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DOCUMENTS "COM"
COM(81)638
Vol.1981/0192

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)638 final
I /
I Brussels,23October1981
Mandateof30may1980:
JOBCREATION :PRIORITIES FORCOMMUNITY ACTION
*ii;
(Communication fromtheCommission totheCouncil)
X­./
;v\V
C0M(81)638final

τ
1
COM632
'JOBCREATION :PRIORITIES FORCOMMUNITY ACTION
1.'Theobjectofthepresentcommunication istodefine,inthe
context ,ofthe30thMayMandatereport,^the priorities
forstimulating thecreationofemployment whichshouldguide
theCommunity andMemberStates. ;'
2.The.promotionofemploymentwillflowfirstandforemostfrom
therestoration ofeconomicgrowthintheCommunity.Policies
toachievethisobjective mustbecastwithinanoverallsocio­
economicstrategyasdefinedintheCommission'sCommunication
to"theJointCouncilofMinistersofEmployment ,Financeand
/• -SocialAffairs,(1)andinitsforewordtothe5thMediumTerm
EconomicProgramme (2).Inthisconnection theCommissionrecalls
alsoitsproposalsonregionalpolicy(3)industrial .policy(4)and' ■
iruaovatio^]inparticularthoseelementsrelatingtothecreationofemploy­
ment.TheCommissionwillaid..thoseeffortsbyMemberStateswhichcorrespond
toagreedCommunityobjectives.
3.ItisamajorobjectiveoftheCommunitytoreturntoasatis­
factorylevelofemployment ,onalong-termbasis.Thisrequires
thatEuropeanindustrymaintainitscompetitive positionin
worldmarketsbymeansofincreasedproductiveinvestment and
lowerproductioncosts.ItalsorequirestheCommunitytoreduce •
'itsdependance onimportedenergy.TheCommissionhasalsoemphasis
edtheneedto: '.
-developcounter^inflationarymeasuresinamannermostlikely
tofavoureconomicrecoveryandemployment growth;
-adaptmethodsandformsofpublicexpenditure inareasaffecting
employmentwithaviewtostimulating the*processofjobcreation;
(l)Prohlemofunemployment :PointsforexaminationC0M(8l)l54 «
(2)Draftofthe5thMedium–TermEconomicPolicyProgrammeC0M(8l)344final.
(3)Newregionalguidelinesandpriorities–C0M(8l)l52. 1
(4)TodevelopindustryinEurope–ACommunitystrategy-COM
(5)-Outlineprogrammeforindustrialinnovation-C0M(8l)620.
-2-

-promote greater flexibility inboth the productive base and
the labour market ;
-establish asocial consensus and the full participation of
all parties conoerned ,inpartioular through dialogue with the
Social Partners .
Common policies onindustrial innovation and restructuring must
bereinforced inorder toexploit the single Community market
more fully and tostimulate the development across the Community
ofnew areas ofeconomic growth .The Commission will make separate
proposals tothe Council inthis respect .
Inparallel ,the work undertaken atCommunity level onthe reorgan
isation ofworking time ,which takes account ofthe pressures
tomaintain compet itivity ,can also contribute tothe objective
ofcreating employment ,and should bepursued with the aim of
establishing aCommunity framework for negotiations within Member
States .
The Commission proposes inthe framework vofthe 30May Mandate
touse the various Community financial instruments directly
insupport ofthese objectives .The Community 'slimited resources
cannot meet all needs and should therefore bechannelled into
specific areas for action ofcommon concern .The Community should
aim tostimulate innovation and contribute topolicy development
inMember States aswell aspromote economic convergence within
the Community . /
This communication suggests aseries ofinterventions intwo
broad areas ofpolitical priority : ,
-the problem ofyouth unemployment and the transition from
education toadult working life ;
-the employment potential ofsmall and medium-sized enterprises ,
including the contribution ofnew technologies ;

(a)Anemployment policy for the young .
8.The highest priority must bethe young .The general employment .
crisis isheightened by ,the arrival onthe labour market of
unusually large numbers ofyoung people ,for demographic reasons ,
atthe depth ofthe re-cession inthe Community ^The result is
anappalling level ofunemployment amongst young people under
25 .There isagreement atall levels ofsociety that solutions
* ' * .
must befound .Atthe same time ,itwill also benecessary to
cater ,onalarger scale than hitherto for other dissadvantaged
.. groups for the handicapped and the longrterm unemployed ,in
particular . ^ .
9. The Commission suggests atwo-part approach tothe problems
ofthe young .Unemployment among the 16-18 age group inparticular
isareflection ofthe inadequacies and inequalities ofexisting
provisions for providing young people with anadequate socsial
and vocational preparation for adult life .The underlying problems
facing young people attempting tofind a,role inthe labour
market were largely disguised during the period ofeconomic
growth ,when even the more dissadvantaged groups were able to
get jobs and change jobs frequently ,thereby gathering experience
ofworking life "from within ".Until now the great proportion
ofspecial measures for young people have been designed with
aview toproviding asubstitute for employment and employment -
based training .There are ,nevertheless ,increasing pressures
within Member States toestablish amore coherent strategy for
16-18 year olds . '
10.Drawing onthe experience ofexisting Community programmes in
the area oftransition from education toworking life and training
by 'alternance ',the Commission has already suggested inits
Communication tothe Joint Council ,that comprehensive pro­
vision should bemade available toall young people during the
twoyear period after the end ofcompulsory -schooling ."The Comm­
unity through itsfinancial instruments will support thedevelop­
ment ofthis Medium term strategy and should set itself the
objective ofensuring that within 5years every young person

under the age of 13_inthe Community isguaranteed eduoation ,
training orwork experience asanalternative tounemployment .
Over the age of18,young people may still need tobenefit from
specific measures toimprove their employment opportunities ,
but the emphasis atthis point should beoffacilitating entry
into the labour market rather than onproviding apreparation
for entry .For anumber ofyears the greatest pressure for action
isgoing toarise inthis age group .Part ofthe Social Fund
isalready devoted tosupport initiatives inthis area .However ,
increasing the possibility ofintervention toaid the creation
ofawide range ofjobs for the 19to25age group must begiven
greater emphasis . !
!
5'•• •
{
Forsuch intervention tobeeffective theCommission will urge
and help Member States tobetter identify and analyse the obstacles
ttothe creation ofemployment which dovary from country to
' •Icountry . »
\
There isawide range ofmeasures available to|heCommission
toassist theentry intoworking lifeofthisa^egroup .The
Commission would wish toconsider inter alia :
-selective recruitment subsidies ?
i
-forms ofmanaging working time {
1
-training facilities leading tothe encouragement ofentre­
preneurial activities ' ']
-,assisting those schemes atpresent inoperation inMember
I
States whether public orprivate designed tocreate employment .

(b)Employment potential ofsmall and meMium-siz edenterprises
Innovation and new technologies *
12.The Commission reported tothe Joint Council ofEconomic ,
Social and Finance Ministers that itwould beseeking ways to
support the spread ofinnovative capacity and enterprise through­
out the social fabric :"There isconsiderable potential inthe
development ofsmall-scale job creation ,mainly insmall and
medium-sized firms ,but also inco-operatives and anarray of
initiatives atthe local level ,and the conditions for the success
ofsuch actions should beexamined and encouraged ."
t
13.This confidence flows from earlier reports showing the scale
ofsmall ormedium-sized enterprises (SMEs )inthe Community
(two thirds ofthe Community 'sworkforce outside agriculture
and public administration )and their increasing role (3)(4).
The potential for job-creation through asignificant expansion
ofthis sector isthus very great .The Community isalready
assisting this process via its loan mechanisms particularly
bythe increasing use ofglobal loans .The use ofthe regional
fund isalso being further developed inthis regard .
14.Itisalso clear from this work that the inherent advantages
ofSMEs (flexibility and readiness toinnovate )and the
contribution they can make tocreating employment ,are often
neutralised bytheir lack ofexpertise inareas ofknowledge
beyond their natural horizons ,their lack ofstatus with tTie
financial institutions and difficulties inexploiting government
contract and export markets .Moreover ,the tendency for traditional
large-scale enterprise tobereplaced bysmaller ones creates
aneed for more entrepreneurs toexploit local potential in
/ .setting upand guiding small businesses ,either onaconventiona ■
basis ,orthrough alternative forms ,such ascooperatives and
Community based industries .
(3)"Report onsome structural aspects ofgrowth "COM (78)255
(4)"Small andmedium-sized .enterprises intheCommunity "COM (80)
-6-

The physical needs ofsmall businesses interms ofsize ,cost and
location ofpremises are different from larger enterprises and involve
anew approach toland allooation ,use ofbuildings ,and provision
ofinfrastructure .Inthe present crisis the desire tofind looal
solutions isoften strongly evident :what isneeded isboth the capital
and the "software "inthe terms ofexpertise todothe job .
15.Inprinciple the revolution ininformation systems means that
many ofthe advantages oflarge-scale integrated operations
will inthe future beavailable tosmall independent enterprises :
thus computing ,data storage and retrieval ,market information
and analysis ,design financial and accounting services ofa
high standard should become generally available .Inpractice
there are major lags inthe distribution ofthis expertise ,
not only through financing problems ,but also insufficient pre­
paration ofbusinesses and their managers ,fear ofsocial
consequences ,and sometimes the absence ofassociated services
(access tosoftware companies ).
16.The Commission accordingly suggests :
(i)National and local authorities have animportant role toplay
inensuring that sufficient public and private investment takes
place toprovide the physical conditions and aninfrastructure
for job-creation through new business .The financial instruments
ofthe Community will give priority tofinancing preliminary
investment atthe local level with this objective (5).
(ii).Improv ing the access ofsmall business tofinance for expansion
and innovation .The problem here has already been stated :
"Tosafeguard and stimulate investment which isthinly spread ,
ofrestricted scale and involves ahigh risk ". (4)
(5)Proposal for aregulation ofthe council amending Regulation
•(EEC )No.724/75establishing aREGIONAL EUROPEAN DEVELOPMENT FUND
I
COM (81)589 Final .
-7-

Much progress has been made inreducing the minimum size ofloans
from the Community institutions :but financial problems remain ,both
where theinfrastructure costs ofdeveloping small business arehigh ,
andwhere the private banking sector have nodifficulty inplacing
funds with' "blue chip "companies .The Commission will pursue its
earlier proposals for stimulating interest among financial institutions
"inSMEs . ...
•(iii)A programme toencourage dissemination ofthenewtechnologies ,
especially among SME .The programme should permit financing .
training courses ,orinitiation courses ,access tosoftware
companies ,investment insmall-scale information equipment and
possibly assistance toworkers during periods ofre-adaptation .
(iv)-Provision oftechnical and marketing services :the provision
oftechnical services has been largely covered above .Inthe
marketing sphere ,provision should bemade toencourage the
establishement ofservice companies which offer market research
and agency services tosmall industries toencourage exports
,both within the Community and outside .
(v)-Encouraging abetter appreciation ofthe process ofdeveloping
new enterprises .Some training has already been undertaken of
people starting newventures (6):this should bfmore widely
available andshould extend tostaff ofco-operatives ,community
industries andlocal development agencies' ,asw^ll asentrepreneur
and managers ofsmall firms . *
Conclusions
17*There isanurgent need toimprove the process ofcreating emplo
ment inthe Community ,and -action shall bedirected totheprior
ities outlined here .The Commission will alter the emphasis
ofthe instruments under its control atthe earliest opportunity
sothat astart can bemade .Much needs tobedone atevery
level inthe Community .
(6)CEDEFOP :Role oftraining insetting upnew economic and "
\social activities :1980 . ,
-8-tresearch
exports
eveloping
taken of
widely
,community
entrepreneurs
ating employ -
othe prior -

Itwill benecessary tobear inmind ,aspolicy and practice
develops ,the need : ,
toprovide atall levels ,inMember States ,the finanoial
resources necessary tosupport the job creation process ;
the Social Fund will have to-be strengthened inthis respect ;
toencourage the development ofaprogramme approach in
Member States -and tointroduce itinthe Community instru - ,
ments ,with aview also toimprove the efficiency ofthe
' ^
training and labour market systems ;
todevelop aregional perspective injob creation policy ,
which takes account both ofthe need toconcentrate resources
and initiatives indisadvantaged regions ,including those
where major closures oftraditional industries are taking
place - ;and the desirability of
supporting ,throughout the Community ,technical orsocial
innovation ;
toinvolve the social partners and draw ontheir experience ;
for continuing monitoring and analysis ofthe measures
which are adopted ;
toenable theexisting funds tofinance aswider range of
measures working toanagreed objective ;|
topromote integrated operations atlocator regional level
through acombination ofCommunity instruments .
*
'»1  
1 "• *