Opinion of the Committee of the Regions on the "Green Paper on Entrepreneurship in Europe and the Communication on a better environment for companies"
Date: 2003-07-02
Institutions: European Committee of the Regions
Subjects: action programme, aid to undertakings, business start-up, entrepreneurship, type of business

24.10.2003

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Official Journal of the European Union

C 256/43

Opinion of the Committee of the Regions on the ‘Green Paper on Entrepreneurship in Europe
and the Communication on a better environment for companies’

(2003/C 256/08)

THE COMMITTEE OF THE REGIONS,

having regard to the European Commission Green Paper on Entrepreneurship in Europe (COM(2003)
27 final) and the Communication on A better environment for companies (COM(2002) 610 final);

having regard to the decisions of the European Commission of 2 October 2002 and 8 January 2003 to
consult it on these subjects, under the first paragraph of Article 265 of the Treaty establishing the
European Community;

having regard to the decisions of its President of 5 August 2002 and of 21 January 2003 to instruct its
Commission for Economic and Social Policy to draw up an opinion on these subjects;

having regard to its opinion on the Report from the Commission to the Council, the European Parliament,
the Economic and Social Committee and the Committee of the Regions on Creating an entrepreneurial
Europe — The activities of the European Union for small and medium-sized enterprises (SMEs) (CdR
199/2001 fin) (1);

having regard to its opinion on the Communication from the Commission — Challenges for enterprise
policy in the knowledge-driven economy and the proposal for a Council Decision on a multi-annual
programme for enterprise and entrepreneurship (2001-2005) (CdR 185/2000 fin) (2);

having regard to its opinion on a Report of the Business Environment Simplification Task Force
(BEST) and the Commission Communication promoting entrepreneurship and competitiveness — The
Commission’s response to the BEST Task Force report (CdR 387/98 fin) (3);

having regard to its draft opinion (CdR 82/2003 rev.) adopted unanimously on 29 April 2003 by its
Commission for Economic and Social Policy (rapporteur: Ms Constance Hanniffy, Member of Offaly
County Council (IRL-EPP)),

adopted the following opinion unanimously at its 50th plenary session, held on 2 and 3 July 2003
(meeting of 2 July).

1. The Committee of the Regions’ views

considers that the value of the Green Paper will be in initiating
debate and broad-based consultation amongst policy-makers;

The Publication of the Green Paper

The Committee of the Regions

welcomes the publication of

1.1.
the Green Paper on
Entrepreneurship in Europe as a good initiative, as it provides
a new focus to the development of an integrated policy on
entrepreneurship;

recognises that entrepreneurship is nurtured by many
1.3.
policies including cultural development, employment and
social cohesion polices and that support for SMEs is channelled
through various funding streams including the Structural
Funds, European Charter for Small Enterprises and the multi-
annual Programme for Enterprise and Entrepreneurship.

1.2.
considers that the Green Paper synthesises clearly the
key issues and challenges regarding the importance of the EU
developing entrepreneurship and in this regard the Committee

The Committee of the Regions

Points of Emphasis in the Green Paper

(1) OJ C 107, 3.5.2002, p. 64.
(2) OJ C 22, 24.1.2001, p. 10.
(3) OJ C 293, 13.10.1999, p. 48.

1.4.
is disappointed that the Green Paper has not outlined
sufficiently the value of the local and regional dimension to
contributing to the development of entrepreneurship in the
EU. The Committee feels that account should be taken of the
support that local and regional authorities provide and also of

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the regional variations that exist, especially within the Member
States, on the level of entrepreneurship and the need to address
certain weaknesses at the sub-national level;

the active involvement of their local and regional authorities
will have a greater impact than just purely national initiatives;

1.5.
is of the view that the Green Paper could place greater
emphasis on addressing causes of, and lessons from, new
business failure. In regions of the EU, upwards of 50 % of new
businesses fail within four years of establishment;

1.6.
considers that a certain distinction should be made in
the Green Paper and during the on-going consultation process
between on the one hand the Lisbon Council objectives, which
act as the main point of reference for the Green Paper and
require more immediate and short-term policy options in
order to create the ‘some 15 million new jobs by 2010’ and
on the other hand the more aspirational aspects of the Green
Paper such as the need to change attitudes to entrepreneurship
and the provision of education programmes, which will take a
generation or more to take effect and have an impact
on entrepreneurial development. The Committee therefore
considers that this distinction should have a bearing on the
prioritisation of actions that have to be taken at the EU and
other levels;

feels that policy considerations need to make a distinc-
1.7.
tion between entrepreneurs who may be growth and inno-
vation oriented and people who own or manage small
businesses, who maybe more conservative and reluctant to
grow their business and between enterprises that have limited
growth potential. The Committee points out that it made a
similar point previously, when making its opinion on the
Multi-annual Programme for Enterprise and Entrepreneurship
(2001-2005);

notes with interest the comparisons made with the US
1.8.
imports a very
experience but would emphasise that
large proportion of key sector entrepreneurs, such as Indian
nationals in the ICT sectors. The Committee feels therefore
that an additional element which the Commission may need
to address in the context of the Green Paper is the employment
and immigration policies in the EU.

it

Implementing Policy for Entrepreneurship

The Committee of the Regions

agrees with the Commission’s view that policy can
1.9.
contribute to boosting levels of entrepreneurship but would
underline that coordinated action by the Member States, with

1.10.
believes that the implementation of policy to encour-
age entrepreneurship is enhanced by the development of
benchmarking and the exchange of good practice. However,
the Committee is cautious of an over-reliance on the setting of
targets for the achievement of objectives so that performance
gaps can be made more transparent, as they may become a
process in themselves, with the result that the key objectives
may be lost sight of;

1.11.
welcomes the development of an action plan for
entrepreneurship. However, the Committee would emphasise
the need to ensure proper coordination between such National
Action Plans and the National Action Plans for employment,
which will continue to have an entrepreneurship element;

notes that

there are merits to the exchange of
1.12.
best/good practice through inter-regional and trans-national
initiatives but that in many cases ‘exchange’
is often not
enough; it is rather the way in which this practice is applied
and tailored to different circumstances which provides the real
benefits.

Providing a Support Environment

The Committee of the Regions

1.13.
acknowledges that local and regional authorities have
a role to play in contributing to the supportive environment
for entrepreneurs, in terms of the reduction of bureaucracy,
the establishment of easy payment and e-administration
schemes, in providing incentives through local taxation —
such as rates and charge reductions — and in ensuring equal
access for SMEs to public procurement processes and public
contracts;

1.14.
feels that education and training must develop cre-
ativity, flexibility and imagination in students of all disciplines
as these are crucial to developing entrepreneurs; in particular
the Committee considers that there should be familiarisation
at the primary level and that enterprise training should be
included in the teaching of non-business disciplines, such as
arts, sciences and the trades;

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1.15.
also feels that the provision of training for entreprene-
urs must be of a high quality and be flexible and relevant to
their needs. In this context the issue of the qualifications,
experience and training of training providers is vital and needs
to be addressed in all Member States;

2. The Committee of the Regions’ Recommendations

The Committee of the Regions

underlines, as it has in previous opinions, the role that
1.16.
local and regional authorities play in providing a supportive
environment for enterprises by nurturing networks of existing
SMEs, by providing coordinated information through ‘one-
stop-shops’, by providing facilities and services for entrepre-
neurs, by actively developing innovative ICT use to overcome
barriers to entrepreneurial development, by promoting local
champions as best practice and stimulants to developing
an entrepreneurial culture and in promoting and actively
participating in corporate social responsibility and social
economy activities;

recognises that local and regional financial instru-
1.17.
ments and responses are effective in meeting business needs.
The role of regional banks, local venture capital schemes, risk
seed capital provision and other local
initiatives are of
particular importance, which need to be emphasised. In this
regard the support from ERDF Article 4 and ESF Article 6
could be enhanced to improve the assistance to SMEs;

suggests that the local and regional authorities’ role
1.18.
in promoting social cohesion is central to the creation of
entrepreneurs. Local targeted actions catering for long-term
unemployed, older people, youth, women and ethnic min-
orities can allow entrepreneurs to develop capacity and reach
their potential. The use of the social economy to deliver
local services by local and regional authorities should be
strengthened as a means of developing entrepreneurship;

2.1.
encourages the Commission to launch an information
campaign at the local and regional level across the European
Union and Accession countries in order to promote interest
among young people in creating enterprises, to showcase
local/regional best practice and to highlight the range of
supports available. The Committee considers that local and
regional authorities would be suitable and willing partners in
such a campaign;

2.2.
suggests that a key component of the action plan for
entrepreneurship must develop the cross-functional approach,
by forging collaboration between business,
the education
sector and other players, including local and regional auth-
orities, and by linking capital with ideas and innovators with
enterprises, using imaginative and flexible support mechan-
isms;

recommends that particular attention be paid to the
2.3.
difficulties encountered by women, ethnic minorities and older
members of society in establishing enterprises;

2.4.
proposes that entrepreneurship and the supporting
policies of R&D, innovation and competitiveness should be
central to the debate on the future of EU Regional Policy and
the Structural Funds, as the Structural Funds have been
successful in their application. However, the Committee regrets
that the Structural Funds do not make up a significant part of
the support structure for SMEs, especially given that SMEs in
many peripheral regions of the EU continue to face difficulties
in terms of access to markets, to communications technology,
to business expertise and to specialist support services;

2.5.
considers that the BEST Reports and the European
Charter for Small Enterprises and the pledges it contains will
be useful tools for the Accession Countries in their efforts to
build a pro-enterprise environment. It would therefore call on
the Commission to undertake a local and regional bench-
marking study to highlight best practice and also provide
potential models that could be tailored for the Accession
Countries;

urges

1.19.
regional and
the Commission and local,
national authorities to use self-employment as a way of
achieving social and labour market inclusion of groups that
face particular inclusion difficulties. It would be helpful in this
context to introduce a specific programme to promote the
launching of awareness-raising campaigns designed to foster
entrepreneurship in these groups.

2.6.
urges the Commission to draw up a Communication
setting out the local and regional authorities’ role and chal-
lenges in the sphere of enterprise policy and hence underlining
the importance of a local and regional dimension in enterprise
and entrepreneurial policy;

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2.7.
encourages the Commission to promote the establish-
ment of Entrepreneurs’ Support Panels and other structural
networks at the regional level to provide entrepreneurs at
start-up phases with access to specific and customised forms
of business expertise. The Committee would welcome further
support initiatives in the areas of top quality training for
training providers, awards schemes at regional levels, linkages
schools and enterprises and partnerships
between local
between regional enterprise clusters and universities and
research institutes;

highlights the importance of external support in turn-
2.8.
ing innovative ideas into commercial businesses, with the
provision of coordinated and easily accessible information on
available services and support for entrepreneurs, with access
to independent advice, mentoring, networking and partnering
in order to minimise potential for failure and unnecessary
delays and frustrations. While at present much of this assist-
ance may be provided by a number of agencies, which should
receive more support, there is considerable scope for local
and regional authorities to coordinate these services. The
Committee would therefore stress that it would be worthwhile
stepping up and providing financial support for initiatives
such as business incubators, and assistance and mentoring for
young entrepreneurs;

2.9.
would welcome the development of a dedicated sup-
port programme to local and regional authorities to encourage
linkages and networking among and between enterprises, local
universities and research institutes, businesses and business-
support advisors. In this regard it would further advocate
support measures to facilitate exchanges/placements for entre-
preneurs/potential entrepreneurs to get first hand experience
of best practice, studying potential new markets, source
materials, develop foreign language and other business skills;

performance gaps between Member States and regions but
would caution against the setting of too many quantitative
targets which would result in the inevitable extra bureaucracy
which such processes involve;

2.11.
advises that a better and a more comprehensive set of
statistics be developed to allow better analysis of trends in the
SME sector, as most benchmarking studies focus on the
national level and on broad trends such as company births
and deaths. The Committee feels that such statistics should
provide for a better comparison at the regional level, including
gender and ethnic minority-involvement comparisons;

2.12.
calls on the Commission to maximise the synergies
between the European Employment Strategy and the action
plan on entrepreneurship. It would further encourage the
Commission to learn from the EES and its guidelines and in
particular from the increasing emphasis that these guidelines
place on the local and regional dimension (1);

2.13.
underlines the need to differentiate between company
type and size and between new entrepreneurs and existing
enterprises in drawing up an action plan for entrepreneurship.
In this regard it calls for the improvement in the regulatory
framework for SMEs, especially in drawing a distinction of
company type and size under company law and in the need to
encourage entrepreneurship using fiscal and taxation policy;

funding for new business start-ups,

would support a re-examination of existing sources
2.14.
of
in particular the
availability of high-risk capital to identify funding gaps and
identify best practice and also calls on the Commission to
ensure a coordinated approach across the relevant funding
streams and policies at the EU level.

2.10.
welcomes the speedier implementation of measures
to encourage entrepreneurial activity and action to close

(1) Commission’s Communication on ‘Acting Locally for Employ-
ment — A Local Dimension for the European Employment
Strategy’ (COM(2000) 196 final).

Brussels, 2 July 2003.

The President

of the Committee of the Regions

Albert BORE