Opinion of the Committee of the Regions on

- the "Communication from the Commission - Challenges for enterprise policy in the knowledge-driven economy", and

- the "Proposal for a Council Decision on a Multiannual Programme for Enterprise and Entrepreneurship (2001-2005)"

(2001/C 22/04)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission entitled "Challenges for enterprise policy in the knowledge-driven economy" and the Proposal for a Council Decision on a Multiannual Programme for Enterprise and Entrepreneurship (2001-2005), COM(2000) 256 final - 2000/0107 (CNS);

having regard to the decision taken by the Council on 31 May 2000, under the first paragraph of Article 265 of the Treaty establishing the European Community, to consult the Committee of the Regions on this matter;

having regard to the decision taken by its Bureau on 2 June 1999, to draw up an opinion on this matter and to instruct Commission 6 for Employment, Economic Policy, Single Market, Industry and SMEs to undertake the preparatory work;

having regard to the draft opinion (CdR 185/2000 rev. 1) unanimously adopted by Commission 6 on 30 June 2000 (rapporteur: Mr Jensen, DK, PES),

adopted the following opinion unanimously at its 35th plenary session, held on 20 and 21 September 2000 (meeting of 21 September).

1. The Committee of the Regions position on the Communication and the proposal for a multiannual programme

1.1. The Committee of the Regions generally regards the Communication from the Commission - Challenges for enterprise policy in the knowledge-driven economy and proposal for a Council Decision on a multiannual programme for enterprise and entrepreneurship (2001-2005) - as a visionary and constructive contribution towards the renewal and refocusing of EU enterprise policy.

1.2. The Committee endorses the Commission's analysis of the challenges that the EU will have to face in the form of globalisation and the new knowledge-driven economy. In its view, coordinated action by the Member States - involving their local and regional authorities - will have a greater impact than purely national initiatives.

1.3. In this connection, the Committee feels that the aspects and implications of the new knowledge-driven economy for regions and local bodies would seem to necessitate further study. Such studies have been carried out in many Member States and shown that this new economy impacts on regional and local economies and society in several different ways.

1.4. The Committee agrees with the Commission that EU enterprise policy and the related programmes must be refocused in order to attain the EU's ambitious new strategical objectives decided by the heads of state and government at the European Council meeting in Lisbon, viz. to become the most competitive and dynamic knowledge-driven economy in the world. An economy which can create sustainable growth with more and better jobs and greater social cohesion, realising President Prodi's vision of "Enterprise Europe".

1.5. The Committee assumes that this sustainable growth will encompass sustainable growth for, and in, the regions. In this respect, the Committee points out that regional and local authorities enjoy special relationships with business leaders and the social partners.

1.6. The Committee welcomes and agrees in the conclusions given by the European Council meeting in Lisbon regarding the interdependence of the new knowledge-driven economy and the welfare society but does not feel that this message is adequately reflected in the Commission's Communication or the proposed multi-annual programme. Social security systems must be adapted to the new, knowledge driven economy so as to both promote entrepreneurship and self-employment and meet the interests of the workforce.

1.7. In addition, the Committee observes that the Commission has not given much thought to the place of local and regional authorities in the new knowledge-driven economy, and hence to their contribution in framing solutions to the challenges the EU is facing from globalisation and this new economic scenario. It is an established fact that in many Member States the devolved authorities play a key role in undertaking public welfare responsibilities. These authorities therefore expect to be assigned a central place in the transition to the new knowledge-based economy. Further, local and regional authorities in the Member States - often on a voluntary basis - pursue an enterprise policy with a view to creating an optimal framework for entrepreneurs and enterprises, thereby promoting local growth and employment. The Committee therefore feels that it is important to give these authorities a formal role in EU enterprise policy and in the multi-annual programme so that the experiences gleaned at this level can be exploited in a broader context.

1.8. The Committee finds it surprising that the Commission's Communication "Acting Locally for Employment. A Local Dimension for the European Employment Strategy"(1) recognises the importance of the local and regional dimension in employment and enterprise policy yet that is not the case in the present Communication and proposed multi-annual programme.

1.9. The Committee regrets that the local and regional authorities have not been assigned a formal role in the new open coordination - "BEST procedure" - methodology. This is strange since the conclusions of the European Council meeting in Lisbon made it clear that this procedure should embrace all levels. For purposes of drawing enterprise into the public sector, it would be normal to involve the local and regional authorities in both the development and implementation of the benchmarking methodology. In the Committee's view, one major factor on which the benchmarking process could focus would be ways in which the impact of enterprise policy is influenced by the apportionment of public and private sector entrepreneurial tasks and the division of work between different public sector players, including the regional authorities.

1.10. The Committee is waiting, with great expectations, for the Commission to prepare a White Paper on governance by summer 2001, in which it will, for instance, spell out how local and regional authorities can play a greater part in European action. In the Committee's view, the Commission should preferably already at this stage incorporate this approach into the Communication and the multi-annual programme so that the local and regional authorities are assigned institutional status in EU enterprise policy.

1.11. The Committee feels that the framing of a new EU enterprise policy addressed to all enterprises, regardless of size, sector or situation, opens up many perspectives. In its view, this innovation, in tandem with the new Enterprise DG, will result in a new and improved political and structural framework for EU enterprise policy.

1.12. As regards the dynamic, innovative entrepreneurial climate which is one of the Commission's targets, the Committee feels that the Commission places too great an emphasis on the research dimension in relation to the general education and training system. Experience has shown that enterprises in the knowledge-driven economy tend to form geographical clusters, especially around university towns; hence investment in the research dimension alone can have a number of direct repercussions for regional economies.

1.13. Generally, the Committee finds it hard to take a stand on a multi-annual programme to promote enterprise and entrepreneurship in Europe which is expressed in as broad terms as in the present case, such as its failure to differentiate between company type and size, which assumes they all operate in a similar way in the new knowledge-driven economy.

1.14. Though the Committee recognises that the prerequisite for promoting enterprise and entrepreneurship in Europe shift over the years, it would seem advisable that the first year's initiatives, at any rate, should be set out in a more detailed programme. The Committee accepts that the new multi-annual programme focuses mainly on strategy development and broad activities - even if that is not entirely compatible with the "think small first" principle.

1.15. Basically the Committee feels that one prerequisite in achieving "Enterprise Europe" is for the Commission to take account of the workings of the new knowledge-driven economy. One trend in this new economy has been for innovation and production to be increasingly concentrated in regional clusters, or centres of excellence. These clusters are characterised by extensive internal cooperation, along with competition for highly skilled labour, etc. The combination of cooperation and competition generates dynamic, competitive regions which act as magnets in attracting both entrepreneurs and established enterprises. This trend has several obvious implications for regional economies besides contributing specific regional facets to enterprise and entrepreneurial policy.

1.16. The Committee feels that EU enterprise and entrepreneurial policy should take greater account of the fact that success will hinge on the capacity for multidisciplinary cooperation and to establish partnerships and physical or virtual networks with entrepreneurs and enterprises in other regions and introducing and responding to new technologies. These networks will often have a definite regional dimension on account of inter-regional alliances which can supplement and support the region's knowledge base in particular areas of expertise. The image of the single inventor, artisan or engineer as founder of Europe's new enterprises will hardly hold good in the years to come. Future entrepreneurs and enterprises will increasingly organise physical or virtual networks in which the capacity for regional cooperation and organisation is vital for success.

1.17. The Committee generally considers that, in framing strategy in this sphere, there is great need for a more detailed study of this new knowledge-driven economy, with particular emphasis on highlighting this economy's regional aspects and impact in Europe.

2. Committee of the Regions recommendations regarding the Communication and the proposal for a multi-annual programme

2.1. The Committee calls on the Commission to give greater consideration in its Communication and the multi-annual programme to the interdependence of the new knowledge-driven economy and the welfare society, including the local and regional authorities' place and role in the welfare society.

2.2. The Committee of the Regions recommends that the Commission work towards a comprehensive, cross-functional local development policy.

The Committee specifically urges the Commission to involve the local and regional authorities more closely in the knowledge-driven economy in accordance with the principle of subsidiarity, and hence in framing solutions to the challenges facing the EU as a result of globalisation and this new economy. This approach should preferably encompass both these authorities' role in developing enterprise policy, including methodology and action, and the implementation of the specific projects in the multi-annual programme. In the Committee's view, this could be achieved through new forms of partnership and cooperation between the various interests and levels of authority in Europe.

2.3. The Committee requests the Commission to take account of the structure of enterprise policy and the way responsibility for it is divided up in the individual Member States and of the responsibilities shouldered by local and regional authorities for enterprise policy. It specifically urges the Commission to draw up a Communication setting out the local and regional authorities' role and tasks in the sphere of enterprise policy, and hence underlining the importance of a local and regional dimension in enterprise and entrepreneurial policy. In this connection the Commission can constructively draw on its experiences in the field of employment.

2.4. The Committee calls on the Commission to draw up more detailed work programmes so that the current highly abstract, multi-annual programme can be broken down into more operational terms. The Committee feels that it is important to stress that these specific activities should take account of the political and administrative structures of the individual countries.

2.5. The Committee urges the Commission, for the purpose of developing its strategy in this sphere, to study the regional aspects and impact of the new knowledge-driven economy in greater depth. In the Committee's view, there are some obvious regional facets to the new knowledge-driven economy; it therefore calls on the Commission to frame and prioritise entrepreneurship projects with a clearly regional and local dimension, i.e. those which take account of the tendency of enterprises in the new knowledge-driven economy to concentrate in regional clusters. For instance it could be necessary at EU level to provide greater support for regional centres of excellence or virtual education and training facilities, to counterbalance regional concentration. It will therefore be necessary to encourage the creation of networks of excellence and make it easier for less favoured regions to join these networks.

2.6. The Committee urges the Commission to involve local and regional authorities in framing and implementing the "Best Procedure" methodology. The Committee specifically encourages the Commission to examine more closely, as part of its benchmarking exercise, ways in which the impact of enterprise policy is influenced by the apportionment of tasks between private and public entrepreneurs and the division of work between public authorities. It will then be possible to ascertain which tasks are best catered for by the private and public (including the regional authorities) sectors respectively in the sphere of enterprise policy.

2.7. Lastly, the Committee of the Regions recommends that it be consulted on the relevant sections of the annual work programmes, the mid-term evaluation in 2003 and the final evaluation report.

Brussels, 21 September 2000.

The President

of the Committee of the Regions

Jos Chabert

(1) COM(2000) 196 final.