small firms in particular. They 
should not be an additional source of red-tape to draw out 
the decision-making procedure unnecessarily, or paralyse the 
No C 232/62 Official Journal of the European Communities 31. 8. 87 
provision before it is approved. The data included in these 
statements should thus refer to the Community as a whole, 
and should not be open to differing interpretations at 
national level. 
2.1.3. Monitoring the completion of the 
internal market with a view to helping 
SMEs 
2.1.3.1. The completion of the internal market should 
automatically mean the creation of a climate favourable to 
business, SMEs in particular, and the elimination of all 
barriers which currently prevent such firms from penetrating 
the various Member States. Accordingly, the Committee 
would urge the Community institutions to meet the deadlines 
laid down in the White Paper and to avoid delays. 
Regarding the elimination of physical, technical and 
administrative barriers, the Committee would refer to its 
opinion on the White Paper in which it urges the Commission 
to reinforce the dialogue with governments, employers and 
trade-union organizations (*). On the employers' side, the 
organizations representing SMEs have a major role to play as 
this type of firm accounts for a substantial proportion of 
Community businesses; hence the need to encourage close 
collaboration between these representative associations (at 
both national and Community level) and the EEC. 
The Committee would once again urge the Commission to 
use the means placed at its disposal by the Treaty to avoid 
distortions of intra-Community trade caused by 
neo-protectionist practices on the part of the Member States, 
as these are particularly prejudicial to SMEs. 
2.1.3.2. The Commission and the national authorities 
should help to publicize the progress made on the elimination 
of physical barriers as well as the technical standards 
adopted, in such a way that they are brought to the attention 
of all small and medium-sized businesses in the Community. 
This task could be carried out effectively by the sector's 
representative organizations, in permanent contact with the 
Community and national institutions. The 'Community 
information centres' proposed in the programme could be 
regarded as a first step towards the circulation of the 
information mentioned. The creation of these offices must in 
no case mean that new administrative bodies are set up at 
national level. Existing bodies, some of which need 
reorganization, should instead be used and coordinated more 
effectively. 
(») OJ No C 344, 31. 12. 1985, p. 16. 2.1.3.3. Besides the legislation which the Community 
institutions must adopt to open up public contracts in the 12 
Member States to all EC enterprises, the Commission must 
use the means at its disposal to ensure that the provisions of 
Community Directives, especially those concerning 
information, are applied by national administrations at all 
levels. A survey urgently needs to be carried out on recent 
experiences at national level, along with proposals on how 
the situation might be improved. 
The Committee proposes that the Commission, preferably in 
consultation with the sector's representative organizations, 
study and implement specific measures to encourage greater 
SME participation in public contracts. The Commission, 
together with the Member States, should also ensure that 
small firms have the same opportunities to bid for public 
contracts as large firms. This would require uniform 
definitions of SMEs at Community and/or sectoral level, 
further refined to take account of national characteristics, 
and an effective system for checking on the invitations to 
tender of Member States' authorities. 
Finally, it would be very useful if the Community issued a 
Directive requiring the Member States to publish periodically 
an assessment of the scale of SME participation in public 
contracts. 
2.1.4. Adapting company law 
2.1.4.1. The Committee once again calls for the approval 
of the 'Statute for European Companies' which acts as a basis 
for the setting-up of European companies; this would 
strengthen firms' competitiveness by eliminating barriers to 
the freedom of establishment, facilitating access for SMEs to 
new markets in other Community countries. By the same 
token the Community should approve the creation of a 
European trade mark and take action against international 
trade mark piracy. The costs and charges which the 
registration of a European trade mark or system may involve 
must be within the financial means of even the smallest firms. 
Appropriate measures should also be taken to speed up the 
procedure for obtaining the European patent. 
At the same time, the protection of patents and design rights 
will also have to be improved. 
2.1.5. A sound competitive structure 
2.1.5.1. Much has been done to adapt competition rules 
to the actual situation of SMEs, but it should not be forgotten 
that the existing provisions must be applied strictly, insofar 
as too lax an approach could lead to a distortion of 
31. 8. 87 Official Journal of the European Communities No C 232/63 
competition and of intra-Community trade. Small firms 
would be the first to be hurt by this. 
2.1.5.2. Nor should it be forgotten that there is another 
side to competition policy, namely regulating State financial 
involvement in the business world. Hence the Commission 
should apply Treaty Articles 92 to 94 equally strictly to 
ensure that the measures taken in the various Member States 
to promote SMEs do not clash with each other. 
The Commission should also resubmit its proposal for a 
Regulation on concentration. 
2.1.6. The tax environment 
The Member States are still free to adopt whatever direct 
taxation arrangements they consider most appropriate. 
Accordingly, the national authorities should employ a tax 
system which favours firms. Consideration of the following 
measures, among others, may be recommended: 
— a reduction of tax on profits which are reinvested, 
— depreciation arrangements which enable plants to be 
modernized, 
— a reduction in succession duties in the event of the owner's 
death, provided that continuity of business is ensured, 
— a reduction in tax on the transfer of ownership of firms, 
provided that continuity of business is ensured, 
— tax concessions for investment to be uncoupled from 
concessions for job-creation, 
— tax concessions for the setting-up and transfer of small 
firms, 
— tax concessions for R&D activities, 
— adoption of a harmonized carry-back/carry-forward 
system to maximize the benefits of SME 
investments (J), 
— avoidance of double taxation. 
2.1.7. Improving the social environment of 
SMEs 
2.1.7.1. The Committee approves any measures to 
encourage the social dialogue. For this reason, and to 
(') This proposal was approved by the Committee in its Opinion 
(OJ No C 160, 1. 7. 1985, p. 3) (Rapporteur: Mr Goris). overcome any difficulties, the Commission, assisted by the 
SME and workers' organizations, should ensure that the 
social dialogue which must accompany all Community 
policies is set in motion and that small firms are included. 
Accordingly the Commission will have to bolster — by means 
of information, training and coordination with other policies 
(social, regional, financial, fiscal and sectoral) — the 
flexibility and influence of SME employers' and workers' 
organizations in the industrial negotiation machinery. 
2.1.7.2. Clearly the Commission's excellent initiative is 
intended to cover all types of cooperative, in all sectors, 
whatever their legal form in the legislative systems of the 
different Member States. 
2.2. Flexibility and capitalization as a basis for the creation 
and development of SMEs 
The Committee proposes that this chapter of the 
Commission document (III.2) be entitled 'promotion of the 
creation and development of SMEs'. 
The setting-up of more advice and management centres to 
provide small firms with certain services which are crucial to 
the running of the firm (accounting, taxation, financing, 
technology and innovation, etc.) would help make such firms 
more flexible, efficient and competitive, with a better chance 
of surviving, since all too frequently there is no way for them 
to incorporate these services in their internal structure. 
With this in mind, the Committee proposes that the 
Commission consider a series of supplementary measures 
(e.g. along the lines set out in the proposal for a Council 
Decision COM(86) 785 final) for the creation of these centres 
which should be in contact with bodies associated with the 
firms (e.g. organizations representing SMEs) and be 
sufficiently decentralized to be accessible to the firms furthest 
from the main administrative centres. In this connection 
consideration should be given to fiscal and financial aid 
towards the cost of expert advice, which is a considerable 
burden for small firms. 
2.2.1. Training 
A distinction must be made between the training required by 
the entrepreneurs themselves and that required by their staff. 
In both cases the training must be appropriate to the business 
pursued by the firm and must be basically practical. 
The training of entrepreneurs, be they owners or managers, 
is a key element in the life of SMEs and is in particular need of 
improvement, in accordance with the ILO recommendations 
approved at the conference in June 1986. It must be the 
No C 232/64 Official Journal of the European Communities 31. 8. 87 
cornerstone for the renewal and consolidation of the spirit of 
enterprise of SME owners and managers who are frequently 
inadequately trained or too inexperienced to face the heavy 
responsibility involved nowadays in running an up-to-date 
and efficient small business. 
The training of entrepreneurs should cover all aspects of 
running a business efficiently, calling on appropriate outside 
advice where necessary. The entrepreneur should also be 
encouraged to keep abreast of the advances being made in all 
relevant fields, the new technologies in particular. 
Staff training is a greater burden for SMEs than for large 
firms as the latter have the means to provide in-house 
vocational training, while small firms lack the material 
resources for this and frequently the time needed to attend 
training courses held away from the firm's premises. The 
following measures could be adopted to overcome this 
handicap: 
— increased contact with the competent authorities with a 
view to drawing up vocational training plans in liaison 
with SMEs, and workers, via their representative 
organizations, and geared to their particular needs, 
— increased financial aid for the vocational training of SME 
staff, including the heads of firms and managers, 
extending this training to the spouses of heads where they 
work in the firm, 
— creation of a wide network of training centres so that 
training facilities are within reach of all firms, using 
audiovisual and distance-learning techniques, 
— inclusion of management training for SME owners and 
managers among the priorities of the ESF, 
— consideration of training in new technologies. 
The market in new technologies is dominated by large 
companies which all too frequently offer solutions geared to 
major customers with more capital than SMEs. With a view 
to improving this situation and strengthening the position of 
small firms, it is proposed that additional advisory services 
on technology and innovation be set up to assist SMEs, their 
managers and workforce. 
These advisory services, whose purpose would be to 
reinforce the position of SMEs as customers for and users of 
new technologies, would have the following functions: — to facilitate and increase the exchange of information 
between SMEs (users) and the suppliers of new 
technologies, so as to adapt the requirements of the one to 
the technical possibilities of the other, 
— to provide assistance in selection, evaluation, 
secondment of qualified personnel during installation, 
etc., 
— to boost the training and skills best suited to the 
introduction of new technologies in SMEs, taking into 
account the particular technical, economic and labour 
features of such firms. 
It is a fact that the introduction of new technologies in both 
large and small firms raises many problems of a human, 
labour, social and ecological nature. These must be taken 
into account in the social dialogue, helping to create a climate 
of thorough-going familiarization. This in turn will facilitate 
the social dialogue and the introduction — in the socially and 
economically most favourable manner — of the new 
technologies in small businesses. 
To this end the measures scheduled for 1987 and successive 
years by CEDEFOP in collaboration with the Commission 
(DG V and SME Task Force) urgently need to be reinforced 
and made more efficient, to ensure that they effectively cover 
all aspects of SME training and reach all those involved in 
it. 
Mention should be made here of an initiative taken by the 
Health and Safety Directorate of DG V to set up a training 
and advisory programme on safety and management for 
small firms. 
Measures taken or planned by the Commission, the SME 
Task Force and CEDEFOP for the training of SME managers 
must therefore be effectively coordinated. 
Lastly, in some countries where vocational training is highly 
developed, small firms form a source of skilled staff whose 
experience could be drawn on, passed on and used to the 
full. 
2.2.2. Information 
All measures which help to increase the flow of information 
to firms, together with the training facilities mentioned in the 
preceding section, are the foundation stones for the 
development of small firms. 
2.2.2.1. The Commission's plan to set up 'Community 
information centres' in all the Member States will help to 
31. 8. 87 Official Journal of the European Communities No C 232/65 
provide entrepreneurs with the information which they need. 
The Committee would, however, urge the Commission to be 
more specific on certain points connected with the operation 
of the information centres, for instance: 
— possible linking of the information centres with existing 
information networks in the Member States, e.g. 
'Minitel' in France, 
— connection with SME organizations, 
— level of decentralization within the Member States, 
— body to which they are responsible, 
— composition and training of the advisory staff. 
The Committee proposes that the Community information 
centres channel their activities through existing bodies, such 
as SME organizations, chambers of commerce, trade and 
industry, etc. rather than setting up new organizations. 
Financial considerations, amongst others, make this 
necessary. 
2.2.2.2. The compilation of data on SMEs by the 
Commission should serve to cover the lack of such 
information normally found at national level. It should be 
borne in mind, however, that such a measure will only be 
worthwhile if the benefits which firms receive from it 
outweigh the costs, of whatever kind, incurred in providing 
the information requested. These costs could be reduced if 
the data were demanded not from individual firms but from 
SME organizations. 
The inconsistencies between the NACE nomenclature and 
the statistics on many branches of SME activity should also 
be remedied forthwith. 
2.2.3. Exports 
The measures to promote exports by SMEs should not be 
limited to the markets referred to in the action programme, 
but should give special attention to those regions which offer 
the best untapped opportunities for small firms. 
The Committee agrees that there should be a heavy emphasis 
upon education, training and information in the field of 
exports and that the Commission should encourage the 
sharing of experience between established exporters and new 
or potential exporters. 
Consideration should be given to the scope for establishing a 
Community export-credit insurance company tailored to 
meet the special needs of small businesses. Furthermore, the export promotion measures should be 
accompanied by measures to boost the presence of the EC 
Member States in third countries, basically by encouraging 
investment in commercial and industrial activities in these 
non-member countries. 
2.2.4. Establishment of firms and innovation 
The Commission and the Member States should pay more 
attention to those aspects which help to guarantee the 
continuity of firms. Accordingly, the start-up aid should 
continue throughout the launch period which will be 
determined on a case-by-case basis, depending on the specific 
features of the assisted firm (sector, type of product, 
location, etc.). 
The Commission should encourage university-industry 
cooperation, broadening its base so that it is not confined 
solely to the new technologies. The Commission should also 
examine the possibility of extending the contacts to all 
employer and worker organizations (cf. Comett 
programme). 
Moreover, where desirable, local employment initiatives can 
and must link in with start-up and innovation programmes 
for small firms (cf. Elise programme). 
The Committee urges the Commission to continue 
developing Community R&D policy and facilitating access 
to research contracts for SMEs. 
The Committee considers that SME participation in the 
Community Esprit, Brite and Race programmes is still small 
and that the Commission should therefore find ways to 
increase it. 
Nor should the new know-how and technological training 
which comes from involvement in this type of programme 
remain the exclusive preserve of the participating firms. 
Hence the Commission will have to set up, together with the 
SME organizations, and through the Community 
Information Centres, a proper programme for publicizing 
the technical findings derived from these programmes. 
The Committee recommends that the Member States ratify 
the European Patent Convention and urges the Commission 
to ensure that it enters into force according to the schedule 
laid down in the White Paper on completing the internal 
market. 
2.2.5. SMEs and regional development 
Community measures will have to be prepared and 
implemented with the help and cooperation, where 
appropriate, of the local and regional authorities, who have 
the best knowledge of the problems of their particular 
area. 
No C 232/66 Official Journal of the European Communities 31. 8. 87 
The Commission is also urged to encourage ERDF 
participation in productive investment in all sectors of SME 
activity (industry, commerce, crafts, tourism and services) 
rather than in infrastructure projects. 
2.2.6. Capitalization 
This title in the Commission's action programme would be 
better phrased as 'Investment funding facilities'. 
The national administrations and competent Community 
bodies should ensure that SMEs obtain loans on better terms 
than those available on the capital market. EIB and NCI 
measures contribute towards this and should therefore be 
reinforced. A thorough study should be made of the 
operation of the NCI as difficulties are being encountered in 
some Member States, due to the rise in final interest rates 
which the channelling of credits to SMEs via the financial 
institutions involves. 
Most small firms do not have sufficient capital of their own, 
which places them at a disadvantage when they have to 
contract loans, arrange lines of credit, provide guarantees, 
etc. Greater access to venture capital is therefore of vital 
importance for small firms since they cannot raise capital by 
issuing shares because they do not generally have the legal 
form of a joint-stock company. Furthermore, they frequently 
hesitate to increase their guarantee capital from outside 
sources as the ensuing influence of the third party on the 
management of the firm often leads to conflict. An 
appropriate means of providing venture capital is therefore 
through equity investment companies set up specifically for 
this purpose, such as were created in the sixties in Belgium, 
Denmark, Italy and Germany, in some cases at regional level, 
with the participation of savings banks and banks. As a rule 
these financial institutions provide funds for a specific period 
— generally 10 years — and take a 35 to 49 % holding in the 
firm as 'sleeping partners'. Small firms prefer this type of 
sleeping partnership as they preserve their complete 
independence. 
Besides providing venture capital, these equity investment 
companies often provide special advisory services, including 
advice on tax matters, and other services in such fields as 
factoring and leasing. They can also act as intermediaries in 
finding partners for SMEs, even in other Member States. 
Done at Brussels, 1 July 1987. The Committee welcomes the Commission's intention of 
developing venture capital operations at European level and 
stresses the urgency and importance of this. 
One way of resolving the problem of SME funding is to 
provide them with access to the capital market. In this 
connection, the creation of 'secondary markets' such as exist 
in some European countries could provide a solution. The 
Commission should study ways of extending this 
arrangement to all the capital markets of the Member 
States. 
Community and national institutions should also be 
encouraged to act as secondary guarantors for those firms 
which lack guarantees. 
The Committee proposes that the Commission consider two 
new facilities for providing financial aid for small businesses. 
Firstly, the creation of a line of finance to cover interest rate 
differentials, backed by tax reductions, where firms cannot 
obtain preferential terms. Secondly, the setting-up of 
reciprocal guarantee companies at Community level which 
would participate in the capitalization of firms. 
The Committee urges the Commission and the EIB to ensure 
that, when NCI IV is implemented, the innovation incentives 
on which the 'Community investment loans' were based 
operate effectively. 
Last but not least, it is clear that in many instances the ERDF 
and ESF are not geared to helping small firms, and should be 
revised as a matter of urgency so that SMEs have effective 
access to these funds without incurring the heavy costs and 
risks encountered at present. The key problem is the total 
incongruity between the short time available for preparing an 
(expensive) application for project assistance and the time 
taken to grant it, almost always after the project has actually 
got underway. 
Finally, in the context of measures under the European 
Development Fund and the strengthening of the Lome 
Convention, cooperation and contact between Community 
and ACP small firms needs to be stepped up. 
The Community's small firms must be given every incentive 
to invest in the ACP States, whether through direct 
investment or joint ventures. 
The Chairman 
of the Economic and Social Committee 
Alfons MARGOT