Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions -  Implementing the community Lisbon programme - Modern SME policy for growth and employment
Date: 2005-11-10
Institutions: European Commission
Subjects: EU employment policy, EU programme, European Employment Strategy, small and medium-sized enterprises

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 10.11.2005 
COM(2005) 551 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

IMPLEMENTING THE COMMUNITY LISBON PROGRAMME 
MODERN SME POLICY FOR GROWTH AND EMPLOYMENT 

EN 

   EN 

 
 
 
  
TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

4. 

Introduction .................................................................................................................. 3 

Giving fresh impetus to SME policy............................................................................ 3 

Specific action to be taken ........................................................................................... 5 

Promoting entrepreneurship and skills......................................................................... 5 

Improving SMEs’ access to markets............................................................................ 6 

Cutting red tape. ........................................................................................................... 7 

Improving SMEs’ growth potential. ............................................................................ 9 

Strengthening dialogue and consultation with SME stakeholders............................. 10 

Conclusion ................................................................................................................. 11 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

IMPLEMENTING THE COMMUNITY LISBON PROGRAMME 
MODERN SME POLICY FOR GROWTH AND EMPLOYMENT 

1. 

INTRODUCTION 

Small  and  medium-sized  enterprises  (SMEs),  defined  as  having  fewer  than  250 
employees1, make up a large part of Europe’s economy: there are some 23 million of 
them  in  the  European  Union,  providing  around  75  million  jobs  and  accounting  for 
99% of all enterprises. SMEs are a key part of European industry, not least as they 
contribute  up  to  80%  of  employment  in  some  industrial  sectors,  such  as  textiles, 
construction  or  furniture.  SME  are  a  major  source  of  entrepreneurial  skills, 
innovation and contribute to economic and social cohesion. 

The new Partnership for Growth and Employment underlines in particular the need 
to improve the environment for business, take SMEs’ concerns on board and provide 
them  with  appropriate  support.  Indeed,  SMEs  are  indispensable  for  the  delivery  of 
stronger,  lasting  growth  and  more  and  better  jobs.  Furthermore,  to  revitalise  the 
economy,  Europe  needs  more  people  willing  to  become  entrepreneurs,  hence  the 
importance of promoting entrepreneurial culture. 

Therefore,  SME  friendly  policies  both  at  Community  level  and  in  Member  States 
become even more important to unlocking the EU`s potential. For these reasons, the 
Commission is taking action to keep SMEs high on the political agenda and proposes 
a  new  start  for  SME  policy,  to  be  implemented  in  close  partnership  with  Member 
States.  This  Communication  provides  a  coherent  framework  for  the  various 
enterprise policy instruments  and aims at  making  the  “Think  Small  First”  principle 
effective across all EU policies. It highlights the major challenges SMEs face daily, 
proposes  new  actions  to  strengthen  their  capacity  to  sustain  in  the  market,  to  grow 
and  to  create  jobs  and  new  ways  to  enhance  dialogue  and  consultation  with  SME 
stakeholders.  By  doing  so,  it  clearly  supports  the  implementation  of  the  Lisbon 
Integrated Guidelines2 and the Community Lisbon Programme3. 

2. 

GIVING FRESH IMPETUS TO SME POLICY 

This Communication sets out a number of objectives and actions specifying how to 
make  the  measures  of  the  Community  Lisbon  programme  beneficial  to  SMEs.  In 
particular,  it  provides  guidance  on  how  to  implement  the  Lisbon  integrated 

1 
2 

3 

See Commission Recommendation 2003/361/EC 
Council  Recommendation  2005/601/EC  on  the  broad  guidelines  for  the  economic  policies  of  the 
Member States. 
Communication  from  the  Commission:  Common  Actions  for  Growth  and  Employment:  The 
Community Lisbon Programme, COM (2005) 330 

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guidelines in a way that serves SMEs. This is notably the case for guidelines 14 and 
15,  which  relate  to  better  regulation,  a  more  entrepreneurial  culture  and  a  more 
competitive  and  supportive  environment  for  SMEs.  This  should  be  particularly 
helpful  for  the  implementation  of  the  national  reform  programmes  that  Member 
States have committed themselves to undertake. Indeed, the success of the new SME 
policy  depends  primarily  on  action  by  Member  States  as  they  retain  the  main 
competence  in  enterprise  policy,  while  the  Community  policy  framework  should 
provide support and complement their efforts. 

This  Communication  creates  a  policy  framework  for  SME  actions  and  integrates 
the  objectives  of  the  existing  enterprise  policy  instruments,  in  particular  the 
European  Charter  for  Small  Enterprises  and  the  Entrepreneurship  Action  Plan  to 
build  up  synergies  and  to  enhance  transparency  of  the  European  SME  policy 
approach.  In  particular,  the  integration  of  the  Charter  reporting  within  the  Lisbon 
governance cycle will increase visibility and consistency between the various actions 
in  favour  of  SMEs.  It  will  also  contribute  to  improving  the  synergies  between  the 
microeconomic reforms to be undertaken, i.e. making Europe more innovative and a 
more  attractive  place  to  invest  and  work.  SME  policy  is  transversal  by  nature  and 
calls for reinforcing the SME dimension across a wide range of Community policies. 
As  an  example,  the  SME  dimension  will  be  reflected  in  the  follow-up  of  the 
Communication “Towards a more integrated approach for industrial policy”.4 

The new approach is based on a comprehensive view of SMEs’ role in society that 
highlights their importance as an important factor of economic and social cohesion at 
local  and  regional  level.  Moreover,  most  SMEs  are  committed  to  corporate  social 
responsibility, which allows them to improve their performance and competitiveness 
while  having  a  positive  impact  on  the  local  community  and  the  environment.  Big 
companies also have a responsibility towards SMEs as sub-contractors, e.g. in the car 
industry.  The  Commission  will  connect  to  businesses,  both  to  promote  EU 
programmes  and  to  channel  SMEs’  reactions  towards  policy-makers.  Community 
business  support  networks,  such  as  Euro  Info  Centres,  play  an  essential  role  in  the 
successful implementation of SME policy. 

SMEs  are  very  different  in  nature:  some  seek  rapid  growth  and  bigger  markets; 
others  are  only  active  in  local  or  regional  markets.  As  this  diversity  has  to  be 
reflected  in  policy-making,  the  new  approach  embraces  initiatives  and  actions  to 
unlock the full potential of all types of enterprises ranging from start-ups and high-
growth ‘gazelles’ to traditional enterprises, including craft sector, micro-enterprises, 
social economy enterprises and family SMEs. 

Structural  changes  in  the  economy  over  the  last  two  decades  have  created  new 
opportunities for SMEs which are often flexible, adaptable and dynamic enterprises. 
Compared  to  large  enterprises,  they  may  have  advantages  in  niche  markets, 
geographically  restricted  markets,  or  in  producing  lower  volume  or  specialised 
products.  However,  SMEs  suffer  disproportionately 
legislative  and 
administrative burdens compared with big businesses. Increased competitive pressure 

from 

4 

Communication  from  the  Commission:  Implementing  the  Community  Lisbon  programme:  A  policy 
framework to strengthen EU manufacturing – towards a more integrated approach for industrial policy, 
COM (2005) 474 

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combined  with  market  imperfections  such  as  limited  access  to  finance,  research, 
innovation,  networks  and  supply  chains  may  also  hinder  their  growth.  SMEs  are 
often vulnerable to rapid economic changes and to competitive pressure. Moreover, 
entrepreneurs  are  generally  insufficiently  aware  of  activities  undertaken  to  consult 
and support them, in particular at European level. 

Support  to  SMEs  will  be  provided  by  the  Community  programmes  for  enterprise, 
i.e.  the  Multiannual  Programme  for  Enterprise  and  Entrepreneurship  and  the 
forthcoming  Competitiveness  and  Innovation  framework  Programme  (CIP). 
However, as SME policy is often translated by initiatives conceived and delivered at 
local and regional levels, other important sources of funding must be used, such as 
funds for cohesion policy. 

Structural funds are playing a key role in promoting entrepreneurship and skills and 
improving SMEs growth potential, e.g. by supporting the technological development 
of SMEs, providing business support services, and strengthening SME cooperation. 
Structural funds have provided around € 21 billion to SMEs in the period 2000-2006 
and the orientations suggested in the Strategic Guidelines for cohesion reinforce this 
commitment.5 The Strategic Guidelines for rural development highlight the role that 
support  for  the  creation  of  micro-enterprises  can  play  in  the  diversification  of  the 
rural economy.6 

3. 

SPECIFIC ACTION TO BE TAKEN 

3.1. 

Promoting entrepreneurship and skills. 

The  EU  is  not  fully  exploiting  its  entrepreneurial  potential  and  is  not  producing 
enough  start-ups.  There  are  still  too  many  factors,  like  the  imbalance  between  risk 
and  reward,  weak  social  security  coverage,  and  ignorance  of  what  entrepreneurs 
really do, that tip the scales in favour of being employed rather than becoming self-
employed.  The  Commission  will  step  up  its  efforts  to  increase  the  appreciation  of 
entrepreneurs  in  society,  promote  greater  awareness  of  a  career  as  an  entrepreneur, 
foster  entrepreneurial  mindsets 
responsible 
including 
entrepreneurship  practices.  The  increasingly  important  role  of  entrepreneurship 
education will be underlined by a forthcoming Commission Communication on this 
key  area.  At  the  same  time,  structural  funds  will  contribute  directly  to  promoting 
entrepreneurship by investing in actions such as increasing the range and quality of 
business  advisory  services  and  shared  business  services.  Last  but  not  least,  most 
Member States could usefully take measures to reduce the time and costs involved in 
setting up a new company. 

the  promotion  of 

The Commission  will  strengthen its support for activities to reduce the burden of 
risk  intrinsically  linked  to  entrepreneurship.  It  will  take  initiatives  to  tackle  the 
negative effects of business failure and examine the possibility of improving social 
security  schemes  and  bankruptcy  procedures.  For  example,  the  Commission  has 
launched a pilot project to improve the transfer of knowledge and core competencies 
that are essential for the successful transfer of businesses. The Commission is also 

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COM (2005) 299 
COM (2005) 304 

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planning  a  specific  Communication  on  business  transfers,  to  highlight  their  crucial 
role in maintaining millions of jobs in the EU. 

To  narrow  the  skills  gap,  all  partners,  and  particularly  enterprises,  should  be 
involved  in  the  development  and  definition  of  training  courses  and  methodologies. 
The Commission considers that Member States should review their educational and 
training policies to make them more responsive to current and anticipated changes in 
the  labour  market.  The  comprehensive  lifelong  learning  national  strategies,  to  be 
established  by  Member  States  by  2006  in  the  framework  of  the  Education  and 
Training  2010  Programme,  and  the  Community  Action  Programme  in  the  field  of 
Lifelong Learning will facilitate the adaptation of people working in SMEs to labour 
market needs and the promotion of entrepreneurial skills, including “risk taking” at 
all  levels  of  education  and  training.  Furthermore,  the  Commission  is  financing 
actions  to  reduce  skills  gaps  by  improving  business  related  training  and  lifelong 
learning under the European Social Funds. 

The Commission is working closely with national authorities to address those areas 
where  the  needs  of  women  entrepreneurs  are  still  not  being  sufficiently  met, 
notably  in  access  to  finance  and  entrepreneurial  networks.  With  regard  to 
entrepreneurs, such as young people, older workers or those from ethnic minority 
communities, the Commission will continue to encourage networking among policy-
makers to identify and promote good practices to assist them. 

3.2. 

Improving SMEs’ access to markets. 

SMEs do not fully benefit from the opportunities provided by the Internal Market, 
largely  because  of  the  lack  of  information  on  business  opportunities,  despite  long-
standing  efforts  of  the  Commission  and  Member  States  to  facilitate  and  improve 
cross-border  activities  within  the  EU.  In  particular,  SMEs  are  not  always  aware  of 
the opportunities offered by public procurement markets, have limited resources to 
be  able  to  participate  in  the  standardisation  process,  or  to  take  advantage  of 
Intellectual  Property  Rights  (IPR),  and  have  difficulty  in  complying  with 
complicated  and  different  tax  systems.  SMEs  need  to  be  encouraged  to  go 
international,  as  this  often  leads  to  a  better  competitive  position  and  enhances 
companies’ growth and productivity. 

The Commission insists on stepping up efforts to complete the Internal Market and 
calls on Member States to contribute to this common objective. The Commission will 
launch  a  new  initiative  examining  how  public  policies  can  help  SMEs  to  benefit 
more from the European market. In parallel, the Commission will carry on working 
on  a  legal  form  of  EU  enterprise  which  would  offer  SMEs  an  incentive  to  build 
cross-border partnerships. 

Public  procurement  contracts  amount  to  more  than  €  1.5  trillion,  or  16%  of  the 
EU’s GDP.7  The implementation of the new Public Procurement Directives, which 
is due by 31 January 2006, will further modernise and simplify award procedures, in 
particular  by  fostering  e-procurement  and  by  allowing  for  “green”  public 

7 

Report on the functioning of Community product and capital markets, COM (2002) 743 

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procurement. This is likely to benefit SMEs, including eco-innovative SMEs, which 
should gain from the new environmental purchasing policies. 

The Commission is taking action to promote SME participation in standardisation 
and to raise SMEs’ awareness of standards. There is scope for more comprehensive, 
long-term  action  to  ensure  that  SMEs’  interests  are  fully  taken  into  account  in  the 
standardisation  process  and  that  they  regularly  obtain  updated  information  on  new 
standards  in  a  concise  and  understandable  format.  This  is  also  an  issue  on  which 
Member States should be active, bearing in mind that the development of standards 
results from discussions at European level that are based upon national positions. 

To decrease the high tax compliance costs often involved in setting up a branch or a 
subsidiary  in  another  Member  State,  the  Commission  intends  to  propose  a 
Communication  on  a  pilot  project  on  Home  State  Taxation  to  allow  SMEs  to 
compute the taxable profits of their foreign branches or subsidiaries on the basis of 
the rules in their home State. 

The Commission intends to propose new initiatives for the Euro Info Centre (EIC) 
network  to  encourage  SME  participation  in  business  cooperation  and  matchmaking 
events, especially in border regions. Moreover, trading barriers to overseas markets, 
such as import and customs requirements, can impose a disproportionate burden on 
SMEs.  As  part  of  the  proactive  dialogue  with  all  its  major  trading  partners  both  at 
bilateral  and  multilateral  level,  the  Commission  will  further  seek  to  reduce  the 
obstacles facing European exporters and to promote greater access to international 
markets.  This  should  primarily  be  pursued  through  an  ambitious  strategy  in  the 
Doha Development Round. Other steps could be to provide market information and 
encourage SMEs to conclude joint venture agreements with enterprises in developing 
countries. 

The EU Market Access Strategy will be stepped up as to registering and assessing 
the  impact  of  complaints  expressed  by  EU  companies  and  ensuring  an  adequate 
follow-up.  The  Commission  also  aims  to  develop  SME  policy  and  improve  the 
business environment in non-EU countries, in particular the candidate countries and 
the partners of the European Neighbourhood Policy, through policy cooperation and 
aid programmes. 

3.3. 

Cutting red tape. 

At  Community  level,  the  Commission  is  determined  to  integrate  the  ‘Think  Small 
First’  principle  in  all  Community  policies  and  to  push  for  regulatory  and 
administrative simplification. In identifying the appropriate simplification measures, 
attention  should  be  paid  to  ensuring  that  regulation  is  proportional  to  the  principle 
objectives  pursued  taking  into  account  the  social,  environmental  and  economic 
aspects. 

Better  regulation  is  of  particular  importance  to  SMEs,  as  they  have  limited 
resources  and  insufficient  expertise  to  comply  with  often  complex  rules  and 
regulations.  Evidence  suggests  that  SMEs  may  also  suffer  disproportionately  from 
improve  framework  conditions  for  growth  and 
administrative  burdens.  To 

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employment, the Commission will simplify Community rules and legislation, as set 
out  in  the  recent  Communication  on  simplification  of  the  regulatory  environment.8 
As simplification is a shared responsibility, Member States need to address it in their 
national legislation, as well as transpose EU rules in the simplest way possible. 

The Commission will examine the SME dimension when assessing, at an early stage, 
the  impact  of  EU  legislation  and  ensure  that  SMEs’  needs  are  properly  and 
systematically  taken  into  account.  When  preparing  forthcoming  legislation,  the 
Commission  will  ensure  that  it  does  not  inhibit  SMEs’  growth  and  innovation 
potential  and  will  systematically  examine  all  options,  including  exemptions,  where 
appropriate.  Both  at  national  and  EU  level,  appropriate  measures  to  lighten  the 
legislative  burden  on  SMEs  should  always  be  considered  and  it  may  be  useful  to 
introduce  specific  provisions  for  SMEs.  These  could  include  longer  transition 
periods,  reduced  fees,  simplified  reporting  requirements,  even  exemptions,  or 
assistance,  like  helpdesks.  For  example,  the  revised  EU  pharmaceutical  legislation 
provides for significant fee reductions, deferrals and special administrative assistance 
for  SMEs  developing  medicines.  The  Commission  will  also  ensure  that  SME 
stakeholders are properly consulted. 

The  Commission  is  also  paying  increasing  attention  to  barriers  related  to  the 
administrative  burden  which  hinder  SMEs  in  creating  jobs  and  invites  Member 
States as a matter of urgency to examine the results of a recent report on one-person 
enterprises, and implement its recommendations on facilitating recruitment by small 
companies9. 

Sometimes the use of alternative policy instruments, like standards and voluntary 
agreements, needs to be considered with a view to complementing and supporting the 
implementation of existing legislation. When these are being envisaged, the drafting 
process should allow SME representatives to participate fully. 

The  work  to  simplify  the  rules  related  to  SMEs’  participation  in  Community 
programmes  will  be  carried  on  vigorously  by  reducing  the  complexity  of 
procedures,  improving  information  to  SMEs  on  existing  programmes  and  ensuring 
that evaluation procedures take into account the particularities of SMEs. In addition, 
the  Commission  is  considering  other  measures,  such  as  introducing  pre-assessment 
procedures,  encouraging  the  participation  of  SME  consortia,  simplifying  financial 
requirements  for  SMEs  and  setting  targets  for SME  participation. The Commission 
will  also  ensure  adequate  follow-up  of  the  measures  taken  by  regularly  assessing 
SME participation in EU programmes. 

Both the Commission and Member States should take action in specific policy areas 
to  alleviate  burden  on  SMEs  and  to  take  better  into  account  their  particular  needs. 
The  Commission  intends  to  revise  and  simplify  the  various  State  aid  rules  and  to 
encourage risk-taking through a more flexible approach for aid directed at SMEs. In 
particular,  the  State  aid  rules  on  innovation  will  be  revised  to  foster  innovation  in 
SMEs, which is an important element. 

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COM (2005) 535 
http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/first_emp/index.htm 

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The  Commission  has  published  a  proposal  for  a  Council  Directive10  to  introduce  a 
uniform  threshold  of  €100  000  calculated  in  annual  turn-over  for  VAT  exemption 
and a VAT  One-Stop  Shop  system  to simplify  VAT obligations  and to encourage 
SMEs to increase intra-EU trade. The Commission is pressing for speedy adoption of 
this Directive. Furthermore, Member States are invited to review direct taxation to 
reduce  unnecessary  burden  on  SMEs.  Finally,  the  Commission  will  identify  good 
practice in Member States on the tax treatment of retained earnings which strengthen 
the equity position of SMEs. 

3.4. 

Improving SMEs’ growth potential. 

The  EU  is  acting  to  address  persistent  and  well-identified  market  gaps  that  limit 
innovation  and  Information  and 
SMEs’  access 
Communication  Technologies  (ICT)  and  hinder  their  potential  to  grow.  While  its 
activities  have  had  leverage  effect,  they  need  to  be  strengthened  and  further 
developed to respond to changing needs of all types of enterprises. 

finance,  research, 

to 

Finance is a crucial input for the creation, expansion and development of SMEs. The 
Commission  has  proposed  to  increase  the  existing  financial  support  to  SMEs 
significantly  under  the  Competitiveness  and  Innovation  framework  Programme 
(CIP).  A  new  risk  capital  instrument  aimed  specifically  at  innovative  and  high-
growth  SMEs  is  designed  to  foster  expansion.  An  instrument  for  securitisation  of 
bank loan portfolios will free up further loan capacity to develop the availability of 
proximity financing for more traditional businesses. The Commission will present a 
Communication  on  the  European  way  to  finance  growth  to  create  stronger 
synergies  with  Member  States  and  the  financial  community,  to  remove  remaining 
obstacles to the Internal Market for financial services as well as to identify efficient 
and effective public-private partnerships capable of overcoming market gaps. 

Permanent  innovation  is  essential  for  sustainable  development  of  enterprises.11 
However,  in  spite  of  their  important  contribution  to  innovation,  SMEs  frequently 
encounter difficulties in using innovation and research results and making good use 
of  IPR.  The  EU  has  set  itself  the  objective  of  strengthening  the  innovation  and 
research  capacity  of  SMEs  and  increasing  the  volume  of  technology  transfer  to 
them,  while  recognising  that  all  types  of  SMEs  can  benefit  from  technological 
progress. The Commission will therefore seek to increase participation by SMEs in 
the Europe INNOVA initiative and to deliver specific support to SMEs in the field 
the 
of  IPR, 
Environmental Compliance Assistance Programme, it will support innovation in 
SMEs while improving their environmental performance. 

the  Community  business  support  networks.  As  for 

through 

Investment in the growth potential of SMEs is also one of key elements of the new 
cohesion policy. The Strategic Guidelines outline a number of activities focusing on 
SME  growth,  including  improving  access  to  finance  for  SMEs  and  potential 
entrepreneurs, facilitating technological transfer or investment in poles of excellence 
linking SMEs to research and technological institutions. 

10 
11 

COM (2004) 728 final of 29.10.2004 
See  Communication  from  the  Commission:  Implementing  the  Community  Lisbon  Programme:  More 
Research and Innovation – Investing for Growth and Employment: A Common Approach, COM (2005) 
488 final of 12.10.2005 

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The Commission considers it fundamental that every effort is made to simplify rules 
and  procedures  to  promote  participation  by  SMEs  in  the  7th  Framework 
Programme  and  will  continue  to  monitor  progress  closely  in  this  area.  The 
Commission  will  undertake  further  measures  to  encourage  and  facilitate  SME 
participation,  both  in collaborative projects under the various thematic areas and in 
specific actions targeted at SMEs and SME organisations. 

Promoting  the  take-up  of  Information  and  Communication  Technologies  (ICT), 
e-learning  and  e-business  is  a  key  element  in  improving  SMEs’  competitiveness. 
The Commission will continue to support networking between policy-makers in this 
field  through  the  eBusiness  Support  Network  for  SMEs.  It  will  further  encourage 
the  exchange  and  dissemination  of  best  practices,  support  the  training  of  SME 
advisers  and  foster  cooperation  between  ICT  suppliers  and  SMEs.  In  addition,  the 
CIP will support the deployment of ICT solutions for the benefit of SMEs. 

Finally,  the  Commission  intends  to  improve  knowledge  about  and  the  analysis  of 
European  SMEs’  performance  to  be  able  to  take  action  to  reinforce  their 
competitiveness. It will improve the ability of existing tools such as the Observatory 
of European SMEs to analyse economic data and SMEs’ perceptions with a view to 
their  performance  and 
obtaining  a  more  comprehensive  understanding  of 
characteristics without adding any direct administrative burden on SMEs. 

3.5. 

Strengthening dialogue and consultation with SME stakeholders. 

SMEs are poorly informed about the EU and its activities and sometimes critical of 
their effect on business. Often, they do not fully grasp the opportunities brought by 
the  EU.  The  European  institutions  also  need  to  step  up  their  capacity  to  listen  to 
SMEs’  concerns  and  promote,  together  with  Member  States,  a  positive  image  of 
entrepreneurship. Reducing the information gap between the European institutions 
and  businesses,  particularly  SMEs,  is  essential  to  reconnect  citizens  with  the 
European project.12 

The Commission will promote more regular and better structured dialogue with and 
consultation of stakeholders. It will aim to reflect the diversity of the audience more 
fully,  from  European  business  organisations  to  national  and  local  support 
organisations,  small  business  advisers  and,  to  certain  extent,  to  SMEs  themselves. 
The  Commission,  and  in  particular  its  SME  Envoy,  is  committed  to  extensive 
consultation  of  relevant  stakeholders  to  ensure  that  their  concerns  are  taken  into 
account in the policy-making process. 

While recognising the central role of business organisations in channelling feed-back 
from  SMEs  to  European  institutions, the  Commission  plans to create  a quick and 
easy-to-use  consultation  mechanism  (“SME  panel”)  via  the  Euro  Info  Centre 
network to get views from SMEs in specific areas of policy making. In addition, the 
Commission is currently reviewing the Interactive Policy Making initiative and will 
propose ways of improving its feedback mechanism to facilitate the identification of 
SMEs’  problems  with  EU  legislation.  Last  but  not  least,  the  Commission  recently 

12 

See the Commission Action Plan to Improve Communicating Europe, July 2005 (SEC(2005) 985) 

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published a report on consultation of stakeholders at national and regional levels that 
makes concrete proposals for improving consultation mechanisms. 

Promoting entrepreneurship and the image of SMEs will be a key priority. The 
Commission  will  focus  on  communicating  with  various  stakeholder  groups, 
including at regional level. At the same time, a number of targeted actions will seek 
to improve the general public’s perception of entrepreneurs in Europe by showcasing 
successful  entrepreneurial  practices.  A  new  competition,  “European  Enterprise 
Awards”,  is  being  launched  in  late  2005.  This  scheme  will  identify  measures  that 
have  proved  successful  in  promoting  entrepreneurship  and  SMEs  at  regional  and 
local levels and facilitate the exchange of best practices in this area. 

Finally,  the  Commission  will  foster  cooperation  with  Member  States  and  other 
stakeholders.  It  will  reinforce  networking  with  national  administrations  on  SME 
issues,  while  regular  meetings  with  business  organisations  to  discuss  policy  issues 
will  be  continued  on  a  more  frequent  basis.  To  ensure  wide  involvement  of  all 
stakeholder groups, the Commission will organise an annual high-level conference to 
review  progress  achieved  in  the  implementation  of  this  Communication  and  to 
discuss future action. In addition, the Commission will promote SMEs’ participation 
in high-level groups, round tables and other fora where appropriate and will organise 
a conference for craft enterprises in 2006. 

4. 

CONCLUSION 

The present Communication marks a new start for a more pragmatic, comprehensive 
and inclusive EU policy in favour of SMEs. It highlights the key role SMEs play in 
the Partnership for Growth and Jobs. The Communication paves the way towards a 
strategic  approach  to  make  SMEs  more  competitive,  based  on  streamlining 
Community policy instruments, on improved synergies between policy areas and on 
a genuine partnership between the EU and Member States’ actions. 

An important objective is to trigger changes in the way SMEs and entrepreneurs are 
considered  in  policy-making  and  by  public  opinion,  both  at  EU  and  national  level. 
Indeed,  to  be  successful,  SME  policy  needs  to  integrate  the  actual  expectations  of 
millions  of  European  enterprises 
into  a  wide  spectrum  of  policies.  The 
Communication  draws  attention  to  the  huge  untapped  potential  of  SMEs  to  create 
growth  and  employment  and  proposes  ways  to  simplify  rules  and  regulations, 
promote  entrepreneurial  culture,  and  assist  SMEs  in  accessing  innovation,  finance, 
training and, last but not least, the European as well as international markets. Finally, 
improved  communication  and  consultation  with  stakeholders  go  hand  in  hand  with 
this new SME policy. 

Reaching  the  objectives  set  out  in  this  Communication  entails  the  full  mobilisation 
and commitment of all relevant actors, both public and private at regional, national 
and European level. The Commission will closely follow SMEs’ performance in the 
economy,  will  make  it  a  priority  to  reinforce  the  coordination  of  policies  towards 
SMEs  both  at  the  EU  level  and  among  Member  States  and  will  use  Community 
instruments and programmes to carry out actions supporting the competitiveness of 
SMEs. 

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