WRITTEN QUESTION E-3132/98

by Raimo Ilaskivi (PPE) to the Commission

(16 October 1998)

Subject: Support for the internationalisation of small undertakings

The economic importance of small- and medium-sized undertakings (SMUs) has been recognised in the European Union. Over the last 10 years, the Union has encouraged the development of SMUs and their activities via a variety of programmes. However, there are still many problems to be resolved in connection with the internationalisation of SMUs. If they wish to take part in international trade, undertakings need intellectual and economic resources. In the case of SMUs, such resources are normally in short supply.

A Finnish SMU has a much smaller domestic market available to it than, for example, a German SMU. If the turnover of a Finnish SMU on its domestic market is, for example, ECU 2 million, the turnover of a corresponding German undertaking may be ECU 32 million. These figures clearly illustrate that the German undertaking has a much greater chance than its Finnish counterpart of securing international business for example, within the EU.

How does the European Commission intend, in connection with Community SMU programmes, to take account of the fact that the scope for involvement in international trade inside and outside the Union is more restricted for SMUs in smaller Member States than for their counterparts in the larger Member States?

Answer given by Mr Papoutsis on behalf of the Commission

(13 January 1999)

The Commission agrees with the Honourable Member about the limited availability of human, financial and economic resources for small and medium sized enterprises (SMEs).

However, the Commission cannot share the premise of this question, that access to foreign trade is more restricted for SMEs from smaller Member States. Neither of the hypothetical Finnish and German SMEs operates solely in its domestic market. They both benefit from the existence of the European single market and the European economic area. Community SME programmes were designed in the first instance to help SMEs to integrate into the single market in order to derive maximum benefit from its opportunities. As a consequence, they do not give any special focus to the needs of smaller Member States.

In fact, the size of an SME in an open economy such as the European single market depends on several factors including the number of businesses and inhabitants, the degree of internationalisation of the enterprises, access to finance, the overall business environment, regional, national and European business support policies, entrepreneurial behaviour aiming for growth, and membership of subcontracting networks, but only to a limited degree on the size of a Member State.

On the other hand, the Commission agrees that SMEs located in Member States on the periphery of the Community have to overcome additional transport and communications costs which hamper their capacity to exploit fully the advantages of the single market. Nonetheless, it is generally accepted that businesses in smaller Member States, irrespective of their size, are more outwardly oriented than their counterparts in larger Member States. In addition, businesses from smaller Member States tend to have a better knowledge of one or more foreign languages. Thus they are generally able to participate succesfully in the growth of international trade (both within and outside the Community), with a growth rate which exceeds that of their national markets.