WRITTEN QUESTION E-0351/98 by Amedeo Amadeo (NI) to the Commission (17 February 1998)

Subject: SMEs and RTD (research and technological development)

'The impact on SMEs of the steady, widespread reduction in funds allocated to research and technological development in the EU (at Community and national level)' has been considered in document CES 986/97.

Given that competition is growing keener and strategies are being internationalized as the economy becomes increasingly more globalized, SMEs are obliged to innovate. Consequently, in addition to their other needs, they have to have access to new technologies or develop the technologies they require.

1. Will the Commission devise a new approach distinguishing between small enterprises with a high technological capacity or 'vanguard' enterprises with untapped applied research potential and the broad mass of enterprises that merely use the final products of RTD?

2. When drawing up Community programmes, will it give priority to the needs of small enterprises with a high technological capacity and pursue a similar policy in connection with the Structural Funds in order to encourage economic and social cohesion?

Answer given by Mr Papoutsis on behalf of the Commission (3 April 1998)

The Commission is aware of the heterogeneity of small and medium-sized enterprises (SMEs) in terms of research and technological development (RTD) needs and capabilities and of specific problems facing new technology-based firms and small innovative firms.

The Commission agrees that high-growth firms deserve special attention owing to their important role in facilitating growth-enhancing structural changes in product markets through the creation of niches and in creating opportunities for labour skills and mobility. However, obstacles limit the ability of individuals to start and develop innovative new business, including administrative complexity, inadequate access to finance and lack of human resources and managerial competences.

In the third multiannual programme in favour of SMEs, specific means of support for this category of SMEs are undertaken. An important example is the seed capital pilot scheme (creation of 23 investment funds). It aims to help channel private capital towards the high-risk phase of seed finance or of rapid growth. Most of the effort required is at national or regional level. However, a set of actions is being developed at Community level, in particular as part of the implementation of the first action plan for innovation and the third multinannual programme in favour of SMEs (Council Decision 97/15/EC) ((OJ L 6, 10.1.1997. )).

For instance, within the action plan for innovation, the Commission has acknowledged the need to support the creation of high-tech and high-growth companies. A round table held in Paris (9 December 1997) on 'innovation, the creation of businesses and jobs' launched a consultation process on helping the creation and growth of technology-based firms. It has involved high-tech company managers, financiers, policy-makers, university research centre managers, as well as Member States and Community officials. Working groups have been subsequently constituted to look at specific aspects of the creation and growth of high-tech firms, in order to identify critical issues and good practice and define possible action, in particular at Community level. The result of this exercise will be discussed at a European high-tech entrepreneurs forum in Vienna in November 1998.

Furthermore, within the innovation programme (third activity of the fourth framework programme - Parliament and Council Decision No 1110/94/E ((OJ L 126, 18.5.1994. ))), the Commission has launched, in collaboration with the European Investment Fund, the I-TEA pilot project, which aims to attract venture capital towards the initial phases of innovative high-tech projects. I-TEA helps the managers of venture capital funds to acquire a lasting ability to assess and manage this kind of project.

These efforts will be pursued within the fifth framework programme, notably through the implementation of the horizontal programme 'Innovation and Participation of SMEs'.

Furthermore, in the Commission proposal concerning the 5th framework programme for research, technical development and demonstration activities (1998-2000) ((COM(98) 8 final. )), special attention is given to SMEs. In this context, a specific RAT programme on 'Innovation and the participation of SMEs' is foreseen. Besides high-tech companies, special attention will be given to SMEs without adequate research capacities. Moreover, the Commission intends to attach major importance to high-tech SMEs in its forthcoming proposals for Regulations on the structural funds.