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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)726 final
Βγ 1980
Qy -y.
SMALL AND MEDIUM-SIZED ENTERPRISES INTHE COMMUNITY
(Communication bytheCommission totheEuropean Parliament )
C0M(80 )726 final

I. INTRODUCTION
1.Small andmedium-sized enterprises arenotonly anessential
component oftheindustrial andcommercial structure ofthe
Community butalso andabove allasource ofvigour anddrive in
theCommunity economy .Thepresent crisis hashighlighted their '
importance asproviders ofemployment andsources ofinnovation ,
buthas atthesame time exposed their vulnerability toshort -
term fluctuations intheeconomy (1). .
This iswhy those responsible forframing therelevant policies
must bear inmind thespecific features peculiar tothis sector
andmany national andCommunity agencies have infact been
studying thespecial situation ofsmall business .TheCommission
itself ,initsvarious proposals ,has tried totake account of
theproblems theSMEhave tocontend with because oftheir
limited size ;but these efforts have been uncoordinated and have
.notsofarbeen properly dovetailed into anoverall framework ..
Parliament drew theCommission 'sattention tothis inthe "
Resolution (2)which itadopted following the "Report on
questions relating tosmall and'medium-sized undertakings inthe
Community "(3);theCommission' sreply (4)provided thebasis for
adialogue between thetwoInstitutions .
2.Aspart ofthis dialogue ,theCommission feels that thework
being done intheCommunity tohelp theSMEshould bereviewed at
regular intervals ,and that theconclusions drawn should beused
toprovide material forCommunity initiatives .
(1)"Report onsome structural aspects ofgrowth COM(78)255 ,22.6.78 .
(2)Doc .220/78,20.2.78 ,'
<3)Doc .518/77 -/
(4)COM(78 )137final ,4.4.78 -

-2-
Since this isthefirst report ofitskind ,theCommission -
introduces itbydefining thegeneral framework ,both
institutional andeconomic ,inwhich theCommunity action as
distinct from national measures should besetandstating the
criteria andobjectives which Community action will serve .In
this context theCommission will indicate ,among thesteps the
Community could andshould adopt ,those itthinks should carry
priority andwhich itintends to.examine more thoroughly inthe
course of1981 .
II.FRAMEWORK FORCOMMUNITY ACTION
3.Small andmedium-sized enterprises operate atalevel remote from
that oftheCommunity authorities ,andthis constitutes a
considerable hindrance toCommunity action .
This obvious fact suggests that agreat deal will depend onthe
methods theCommunity uses initsapproach totheproblems
specific totheSME .
What theCommunity must doisidentify thespecial characteristics
oftheSMEandtheobstacles they have toovercome .Taking
suitable measures will bethetask ofthose agencies best
equipped toimplement them .These agencies operate atvarious
levels (local ,regional ,national orCommunity ).
4.Small andmedium-sized enterprises ,because oftheir number and
diversity aswell astheir presence inallsectors ofproduction
anddistribution ofgoods andservices ,form thematrix ofthe
Community 'seconomy .Thesalient features ofthis multitude of
business units aretheir unceasing development andconstant
renewal .Among them ,theSMEs indistribution -wholesale and
' retail trade -are inaspecial andimportant position asthey
account for noless than 70% ofthe total turnover ofthis
sector .
5.Theindustrial system cannot work soundly unless thefirms making
itupcancompete -forunless they arecompetitive ,theeconomy
canneither grow norchange .Although theability tocompete is
expressed interms ofproducts ,itisanchored inproduction
structures ,changes inwhich areofgreat importance .

Thecompetitiveness oftheSMEmparticular isfounded onmany
factors :human ,social ,legal ,economic andtechnical ;these all
contribute -nowasinthepast -totheadjustment ofthe
production mechanism tonewconditions intheeconomic andsocial
environment .
Atregional orlocal level theconcentration ofthese factors can
provide theright conditions for theestablishment anddevelop­
ment ofsmall andmedium-sized enterprises .And thepooling of\
thetechnical ,financial ormanagement interests atthis level of
groups ofSMEcangive them sufficient competitive muscle to -
stand uptolarger competitors .Inthedistributive sector ,the
need tocompete with bigcompanies has led toconcentration in
theretail trade and tothecreation ofjoint purchasing organi­
sations andother forms ofcooperation ,sothat theSMEhave
successfully weathered aperiod ofmajor structural change .
There also seems tobearecent general tendency intheCommunity
towards deconcentration offirms ,and this natural movement has
meant that thegrowth ofbigcompanies hasbeen slower while the
number ofsmall firms -notallcompletely independent -has
increased sharply .This tendency isbeing encouraged inmany
industries bytechnological progress ,which often results inthe
creation ofnew SME .
Small andmedium-sized enterprises thus represent afactor of
growing importance intheCommunity economy intheface of
changing markets ,inparticular because ,they represent 'a
potential source ofnewjobs . s
Itis,however ,noeasy matter fortheauthorities tobuild upa
dialogue with -oreven identify -thesmall andmedium-sized
industrial enterprises .Thevery qualities that give them their
vitality areatthesame time abarrier toanydetailed ,
objective andcomposite evaluation oftheir characteristics and <
theproblems peculiar tothem .Thesituation isdifferent for
SMEinthedistributive sector ,owing tothesector 'sgreater
homogeneity and thegreater similarity ofthe -problems retail ,and
wholesale traders have tocontend with .

-A-
This difficulty iscompounded byaterminology which infact
conceals abroad range ofheterogeneous structures .Indeed ,
whatever thepoint ofview taken ,itisclear that the "problems
ofsmall business "areperceived very differently bythevarious
types ofenterprise ,which inturn vary from country tocountry
- Afirm with 25employees buthighly capital intensive can
hardly becompared with anenterprise with astaff of900
butrelatively little equipment .
- Firms employing fewer than 20people aregenerally not
included innational statistics .
Asithappens many recently-formed enterprises ,especially
those created toexploit new technologies ,are inthis
class .
- Alongside thegenuinely independent SME ,there isalarge
number offirms which have themarks ofindependent manage­
ment butwhich are infact linked tolarge enterprises via
subcontracting invarying degrees ofcloseness from country
tocountry .Thus ,there are fewer independent firms inthe
Community than thestatistics suggest .
This iswhymeasures tostimulate growth through small and
medium-sized enterprises aremore difficult toframe andapply
than arethetraditional kinds ofpolicy .

9.Experience "shows that themost effective wayofsupporting the
SMEistoencourage them tohelp themselves .Respect for the'
independence ofentrepreneurs isessential because itisan
attribute towhich they arestrongly attached and isthesource
oftheir peculiar dynamism .Support ofthis kind constitutes at
.thesame time themain guarantee that official action will be
effective because itinduces entrepreneurs toshare responsi­
bility foritssuccess .
10.Ontheother hand ,thetraditional types ofSME ,being small ,are
highly ,sensitive to .local conditions -geographical ,cultural ,
economic ,commercial andsocial -asthese affect their interests
andproblems .This feature makes them avital tool ofregional
development .Small retail andwholesale firms areeven more'
sensitive tolocal conditions than other SME ,and their
development hasbeen directly influenced bytheurbanisation of
society and thedrift from theland .
At:thesame time their restricted field ofaction puts many
difficulties ,both managerial andcommercial ,inthe .wayof
expansion bythemost dynamic SMEoutside their local area .
11.These various factors explain thescale ,diversity andfrequency
ofaction bymember governments tosupport theSME inageneral .
wayasaclass ofbusiness andmore particularly inthedifferent
fields mentioned intheEuropean Parliament 'sreport (1).
They also constitute abar toanycentralised effort tosupport
theSME ;inthecase oftheCommunity ,acentralised effort would
notonly beblocked byinsurmountable methodological barriers but
would also beall tooinefficient because theSMEoperate ata
level soremote from theCommunity agencies .These circums-tances
inthemselves define thenatural limitations OnCommunity action .
(1)'Report onquestions relating tosmall andmedium-sized undertakings
intheCommunity ",opcit . :

-6-
12.Nevertheless ,theCommunity level offers thepossibility of
listing comprehensively thevarious measures undertaken at
national level (1);theCommission ought totake advantage of
this situation tocarry out acomparative study oftheexperience
gained bythose authorities andagencies which have been imple­
menting such measures .This will entail contacts notonly with
thenational departments concerned butalso andabove allwith the
beneficiaries with aview toin-depth' analysis oftheeffects and
,particularly theeffectiveness ofsupport measures for theSME .
Thefirst aimofthis analysis would betocompare experience
gained inthevarious countries andespecially toinform all
those concerned ofwhat ishappening elsewhere ;but this analysis
andexchange ofinformation should also encourage relevant
organisations intheMember States ,whether governmental ,semi-
governmental orprivate ,toadopt measures whose results have
been found satisfactory inanother Member State while adapting
them totheir ownlocal orregional situations .Such astudy
could also point toappropriate specific measures tobetaken by
theCommunity .
Intheview oftheCommission ,theaimoftheexercise would be
toenhance theefficiency ofinstruments employed bytheMember
States -not toharmonise them .For thestudy itself tobe
effective ,theresources committed tocarrying itoutmust take
!
account ofthediversity andcomplexity ofthesector tobe
supported and thewide range ofmeasures being taken tohelp it.
13.Given theabove ,theCommission believes that action bythe
,Community itself should have atwo-fold thrust .
- Inthecontext ofproviding theright environment and
overall support for thework oftheSME ,whether through
thepolicies ,theprogrammes ortheinstruments forged and
managed atCommunity level ,itisimportant that those
preparing themeasures should study carefully theactual
structures which theCommunity action isintended to
influence .
(1)"Report onsome structural aspects ofgrowth ",opcit .Chapter II,
para 9andChapter III ,para 24.

-7-
- While respecting theprinciple 'sof"subsidiarity ,and
"complementarity "vis-a-visthemeasures taken bytheMember
* States ,specific Community action tosupport theSMEmaybe .
taken totheextent .that economic logic andtheinstitutional
' framework allow ofthis .
Whatever ,thetype ofaction proposed ,itcanonly be
effective iftheright structures -with their own
instruments -ensure aproper link-up between theCommunity
andthefirms ,atnational and,particularly ,regional
level .
Similarly ,theCommission considers that inthecontext of
economic relations ,with non-Community countries greater
emphasis should belaidonmeasures which help small and
medium-sized enterprises tofind foreign markets andsources
ofsupply .• .N
14.,Thisdouble thrust ofCommunity action tosupport theSMEis
fully inaccord with theoutline setoutbytheCommission inits
"Report onsomestructural aspects ofgrowth "(1).
Onthefundamental role ofenterprises ,thereport states that
"itisforthefirm toreply tothechallenge oftheprofound
changes .intheconditions inwhich ,fromnowon,European
industry must operate "(2). -
Itfurther states that "theCommission suggests that astrategy
forrecreating aneconomic climate andtheconfidence favourable
forgrowth beaimed atproviding theright environment and -
general measures ofsupport fortheindividual firm (3).
Seen inthecontext ofaCommunity encompassing amarket ofmore
than 250million people ,small andmedium-sized enterprises can
benefit frombutatthesame time contribute tothegradual
integration oftheinternal market andtheconvergence ofthe
economies .They should beencouraged andassisted ,assources
ofinnovation andcompetitiveness with -respect totherest of
fheworld . ^ .
. "(T)COM(78)255 final of22.6.78
(2)op.cit .Chapter I,paragraph 4
(3)op.cit .Chapter III ,paragraph U.

-8-
Itought not tobeforgotten either that therelative importance
ofthe SMEwill increase asandwhen other Mediterranean
countries join theCommunity .
III .STATUS OFWORK
15.Toput theoptions chosen into practice theCommission ,working
with representative organisations from themember countries ,has
drawn upalist ofthemeasures taken tosupport theSMEbythe
Member States .'The number andvariety ofthemeasures ,their
direct andmore often indirect effects and theinadequacy of
available information have made itadifficult operation and it
isnotpossible atpresent toestablish acomplete picture .
Nevertheless theCommission hasattempted ,inproducing a
tentative list ,todistinguish some significant developments
which may serve asthebasis for acommon effort bytheMember
States toobtain amore representative andaccurate survey ofthe
situation .
TheCommission hasalso listed themeasures recently taken at
Community level ,classifying them according toobjective .
A. Measures taken bythemember countries tosupport theSME
(seeAnnex )
16.Themost important measures ,both public andprivate ,which
affect theSMEcanbeclassed under three headings depending on
their objective .
Thefirst twocover general objectives aimed ontheonehand at
supporting firms intheir business activity andontheother at
improving skills andencouraging employment : - >ir<lcategory
covers measures with specific objectives .
Notall themeasures have been taken solely with aview tothe
SME ;many measures areblanket schemes with special arrangements
facilitating access forsmall firms .
17.Support forfirms intheir business activity takes theform of
measures aimed atimproving structure andstimulating techno­
logical innovation .
«

-9-
Inthefirst place ,theMember States influence thelocation of
enterprises with aview tomaking better useofregional
potential' andencourage adjustment ofindustrial patterns in
sectors where restructuring andconversion arenecessary .
Secondly ,theauthorities take measures tosupport thedevelop­
ment ofnewtechnologies and thetransmission ofinnovations
throughout industry .
Thepolicy instruments employed aregenerally ofoneoffour
types :
a.taxconcessions -réductions orexemptions ;
b.financial ;
- direct aid (premiums orsubsidies );
- easier borrowing (interest-rate subsidies and
guarantees );
- encouraging thestrengthening ofthefirm 'sowncapital
(temporary minority equity )participation -creation or
up-dating ofmutual guarantee .systems );
- creation offunds ofdifferent kinds with specific
objectives ; ,
c..special arrangements forSMEinlaws andregulations ;
d.services offered bytheauthorities ortheprivate sector ;
assistance ,advice andinformation onfiscal , .
financial ,economic andlegal matters ,provided through
chambers ofcommerce andindustry andother' channels ;
- creation ofregional centres orcentres forindividual
industries ,offering technical services ;
encouragement ofRandDandinnovation through joint ^
research .Support forpilot projects inspecific
fields such asenergy ,recovery andrecycling ofraw
materials ,research into new products andnew
technologies .

10-
18.Theefforts toimprove vocational skills andencourage employment
cover problems ofconversion ,training ofmanagers aswell asthe
workforce ,andofemployment itself ,especially ofyoung people .
Thepolicy instruments most often used arerelief from social
insurance contributions andfunds designed tosupport trainee -
ships andseminars aswell astraining courses infields
involving newtechnologies ,modern management methods and
marketing (especially exporting ).
19.Thethird category ofmeasures covers specific activities such as
subcontracting ,cooperation between enterprises ,exporting and
intra-Community trade ,public contracts' .
Most usually thepolicy instruments employed inthis final
category areofalegal nature covering ,among other things ,
company lawandcontractual relationships between enterprises or
between customers andsuppliers .
Services provided .include thedevelopment ofexport back-up from
assistance from private aswell aspublic "sources ;banks and
management consultancy companies -having networks ofagencies
extending over large areas -supplement theservices already
established bythepublic authorities .General legislation
dealing with theSMEfrequently also applies tosmall andmedium -
sized enterprises inthedistributive sector .Butspecific
measures (I)arealso taken forthis sector ,applying for
instance tocertain sections ofit(e.g. hotel trade ),particular
ways ofdoing business (retail group purchasing )orwithin amore
general framework such astheFrench lawof27December 1973 on
thedistributive trades and the "artisanat ".
20.Ananalysis ofnational measures reveals first andforemost the
important role which theMember States assign totheSME ,both in
their regional' policies andinpolicies designed tofacilitate
adjustment ofindividual industries .TheSMEareseen ,too,asa
particularly suitable vehicle forthedevelopment anddissemination
ofnewideas within industry .
COAllthese measures appear inthesynoptic tables ofspecific measures
taken bytheMember States oftheEuropean Communities inthe
distributive sector which have been published bytheCommission .

-11-
Support schemes iflake useofawide .selection ofinstruments
ranging from themors traditional -such astaxandfinancial
measures -toche iaore individual -such asthedirect provision
ofservices .
TheMember States' schemes areembedded inlaws andregulations
andforthemost part consist ofintegrated sets ofmeasures
whose effectiveness ismore easily andaccurately evaluated in ■
qualitative than quantitative terms .
Themost marked characteristic toemerge from acomparative
analysis isthewide diversity ofnational -schemes and the
methods employed toimplement them ,inspite ofthesimilarity of
theaims being pursued byeach Member State .
B. Community action -
21.TheCommunity 'spolicy towards theSME isset intheframework
already described ,theaimbeing totake account ofthe fact that
many ofthemost infractable problems theSMEhave tocontend
with areproblems peculiar tothem .This iswhy theCommission ,
pursuing thepolicy goal ofcreating agenuine domestic market in
theCommunity ,hasfelt that itcould take theview that ..
preference given tothis type offirm ,bycertain Member States ,
when awarding public contracts could becompatible with the
Treaty provided such preference isextended totheSMEofthe
-other Member States .Again ,theCommission has tried toensure
»
initsdraft directives onapproximation oflegislation that a
form ofharmonisation isnotintroduced which would unduly hamper
SMEessentially serving local products ,where such firms
predominate intherelevant industry .' '
Under itscompetition policy theCommission adopted inApril 1978
anewnotice ofblanket application butofspecial importance to
theSME .This istheCommission Notice concerning itsassessment
ofcertain subcontracting agreements inrelation toArticle 85of
theEECTreaty (1).Itsaim ,istoclear updoubts about the
compatibility ofthis type ofagreement wi-th theCommunity 's
rules oncompetition while encouraging thedevelopment ofa
practice inindustry likely tostrengthen theposition oftheSME .
(1)O.J. 1of3.1.1979 ,p.2.

-12-
Initscurrent work ondrafting oramending various texts of
general application which deal with licencing agreements ,
exclusive distribution and selective distribution ,theCommission
isseeking toensure that SMEinterests arepromoted .
22.Under theregional policy ,there are twoavenues bywhich to
encourage thedevelopment oftheSME .
- Under itsquota section ,theERDF canprovide assistance in
the traditional form ofinvestment aid .Themaximum rate of
\
'assistance from theFund is20%andmay notexceed 50%of
aidawarded nationally toaproject .Inorder tofacilitate
' SMEaccess toERDF asisistance aspecial arrangement was
introduced inFebruary 1979 ,when theRegulation ontheFund
wasrevised (1)which provides that small-scale projects may
beaggregated soastomeet theuniform eligibility
thresholds laid down intheRegulation (minimum investment
of50000EUA ,atleast 10jobs created ormaintained ).
- Under thenon-quota section ,also created when theRegulation
wasrevised ,five specific Community .actions proposed bythe
Commission areofparticular relevance toSME .Their aim is
tocontribute tothedevelopment orconversion ofregions
Haffected bytheregional consequences ofCommunity policies
oralternatively tocontribute tosolving problems inthe
most needy frontier areas .Under these schemes ,theSMEand
artisan firms may ,onthebasis offive-year programmes ,
apply forCommunity aid toimplement asetoffairly new
measures designed tohelp adjustment totheevolution and
restructuring ofmarkets intheregions concerned .
Specifically ,these aremeasures topromote thedevelopment
ofadvisory services andjoint services between enterprises ;
themustering andpassing onofinformation oninnovations ;
theimprovement ofaccess toventure capital ;sectoral
studies andmarket research ;theimprovement ofcommunica­
tions infrastructure between enterprises andtheir surroun­
ding economic area ,including telecommunications anddata
processing networks ,etc .
)Council Regulation (EEC)No724/75ofJ8March 1975 establishing a
European Regional Development Fund ,amended byCouncil Regulation
(EEC)No214/79of6February 1979 O.J. C36of9.2.79 .

-13-
TheEuropean Parliament endorsed these proposals byavery large
majority onIIMarch 1980 .Should these newinstruments prove
effective ,theCommission maypropose their inclusion inthe
i
quota section oftheFund when theERDF Regulation isnext
revised .
23.Inthefield ofenergy theCommission isencouraging thedevelop­
'ment ofdirect assistance toenterprises ,especially small and
medium-sized ones ;aimed atcarrying outon-the-spot analyses of
energy consumption andmaking estimates ofpotential savings to
bemade .
What theCommission has inmind isthe "energy bus"system ,that
isvehicles carrying specialised teams andequipment which can
visit industrial plants andareable viacomputer tolink upwith
aservice forgathering andretransmitting data andprogrammes
generated bytheJoint Research Centre atIspra .
Following very good results from this system inCanada ,the
Commission recently organised ademonstration exercise invarious
Community countries with thehelp oftheCanadian authorities ;
thesuccess ofthescheme isshown notonly bytheinterest it'
aroused among industrial executives inthecountries visited but
especially bythefact that practical initiatives inthesame
direction have been taken inseveral Member States .-
-Community programmes arealso currently running togive financial
support todemonstration projects involving energy conser­
vation (2)andprojects toutilise alternative sources ofenergy
(geothermal energy ,liquefaction andgasification ofsolid fuels ,
solar energy )(3).These programmes arealso^pentotheSME .
(2)O.J. L158of16June 1978 ,p.6.
(3)O.J. L158of16June 1978 ,p.3 .

-14-
Theaim istodemonstrate theindustrial andcommercial viability
ofthese processes soastoencourage their general application .
Twotender procedures have already been held and athird
invitation will bepublished towards theendof1980 orearly
next year .
24.Certain improvements have recently been made inthe access of
theSME totheCommunity 'sfinancing agencies andfunds .
Forexample ,theSMEarenoweligible under Article 56ofthe
ECSC Treaty forglobal loans carrying aninterest-rate subsidy
forinvestments which create other jobs indeclining steelmaking
areas (1).
Again ,theEuropean Investment Bank hasmade improvements toits
system ofglobal loans ,entailing greater flexibility inits
arrangements with intermediate financing agencies .Theminimum
loan has been reduced from 100 000 to50000 EUA and insome
cases to25000EUA ;themaximum EIB involvement hasalso been
raised from 40% to50% ofthe total investment .
25.TheCommunity isconstantly concerned tolighten theburden of
administrative formalities which areparticularly troublesome to
small firms ,and istaking appropriate action inthis direction .
Generally speaking ,-these charges bear all themore heavily on
enterprises that are toosmall tohave sufficient resources to
meet them .TheCommission istherefore trying totake account of
this either byincluding specified exceptions inregulations or,
where appropriate ,byselectively improving theconditions under
which theSMEoperate .
Thefollowing examples maybecited .
- Thework being done atageneral level within theCustoms
Union Service ,inclose association with agencies working on
simplification intheMember States ,tointroduce standard
customs documents based onasingle Community layout (export
forms ,transit forms ,EUR 1certificates etc.)nowallows
firms trading internationally ,including theSME ,toobtain
such Community documents using asimple andcheap reproduc­
tion system .
(1)O.J. C82/8of29March 1979

- Special exceptions were made fortheSME inthe4th
Directive oncompany lawof25July 1978 .Similar
exceptions areprovided forinthedraft 7thDirective on
group accounts.'
-- Questionnaires sent toindustrial andartisan firms inthe
Member States onbehalf of .the Statistical Office ofthe
European Communities have been simplified for small
enterprises . -
- Various measures ofgeneral application taken bythe
Commission concerning rules ofcompetition applying to
enterprises have also helped toreduce theadministrative
formalities for theSMEbyrelieving them oftheneed to
apply fornegative clearance ornotify theCommission of
-certain agreements .
26.Aset ofmeasures has been introduced tofacilitate SME Access
toinformation ;these measures aremainly designed tohelp firms
that owe their existence tonewtechnologies .Here theaccent is
» -
onestablishing cooperation between national systems of
information andadvice forthis class ofenterprise andon
encouraging theuseofdata bases such asEuronet Diane ,anew
high-speed computerised information system .Operational since
end-1979 ,Euronet Diane commissioned forcommercial useon,13
February 1980 .
Another project istoimprove access tolicensing offers inthe
Community ;this ,will bebased onexisting national systems and
involve appropriate arrangements with theMember States .
Inthearea ofgovernment procurement there are sectors ofsome
•economic significance ,e.g. medical supplies ,educational
equipment orscientific apparatus ,where thebest suppliers are
usually highly specialised andefficient SME ,often highly
, capital intensive .Improved access togovernment contracts in
alltheMember States will provide anopportunity forthese firms
tostrengthen their structures andexpand .

Forthis class ofenterprise theexistence ofCommunity arrange­
ments forthepublication ofgovernment contract (particularly
supply contract )notices above acertain value intheOfficial
Journal ,common rules inthetechnical field andcommon rules -for
participating inandawarding contracts aredefinitely ofspecial
value because ofthe limited resources these firms must work with
and thewide variation among national procedures before the
Community scheme wasadopted .
Because somany SMEmanagements areunaware ofordonotproperly
understand thebenefits available tothem under these two
Directives ,theAdvisory Committee forPublic Contracts held a
wide-ranging exchange ofviews atitsfourteenth meeting in
April 1979 onsteps that might betaken inthis area .The
Commission for itspart feels that theSMEcannot possibly make
theroost ofCommunity advances inthefield ofgovernment
procurement unless theflow ofinformation tothem isimproved .
Astoinnovation itself ,theCommission hasbeen pursuing an
analysis ofthefunctioning andoperational environment of
innovative SHEwhich iscontributing togreater knowledge about
enterprises ofthis kind and thespecial problems they have to
cope with intheCommunity .
With theassistance ofnational experts ,several studies have
been carried out .They include anexpanded -list ofnational
measures intended tostimulate industrial innovation inthe
European Community with particular reference tosmall andmedium -
sized enterprises .Anenquiry into some barriers toinnovation
among SMEhasbegun inall theMember States and astudy designed
tosecure improved statistical data onthe "rate ofinnovation "
inthe Member States isalso inhand .
Anumber ofstudies have been started toobtain abetter under­
standing ofthevarious aspects ofinnovation both within the
Community andincomparable non-member countries .TheCommission
hasalso taken steps topromote the .exchange ofinformation on
innovation -through periodic forums organised atCommunity level .

17-
Inaddition ,theCommission has submitted proposals tothe
Council (under thenon-quota section oftheERDF )tomake it
easier forinnovating SME toobtain'venture capital .Itisalso
investigating other possibilities inthis connection within the
.framework especially oftheAdvisory Committee onIndustrial
Research andDevelopment ,which islooking ,,too ,atissues
involving joint research organisations . * '. , •
28.In1978 ,theCommission setupitsAdvisory Committee on
Industrial Research andDevelopment toobtain theviews of
industrial managements directly concerned onallaspects of
research anddevelopment involving horizontal ,relations between
~,theCommission andindustry intheCommunity ..Itwasoneofthe
priorities intheCommittee 'sfirst work programme toexamine the
position androle ofRand Dinindustrial SME .Studies on
specific aspects ofthis subject have been completed and a
,seminar wasorganised towards theendof1979 with theaimof ;
exploring ways inwhich theCommunity could promote RandDamong
small firms breaking newground .TheCommittee ,insumming up
itsfindings ,indicated itsinterest insupport measures at
.Community level ,especially ofanindirect kind .Itrecommended
that theCommission adopt anapproach involving progress by
stages .
With reference todirect intervention bytheCommunity to
support RandD,mention should bemade oftheCommission ?-s
•proposal forasecond research anddevelopment programme inthe
field oftextiles andclothing tobespread over three ,years .
Theprogramme istobeimplemented intheform ofacost-sharing
research contract with COMITEXTIL (50% tobeborne bythe
Community )andwill cover theacquisition ofknowledge about new
technologies ,,newproducts andservices .Since thetextiles and
clothing sector ismade upofalarge number ofSMEwhich arenot
themselves inaposition toimplement large-scale research
programmes ,these enterprises will betheprimary beneficiaries of
theresearch results .
TheCommission hasfurther proposed aprogramme ofresearch into
technologies involving clay minerals andindustrial ceramics ,a
sector ofindustry largely made upofSME .

-18-
Finally ,theresearch programme onleather andfootwear adopted
bytheCouncil on14February 1977 isnowbeing implemented .
29.The Commission isaware that relations between SHE and their
business partners innon-Community countries call forstructural
adjustment ,subject asthey are tothefundamental changes taking
place inallproducer /customer relationships .However ,with
regard tothespecial obstacles facing small andmedium-sized
enterprises intheexport field ,there isatthepresent time no
broad consensus among thefederations andorganisations
concerned .
However ,several organisations consider that Community support
forexports tonon-Community countries would notbejustified and
that SHE efforts should concentrate instead ontrade within
theCommunity .Inthis context ,small andmedium-sized enter­
prises should have aspecial interest intheremoval of
barriers totrade andcross-border activities .Theimpending
extension tothenew Member States ofthe Brussels Convention
of9October 1968 dealing with jurisdiction and theenforcement
ofjudgments incivil andcommercial matters ,will behelpful
here .Oneofthe ;aims oftheConvention istostrengthen the
position ofcreditors byestablishing uniform rules and
procedures tofacilitate therecognition ofjudgments within
theCommunity .

19-
30.Action bytheSocial Fund -financing pilot projects in
vocational training tailored totheneeds ofsmall andmedium -
sized enterprises -isnowofgrowing importance .
TheEuropean Centre fortheDevelopment ofVocational Training
hasalso embarked onastudy ofways ofhelping toimprove .
management andvocational training intheSMEandartisan firms .
Differences ofopinion among thefederations andorganisations
concerned ,however ,arecausing theCentre sojne problems ;without
actually jeopardising thework ,this isslowing itdown toa
significant extent ." ~
31.TheBusiness Cooperation Centre hasniaintained itsefforts to
promote inter-firm cooperation .
Since itscreation in1973 itsmain objective hasbeen tohelp
bring about transnational cooperation orintegration between
enterprises from different Member States (Commission Directives -
of21June 1973 ).TheCentre broadened itsscope in'1977 to
include links between Community andnon-Community enterprises
fostering industrial cooperation (supplementary Directive of
20July ,1977 ). * ,
Cooperation between firms inCommunity countries and firms in
non-member countries -especially with aview toimproving
structures inthecountries which have applied formembership of
theCommunity -isanarea inwhich theCentre maywell have
considerable scope forincreased activity . *
32.Like theMember States ,theCommission hasbeen taking specific
measures inthearea covered bythedistributive sector ,some of
which will benefit the SME .
a)Thefirst ofthese tasks istodraw upmutually consistent
statistics onthedistributive trades inEurope ,providing
improved understanding ofstructures sothat their weak
points canbeidentified andoncurrent trends sothat
schemes and other measures can bedemised onthe basis ofan
adequate flow ofinformation .This task isbeing undertaken
bytheStatistical Office oftheEuropean Communities .

20-
b)Another objective isexchange ofinformation about the
distributive sector .This isbeing effected within the
Commission 'sgroup ofgovernment experts oncommerce and
distribution ,whose sub-groups areworking onstudies
covering thesector 'smost pressing problems .TheSME in
this sector arebeing looked atfrom thepoint ofview
ofboth thedifficulties they encounter and themeasures
taken tohelp them bygovernments .
These working parties arealso theforum forasystematic
exchange ofstudies being carried out ineach ofthe
countries .
c)Next there aretheways inwhich distributive SMEmight
gain access onappropriate terms totechnological advances
affecting trading andmanagement methods .
.The first stage ofthis work wascarried out inLuxembourg
on29February 1980 ,when astudy day forretail and
wholesale SMEwasorganised inliaison with the
Directorate General for Scientific and Technical Information
Management ,inthecourse ofwhich possible ways ofaccessing
information were discussed and tried out .Aquestionnaire
wasdistributed toexecutives present with aview to
eliciting guidance onfirms' actual needs .Theresults of
thereplies will provide afoundation onwhich tobase more
general considerations regarding thesetting upofadata
bank .
d)Ithasalso been necessary toorganise thedialogue with
theSME .Bycreating theCommittee onCommerce and
Distribution in1978 ,theCommission provided aforum for
managements ,from allsections ofthedistributive sector in
Europe andparticularly from theSME ,.thelatter being well
represented ontheCommittee .
T[his makes iteasier toassociate those actually working in
distribution with Community activities andfacilitates the
identification ofgeneral andspecific problems .

WORK PRIORITIES FOR 1981
33.Bystudy anddiscussion ,theCommission hasdiscovered and
confirmed ways andmeans ofusing theCommunity framework to
improve theenvironment inwhich small andmedium-sized
enterprises operate andhasalso identified theconstraints which
determine orlimit themeasures taken bytheCommunity .
Ontheonehand ,theCommunity must encourage anongoing exchange
ofinformation among theMember *States on.their schemes tohelp
theSMEand theexperience they have gained intheprocess ,"so
that itcantake alead from themost promising instances and ,
where appropriate ,generalise these onaCommunity scale .
Ontheother hand ,theCommunity ,when framing andimplementing
itspolicies ,must continue totake account inasystematic way
•ofthespecific nature oftheSMEanddoeverything itcan to .
support their development .
34.In1981 ,theCommission will bepursuing theaction ithas
already begun (seeChapter III). Itintends nevertheless to
.emphasise some points which itfeels deserving ofpriority -
treatment ,giving dueconsideration totherole theCommunity is
able toplay and therelevance these measures have for theSME .
35.Finance -
Asoneofitspriorities ,theCommission will begiving added
attention totheproblems offinancing theSMEandindustrial
innovation .Although they look different onpaper ,these two
objectives doinfact overlap :ontheonehand ,ifitwere
easier fortheSME -toobtain funds ,they would beable to
contribute even more flexibility andadaptability totheeconomy ,
while ,ontheother hand ,itisinside dynamic SME that many
innovations (particularly those likely tocreate newjobs )are
■conceived and tried out .Inboth cases thebasic problem isthe
same .This istosafeguard andstimulate investment which is
thinly spread ,ofrestricted scale and involves ahigh risk .
There ishence aneed tosurvey andcatalogue thechannels
through which capital -ofwhich adequate amounts are
infact available -canbetapped forinvestment inthe
production s'ystem andtochoose those whose Community-context
offers thebest prospects ofeffective implementation .

-22-
36.Another problem that must besolved isthereluctance of
banks andother credit institutions totake account ,inlending
totheSME ,ofthereal growth potential oftheborrower ,
andnotonly ofcollateral offered .Thegeographical spread of
banking networks and thewide distribution ofsmall local
banks areanasset inchannelling finance toeven thesmallest
enterprises .TheCommission hasorganised asymposium in
Luxembourg on30September /1October dealing with certain
aspects ofthis question .
37.TheCommission feels that there isacase for aCommunity
initiative aimed atinducing aconsensus among banking
institutions onthe need for acommon evaluation ofmethods
ofapproaching theSME .
TheCommission aimshould betostimulate contacts among the
parties involved andanexchange ofinformation onexperience
they have gained ;asarule itshould notintervene inthe
contractual relationship between lenders andborrowers .
More particularly ,theCommission would like tointerest
local banks andcooperatives inexchanges ofinformation about
financing experience atregional and local levels .These
institutions could hardly bebetter placed tounderstand the
real requirements ofSMEandare inanycase often faced with
theproblem ofinvesting their excess liquidity .Theaimmust be
toimprove theuseofcapital savings atthepoint where they
accumulate .
This approach isofparticular importance inthecontext ofthe
enlargement oftheCommunity since access bytheSME tothe
banking network isofconsiderable significance inthecountries
which have applied formembership .
38.TheCommission mayalso consider thepossibility ofestablishing
alegal framework enabling promising experience that hasalready
been made insome Member States tobepropagated throughout the
Community .This applies inparticular tofinance guarantee
cooperatives ,which offer borrowing facilities onthebest terms
fortheSMEandeconomically sound avenues ofinvestment for
banks ,,especially local banks .

23-
39.While thebanking system isclearly theright instrument for
channelling capital right down toindividual SME ,itishampered
byproblems ofexpertise andtraining :those proposing projects
andthose providing thefunds forthem must notonly respect each -
other 'sspecialist knowledge butalso have some understanding of
itthemselves ,whether itbefinancial ortechnical .Yetamong
SMEandsmall banks particular such expertise isinadequate .
Thus ,itisclear that abetter exchange ofinformation between
credit institutions andenterprises would constitute amedium
through which their differing experience indealing with thesame
problems could becompared onthebasis ofreal-life situations .
40.New information technologies
Intherelatively near future cheap data processing facilities
andways oftransmitting allkinds ofinformation will become
available tofirms .This will bring about farreaching changes in
both their internal and external environment .
These changes could beakey tofurther progress among small and '
medium-sized enterprises ifthey seize theopportunities being
opened tothem intime .
41.Atastructural level first ofall ,information distribution will
probably lead toagrowing decentralisation oftheproduction
pattern inmany sectors (small independent units ,working at
home ).This change will beeven more marked insome manufac­
turing sectors where theapplication oflow-cost data processing
inproduction -atboth thedesign andfabrication stages -will
reduce theadvantage ofeconomies ofscale achieved bymass
production andenable products tobealtered quickly tomatch
demand asitchanges .This general tendency will probably be
exploited all themore easily bytheSMEbecause asaresult of
their dispersal throughout allsectors they areforerunners 'of
theeventual structure ofindustry asawhole .
Furthermore ,"theease with which information circulates will help
establish aclose interaction between themarket and itsrequire­
ments ontheoneside and thefirms andtheir capabilities onthe
other ,andalso between technology andinnovation .

-24-
Theintroduction ofthese information technologies should also
tend tolighten theburden ofadministrative formalities placed
onenterprises bytheauthorities .
42.'These considerations and lines ofaction are reflected inthe
Commission 'sdocument entitled "European Society Faced with the
Challenge ofNewInformation Technologies :ACommunity
Response "(1):itistheCommission 'sview that theCommunity
should develop anoverall strategy enabling Europe toreap the
I
benefits oftherevolution ininformation technology andavoid
itsarrival contributing toEurope 'sdecline .
Measures will betaken inthis context which give consideration '
inparticular tothevalue they mayhave inpromoting the
vdevelopment oftheSME intheCommunity .
Initsdocument entitled "Employment and theNewMicroelectronic
Technology "(2),theCommission stresses theimportance ofproper
useofCommunity funds andfinancing agencies already operating
toassist theSME intheprocess ofintroducing thenew
technologies .
A3.Specific measures inthecontext ofenlargement
Analyses made inconnection with theenlargement oftheCommunity
I
have revealed that Portugal has acute problems with industrial
structure .
Apart from afewlarge-scale enterprises ,some ofthem benefitting
from injections ofnewcapital from European investors particu­
larly ,Portugal 'sindustrial economy iscomposed inlarge part of
SMEwhose structure ofproduction isvery often obsolete and
which have nosound financial base .Compared with thegeneral
situation oftheSME intheCommunity ,theequivalent firms in
Portugal are inanextremely precarious position .Todeal with
this state ofaffairs ,thePortuguese authorities have setupa
programme oftechnical andfinancial assistance specifically for
theSMEandthis ought tocontribute ,bysupplementing private
initiatives ,torestructuring ,modernising anddeveloping this
class ofenterprise .Thescheme also covers management training
andinformation onthescope ofnewtechnologies .
TO COM(79 )650final of23.11.79
(2)COM(80 )J6final
t

TheCommission foritspart feels that thestructural imbalance
between therespective situations oftheSMEinPortugal and
inthepresent Community could well hamper economic integration
after entry because thedifferences aresowide .This iswhy
\ theCommission ,after studying together with thePortuguese
authorities theprogramme ofassistance drawn upbythelatter ,.
hasconcluded !that selective ,intervention bytheCommunity
should beconsidered even before Portugal actually joins .
With this inmind aproposal hasbeen submitted totheCouncil
forCommunity participation inthefinancial effort being made "...
bythePortuguese authorities .This will take theform ofa
special aid ,limited induration ,tobepaid forfrom the
Community budget (1).
V. THE DIALOGUE BETWEEN THE COMMUNITY AND THE SME -
Community action isbyitsvery nature macro-economic andata
level where theaim istoimprove thegeneral conditions inwhich
enterprises operate .
However ,identifying thegeneral problems anddefining theterms
ofreference for ,asearch forpossible solutions isnotalways
specific enough tomeet some oftheconcerns ofsmall or
medium-sized enterprises ,whose structure andmarkets areoften
determined byalocalised economic environment' .
Forthis reason there should beadialogue between theCommission
andtheSMEsoastobridge thegapbetween individual situations
and themore comprehensive level ofCommunity action ;this will
entail adetailed analysis ofthespecific position oftheSME
•inrelation tothecommon policies .
Thetopics tobediscussed should first bedefined inclose "
contacts among thevarious organisations involved intheSME
development .These organisations should work out their own
methods ofdeveloping into acredible speaking partner by
establishing asynthesis ofthespecific needs oftheir class ■
ofenterprise .
(1)COM(79)442 final of13.9.1979 .

ANNEX
SMALLANDMEDIUM-SIZED ENTERPRISES INTHEEUROPEAN COMMUNITY
CompendiumofmeasurestakenwithregardtothembytheMemberStates'authorities
(DataemanatingfromtheMemberStateswhichdonotengagetheresponsibility
6ftheCommission asregardstheircompatibility withtheTreatiesofParis
andRome). •

MEASURES TOUNDERPINACTIVITY
a)Taxmeasures -
GERMANY
-Increaseinthebasicallowancesinrespect <Jfthetaxontradeand
industry(GewerbeSteuer); -
-Abolitionofpayrolltaxon1January1980
FRANCE
Introduction ofanallowanceequalto33/Softaxableprofitsduringthe
firstfouryears.TheGovernmenttograntinstallation loans..
IRELAND ...
Thresholdforexemptionfromcorporation taxraised.
UNITEDKINGDOM :.'/ ,.
-Thresholdforexemptionfromincometaxraised;
-Thresholdforcorporation taxraised; -
-VATthresholdraised
b)Financial measures
GERMANY
-ERPloansincreasedtoDM975millionin1978(ofwhichnearlyDM400
millionintheformofstarting-up loans);
-Iri1978,theFederalGovernment drewupaspecialprogrammetoassist
SMEinbuildinguptheirowncapitalresources;
-TheReconstruction LoanCorporation (Kreditanstelt fur-Wiederaufbau)' .
andtheEqualization ofBurdensBank(Lastenausgleichsbank )extended
theirloanprogrammefor,SME(6488loansamountingtooverDM1500
millionin1976;10577loansamountingtooverDM2150millionin1977)

BELGIUM
TheLawonEconomicReorganization of4May1978andthedecreesimplementing
itarethemaininstruments governingLoanstoSME.Theyprovideforavariety
ofaids(e.g.interestsubsidies,capitalpremiums,employment premiums)and
fortheestablishment ofaguaranteefundandallowtheNationalBusinessLoan
Fund(Caissenationaledecreditprofessionnel )toacquireminorityshare­
holdings.
DENMARK
-CeilingforfinancialassistanceundertheLawonloanstoartisanfirms
andsmallindustrialestablishments raisedfromDKR47.5millionin1977
(700applications )toDKR52.5millionin1978(751applications );
-InJanuary1979,theArtisanatCouncildecidedtosetupafinancingagency
forartisanfirmswhichistoraisefundsbyissuingbonds.
FRANCE
-FinancialaidintheformofapremiumisgrantedbythestatetoRégional
Development Companies (Sociétésdedéveloppement régiona-l)whichacquire
■noldingsinitiocapitalofSME.Sincetheschemewasintroduced,.387-
applications forassistancehavebeenapproved,representing holdings .worth
FF142million;
-PursuanttotheDecreeof27July1977,RegionalPublicAgencies (Etablissements
publicsregionaux)maycontributetoguaranteefunds.By31December1978,
17suchagencieshadvotedcontributions totalling FF43million(94favourable
decisionshavingbeentaken);
-In1978,the22existingRegionalPublicAgenciesapprovedtheintroduction
ofpremiumstopromotethesettingupofenterprises,allocating FF60million
forthispurpose.By1December1978,600premiumshadbeengranted;
-Amajornationalcompetition forplanstosetupenterprises,waslaunched
attheendof1977,with30prizesofFF50000;

-ANationalGuaranteeFundfortheestablishment ofenterprises wassetup
in1978withacapitalofFF40million(FF20millionfromtheState
andFF20milliontobeprovidedbybanks).Itistoguaranteeloans
totalling FF200million;
-Thesettingupofnewenterprisesisone©fthemainobjectivespursued
byanumberofbodiesactiveatregionallevel(ChambersofCommerceand
Industry;"expansioncommittees";Regional ,Development Companies)which
receivespecialStateaidsforthispurpose.TheRegionalPublicAgencies
alsograntpremiumstotheend(FF300millionuptotheendof1978).
IRELAND
-In1977,theIDA(IndustrialDevelopment Agency)launchedaspecialprogramme
whichwasdesignedtohelpcreatenewenterprises andwhichprovidedfor
specialloans,interestsubsidiesandtrainingprogrammesforheadsof
enterprises;
-UidertheIDAprogrammetoassistSME,capitalgrants(rangingbetween35%
and60%)weremadeto400projectsin1978(IDAai.damountingtot12million),
to225projectsin1977(It5.700million)andto236projectsin1976
(£5million. \'
ITALY (
-Thedecisiontakenin1978toraisetoLIT50millioncreditsnotsubject
toceilingcontrolswasofspecialbenefittothesmallestenterprises;
-Lawn°675of12August1977includesfinancialprovisionsdesignedto
assistSME:credits,loanfacilities,interestsubsidiesforcreditsin
general;aidsforcollectiveguaranteeconsortiaorsyndicats,subsidiary
guaranteesforSME; , ' ,
-UnderLawn°374of30April1976,creditsareavailableforgroupscomprising
atleastfiveenterprises witheachundertakingfixedinv;stmentworth
LIT3000millionandemployingaworkforceofnotmorethan300.

LUXEMBOURG
TheRegulationof27July1978extendsforafurtherfiveyearsthelawof
29July1968(framework Lawapplicabletothesmallbusinesssector),which
providesforinterestsubsidies,capitalgrants,apprenticeship premiums,
savingspremiumsforsettingupinbusiness,andcontributions tomutual
insurance funds.
NETHERLANDS
-The1978Lawonthegeneralregionalpremiumprovidesnotonlyforabasic
premiumbutalsoforapremiumforsmall-scale investments ;
-The1977decisiononloanstoSMEamendedtheexistingarrangements
underwhichtheStateguaranteedcreditsmadetoSME.
UNITEDKINGDOM
-TheTrusteeSavingsBantehavebeenauthorized tolaunch apilotprogramme
ofcommercial loansforsmallenterprises (individual loansnottoexceed
I25000);
-TheGovernmentplans(1978)tointroduce,onanexperimental basis,a
systemforguaranteeing commercial loans.
c)Specificlawsandregulations
BELGIUM
Aworkingpartywassetupon25September 1979tolookintotheproblemof
simplification .IthasmadeanumberofproposalstotheGovernment .
FRANCE
Twosetsofmeasuresforsimplifying administrative arrangements wereadopted
bytheGovernmentinSeptember 1977andinFebruary1979.

NETHERLANDS
~Thearrangements forgranting authorizations have been simplified ;
-Thaarrangements forgranting loans andsureties have also been simplified .
d)Service activities
BELGIUM ' ' ; ;
Social secretariats approved byemployers .
FRANCE .
-Abody responsible forfostering coordination between theauthorities and
firms wassetupin1971 .Itisanswerable tothePrime Minister andhas
already resolved alarge number ofpractical problems ;
-TheChambers ofCommerce and Industry have introduced arrangements whereby
allthenecessary formalities forsetting upinbusiness canbecompleted
atthe same counter . •
UNITED KINGDOM '
Programmes have been drawn upforcomputerized production management .
RSD-INNOVATION
Anexhaustive list ofthemeasures taken will beprepared bysub-Group II
(1)ofCORDI before the endoftheyear .
Forsome years ,theMember States have been making great efforts topromote'
innovation andtoinvolve SMEintheinnovation process ^)
1)Advisory Committee onIndustrial Research and Development
2)Aprovisional list ofmeasures -inEnglish -hasalready been compiled
byStrategic Surveys Staff Group oftheTNOintheNederlands (Doc.SSV79/
ABS 001ofMay 1979 ).

Forexample:
-Patentsandlicences
«
DENMARK
TheDanishInventionCentrehelpsinventors andSMEfindenterprises that
mightbeinterestedintakingoutlicences.
GERMANY
ThePatentOfficeforGermanResearch <Patentstelle furdiedeutsche
Forschung),theMaxPlanckGesellschaft ,theWorkingPartyonPatentBroking
(Arbeitsgruppe Patentverwertung )andtheGermanPatentsOffice(Deutsche
Patentamt)nowprovidefullerinformation onexistingpatents;theyassist
inventorswishingtopatenttheirinventions,findindividuals whomaybe
willingtofinancethepracticalapplication ofinventions,etc.
FRANCE
TheNationalResearchApplication Agency(AgenceNationalepourlaValorisa­
tiondelaRecherche)performs asimilarroleinFrance.
-Jointresearch
DENMARK
Thetwotechnological institutes inDenmark(Copenhagen andAarhus)and23
non-profitinstitutes,including :
-theDanishCentreforAppliedElectronics
-theDanishWeldingInstitut
-theDanishHydraulicsInstitute
-theDanishIsotopeCentre
-theDanishShipResearchLaboratory
-theDanishTextileInstitute
areengagedinjointhorizontal and/orsectoralresearch.
Alltheaboveinstitutes receiveaidfromtheGovernment .

-7-
BELGIUM i ■'
Inall,13jointresearchcentresareinoperation. ''
GERMANY .•
JointresearchnetworkshavebeensetupbytheFraunhofer Gesellschaft
<25researchcentres)andbytheUnionofIndustrial ResearchAssociations .
(Arbeitsgemeinschaft industriellerForschungsvereinigungen ).
\
FRANCE-ITALY
State-aidedjointresearchcentreshavebeensetupinanumberofsectors.
NETHERLANDS ■;
JointresearchisgenerallycarriedoutbytheTNO,whichis50%,financedby
theGovernment .
UNITEDKINGDOM
Theresearchassociations setupforthedifferentbranchesoftheeconomy
receivesubsidiesrangingfrom20%to50%.
TRAINING•- ■-•
GERMANY-1976
TheGovernment adoptedalawonfinancialaidsforsettingupofnewappren­
ticeshipcentresandforthecontinuedoperationofexistingcentres.
- J
Underthisscheme,6"'Eenjoytaxconcessions worth400'000.
-1977
In1976and1977,anamountofDM180millionwassetasideforthebuilding
andcontinuedoperationofinter-company trainingcentresunderthe"Stufen-
planzuSchwerpunkten derberuflichen3ildung".Inall,10000newtraining
placeswerecreated. - .<

«3M
In1976,anamountofDM15.8millionwasalsosetasidefortraining
coursesorganized bygroupingsofartisanfirms.In1977,afurther DM
19.5millionwasearmarkedforthispurpose.
-1978
TheBoardforRationalization oftheEconomy(Rationalisierungskuratorium
derWirtschaft )launchedatrainingprogrammeconsisting ofseminarsheld
atcompanylevel.
In1978,theFederalGovernmentallocated asumofDM140milliontovoca­
tionaltrainingcoursesatinter-company level.
BELGIUM-1977 '
TheRoyalDecreeofAOctober1976reorganized trainingarrangements for
SME.Continuingtrainingnowconsistsofbasictraining (apprenticeshipor
trainingofheads/ofenterprises),extendedtraining (furthertraining,
refreshercoursesandindividual assistance )andretraining (forheadsof
enterprises ).
DENMARK-1976
Trainingistailoredtorequirements andtochangingcircumstances .In1979
and1977,attentionfocusedonproduction andmanagement techniques .
In197S,modularcoursesconcentrated oncomprehensive traininginproduc­
tion,operational andmanagement techniques .
FRANCE-1976
Increasedaidwasgrantedtochambersofcommerceandofindustryandto
industrial management consultants (ATI)whoprovideenterprises withadvice
andhelpthemsolveanydifficulties theymighthave.

ITALY-1976
Lawsrelatingtotheartis'anatwereadopted.Theyprovideforfurthervoca­
tionalforworkers,refreshercoursesinthefieldoftechnology,courses "
aimedatimprovingjproductivity ,andvocationaltrainingforheadsofartisan
■'firms.
LUXEMBOURG ^
~ ■ .. . K
-1976 1 '
Management courseswereorganized,usuallyforseveralenterprisesjointly.-
-1978 /•
ArtisanatPromotionAgency(Servicedelapromotion deI'artisanat),setup
bythecraftsmen'stradeassociation isresponsible primarilyforfuthertrain­
ingandretraining.' '
UNITE&KINGDOM '
Studieswereconductedtoascertaintrainingrequirements ,particularly in
manufacturing .
I
SPECIFIC MEASURES
a)Subcontracting -Cooperation
GERMANY
\-Cooperation betweenartisanfirmsandindustrialenterprises inthefield
ofsubcontracting hasbeensteppedup.Inparticular,the"subcontracting
contactcentres"setupbythecraftsmen'stradeassociations expandedtheir
roleasintermediaries betweenartisanfirmsandindustry.Progresswas
alsomadeindrawingupnomenclatures forlargespecialized sectorsofthe
economyandinpromotingattendance atinternational tradefairsandexhi­
bitions;

-10-
-Publication in1976ofacooperation manual(Kooperationsfibel ").,which
isaguidetocompetition lawforenterprises wishingtocooperatewith,
otherenterprises .
BELGIUM
-Thepossibility ofcreatingthelegalstatusof"enterprises personnelles
kresponsabilite limitee"isbeinglookedinto;
•*Undertheauspicesof"INTERREGIO",anon-profit organization setupatthe
instigation oftheEconomicandSocialInstituteforSmallBusinessSector
(Instituteconomique etsocialdesclassesmoyennes),subcontractors'
exchanges wereheldinLiegein1976,inGhentin1977andinBrusselsin
1978. > ' "
DENMARK
InSeptember 1978,theSteelEmployersFederation setupasubcontractors'
association (JernetsUnderleverandorklub )whichatpresentcomprises 73enter­
prises.Thedecisiontosetuptheassociation waspromptedbyamajorstudy
carriedoutinthespringof1978byaconsultancy bureauwithfinancial
helpfromthe"ProjektErhversudvikling ".Thestudy,whichwasconducted
among200subcontracting enterprises ,highlighted theneedforamorestruc­
turedformoforganization andrevealedthattheenterprises contacted were
alsopreparedtohelpfinancejointmarketing campaigns.
ITALY
-Asubcontractors' bureauhasbeensetupinTriestebythelocalchambers
ofcommerce.Itsmembership atpresentcomprises some40SME.
Theonlyotheractivities worthmentioning werethesecondsubcontractors'
FairheldinParmein1978andthethirdindustrial subcontractors' fair
heldinTarento;

*-11-
-Lawn°Z74of30April1976:measurestopromotegroupingsofSMEby
facilitating theformationandoperationofconsortiamadeupofSME
(taxreliefs;specialcredits).
LUXEMBOURG -
Thesubcontractors exchangeintheGrandDuchyofLuxembourghascompileda
catalogueofdomesticenterprisesinthebuilding,civilengineering and
wood-working sectors.*
Italsohelpswiththeworkofthegroupofexpertsthat,inassociation
withtheBusinessCooperation Centre,ispreparinganomenclature ofacti­
vitiesandmeansofproductioninthemetal-working industry.
Theexchangehasalsoplayedapartinpromotingtherecyclingofindustrial
■waste.
NETHERLANDS .• '/
Aworkingpartconsistingofindividuals fromthechambersofcommerce,the
organizations representing SMEinthemetal-working industry,theBOTU
Foundation andtheannualUtcechttradefairwhichorganizeseverytwoyears
aninternational subcontractors' fair,iscurrentlydrawingupplansfor
subcontracting activities.'
UNITEDKINGDOM '
-Subsidiesareavailableforstudiescarriedoutjointlybyfour(ormore)
SMEintothescopeforcoopération;
-The1978.Cooperative .Development AgencyActestablished abodyresponsible
forpromotingthecooperative movement.

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b)Exports
GERMANY
-Establishment ofcounter-guarantee programmes designedtomakeiteasier
forSMEtoobtainprovisional guarantees,downpayment refundguarantees
anddefinitive guaranteesforexporttransactions ;
~publication ofasmallpracticalguidetoexportingforSME.
DENMARK
-IncreaseinthestaffoftheExportCreditCouncilandlaunchingofcampaign
toinformSMEoftheexportcreditfacilitiesavailabletothem;
-Extraordinary budgetaryappropriation forexportcreditsforSME
FRANCE
-Establishment .ofaspecialguaranteefundforSMEengagedinexporting;
-Reorganization oftheFrenchforeignTradeCentre(Centrefran?aisdu
commerceexterieur).anddecentralization oftheprocedureappliedbyit;
-Specialarrangements forfinancingexport-oriented production capacities .
ITALY
AdoptionofLawn°227of24May1977containingprovisionsrelatingtoexport
creditinsurance andfinancingforgoodsandservices.
UNITEDKINGDOM
Apilotschemetoencourageenterprises tolookfornewexportmarketswas
announcedinOctober .1977.SinceJanuary1978,theDepartmentofTradehas
madeavailabletoexportersloansamountingto50%ofcostsincurred,provided

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totalinvestment amountstonotlessthanl40000overamaximumoffive
years.Loansareredeemedfromtheproceedsofsubsequent sales/withexpor­
tersalsobeingrequiredtopayapremiumtocovertheriskofnon-recovery
ofloansbytheStateintheeventoftheprojectnotbeingsuccessful.
c)Government procurement '
s .
GERMANY
-SplittingoflargecontractsbyquantityorspecialitytoallowSMEto
takepartinthetenderingprocedure;
-Inthecaseofrestrictedjinvitations totenderorprivatelynegotiated
contracts,allthecontracting authorities arealsorequiredregularlyto
inviteSMEtosubmittenders
-TenderssubmittedbygroupingsofSMEreceivethesametreatment asthose
submittedbyindividualtenderers;
-Inthecaseoflargecontractssuccessful biddersarerequiredtosubcontract
areasonableproportion oftheworktoSMEwherepossible;theyarenot
allowedto-imposelessfavourable termsonsubcontractors thanthoseagreed
batwesnthemselves zndthecontracting authority;
-Authorization tocancelinpartaninvitationtotenderifproperpartici­
pationbySMEintheperformance ofgovernment contractsrannototherwise
beguaranteed .
TheseguidelinesapplyonlyinrespectofcontractsawardedbytheFederal
authorities .Similarguidelines havebeenadoptedbysomeLander.
FRANCt
Government actionunderthedevelopment plBnsforSMEisdirectedtowards
severalobjectives :

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-greaterprotectionforsubcontractors ,e.g.byintroducing thegeneral
rulethatsubcontractors should,oncertainconditions,bepaiddirectly;
-removalofobstacles hampering accesstogovernment contracts,e.g.by
ensuringthatthedeadlinessetareadequateandbydispensing withclauses
demandingundulyhighqualifications ;
-2%increaseeachyearinthepercentageofdirectgovernment contracts
awardedtoSMEinperiod1977-81;
-speediersettlements,e.g.paymentsonaccounttobeauthorizedwithin45
.days;
-provisionoffullerinformation .
ITALY
Article20ofLawn°584of8August1977stipulatesthatenterprises which
havejoinedtogetherandhavegivenoneoftheirnumberaspecialcollective
mandatetorepresent themmaysubmittendersforgovernment contracts.In
addition,enterprises statingawishtojointogethertoforma"temporary
association"maybeinvitedtotenderortotakepartinprivatenegotiations .
InItaly,SMEaretreatedlessfavourably thanproduction orworkcooperatives ,
inthat,forexample,certaincontractsputupfortenderarereservedfor
thelatter.
LUXEMBOURG
Acollectivebidmaybesubmittedbytwoormoretraderswho,providedthey
satisfytheconditionslaid|dowbylaw,mustthenenterintoajointandseveral
commitment andappointanauthorized representative .

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UNITEDKINGDOM .•
Measuresthatmayfacilitate accessbySMEtogovernment contractsinclude
thefollowing : •
-Establishment ofinformation centresforSMEwishingtoobtaindetails
concerning government contracts andtheconditions theymustsatisfyin
ordertoappearonthelistsofapprovedenterprises ;
-Publication ofa"Guidetogovernment contractsforsuppliesandservices
bytheCBI(Confederation ofBritishIndustry),inconjonction withthe
publicauthorities .Theguideprovidesinformation onthecontractsthat
maybeofparticularinteresttoSME.