COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Industrial Policy: Reinforcing competitiveness
Date: 2011-10-14
Institutions: European Commission
Subjects: administrative formalities, competitiveness, corporation tax, industrial cooperation, industrial development, industrial restructuring, innovation, single market, small and medium-sized enterprises, sustainable development, tertiary sector

EUROPEAN COMMISSION 

Brussels, 14.10.2011 
COM(2011) 642 final 

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

Industrial Policy: Reinforcing competitiveness 

{SEC(2011) 1187 final} 
{SEC(2011) 1188 final} 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

4. 

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

Improving industrial competitiveness .......................................................................... 4 

Industrial change .......................................................................................................... 4 

Innovative industry....................................................................................................... 5 

Sustainable industry ..................................................................................................... 7 

Towards a more business-friendly Europe................................................................... 8 

Business environment .................................................................................................. 9 

Promoting industry and services ................................................................................ 10 

Small and medium-sized enterprises.......................................................................... 11 

Conclusions ................................................................................................................ 12 

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1. 

INTRODUCTION 

The EU economic recovery from the crisis has been relatively slow and remains fragile. 
Kick-starting  the  economy  and  higher  growth  are  necessary  to  create  jobs  and  wealth, 
and essential to get the public finances of the Member States onto a sustainable path. The 
difficult fiscal environment sets limits to policy action, but robust growth will reduce the 
burden of public deficit and debt, in line with the goals of the Stability and Growth Pact1. 

The main drivers of strong economic growth are competitive firms of all sizes. For this 
they  require  an  environment  that  favours  new  ideas  and  new  businesses.  This 
Communication identifies the following areas as necessary to make significant progress 
towards  the  Europe  2020  goals:  (1)  structural  changes  in  the  economy;  (2)  the 
innovativeness  of  industries;  (3)  sustainability  and  resource  efficiency;  (4)  business 
environment; (5) the single market; and (6) small and medium-sized enterprises.  

Rising  to  these  challenges  can  improve  the  competitiveness  of  European  firms  both 
internally and globally, and the Commission aims to help the Member States to use their 
limited  resources  smartly  in  order  to  increase  the  global  competitiveness  of  their 
industries.  Addressing  these  challenges  will  improve  the  growth  prospects  of  all 
enterprises, whether industry, services or socially oriented. 

European  industry  is  of  critical  importance  for  the  EU  as  a  global  economic  leader.  A 
competitive  industry  can  lower  costs  and  prices,  create  new  products  and  improve 
quality,  contributing  thus  decisively  to  wealth  creation  and  productivity  growth 
throughout  the  economy.  Industry  is  also  the  key  source  of  the  innovations  required  to 
meet the societal challenges facing the EU. 

As part of the Europe 2020 strategy, the Commission launched in 2010 an ambitious new 
industrial  policy2  that  highlighted  the  actions  needed  to  strengthen  the  attractiveness  of 
Europe as a place for investment and production, including the commitment to monitor 
Member States’ competitiveness policies. It also outlined a renewed trade policy. 

The  fragility  of  the  recovery  is  reflected  in  the  sentiment  that  has  worsened  across  the 
European  economy3.  There  are  clear  downside  risks  stemming  from  financial  markets, 
rising  energy  and  raw  materials  prices,  and  the  need  for  budgetary  consolidation.  EU 
labour productivity is now 1.4% above, but jobs in industry and industry-related services 
are  11%  below  the  2008  peak.  This  average  hides  great  divergence  between  Member 
States. Compared with its major competitors, the EU relative unit labour costs improved 
by 12% since 2008, mainly due to the exchange rate effect. 

However,  European  manufacturing  has  picked  up  better  that  expected.  In  the  second 
quarter, manufacturing production was 5.3% higher than a year ago although it did not 
grow from the previous quarter. Manufacturing output is now some 14% higher than its 
trough in early 2009 but still 9% below its peak in early 2008.  

1 
2 

3 

http://ec.europa.eu/economy_finance/sgp/index_en.htm  
An  Integrated  Industrial  Policy  for  the  Globalisation  Era.  Putting  Competitiveness  and 
Sustainability at Centre Stage, COM (2010) 614. 
http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm  

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EU27 production indices 1993 – 2011 (trend adjusted)  

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year

Manufacturing output

Construction output

Source: Eurostat 

This  Communication  is  a  new  yearly  initiative  that  looks  specifically  at  the 
competitiveness  of  the  Member  States,  based  on  the  European  Competitiveness  Report 
2011  and  the  Member  States’  Competitiveness  Performance  and  Policies.  It  will 
contribute  to  the  evaluation  of  the  Member  States  under  the  broader  framework  of  the 
European semester and Europe 2020. More detailed arguments and EU actions are laid 
down in the documents accompanying this Communication.  

2. 

IMPROVING INDUSTRIAL COMPETITIVENESS 

2.1. 

Industrial change 

Looking  back  to  the  longer-term  changes  in  the  industrial  structures  of  the  Member 
States in 1999-2007, industries have followed different paths towards higher technology 
or  higher  skills  industries  that  tend  to  have  higher  productivity  growth  and  their  prices 
have  suffered  less  from  global  competition.  For  analytical  purposes  the  industrial 
structures of the Member States can be looked at based on similarities in character and 
trade trends, although this can still mask substantial differences within each group. 

In the first group of countries, the industrial structure is dominated by technologically 
advanced  sectors.  A  key  development  in  this  period  has  been  that  the  specialisation  of 
this  group  in  technology-driven  industries  and  sectors  with  high  innovation  or  high 
education  intensity  increased  further.  The  countries  in  this  group  are  Austria,  Belgium, 
Denmark,  Finland,  France,  Germany,  Ireland,  Netherlands,  Sweden  and  the  United 
Kingdom.  The  value  added  contribution  of  industry  varies  from  10.6%  in  France  to 
24.2% in Ireland. 

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The second group includes countries with industry specialisation in less technologically 
advanced  sectors,  despite  the  presence  of  some  highly  competitive  industries.  The 
prevalence  of  labour  intensive  industries,  low  innovation  and  relatively  low  knowledge 
intensity  lead  to  fewer  high-growth  firms,  at  least  compared  to  the  first  group  of 
countries.  The  countries  in  this  group  are  Cyprus,  Greece,  Italy,  Luxembourg,  Portugal 
and  Spain,  with  industry  value  added  varying  from  6.5%  in  Luxembourg  to  16.1%  in 
Italy.  

The  third  group  comprises  countries  that  are  catching  up  in  terms  of  GDP  per  capita, 
and  whose  trade  specialisation  is  in  high-innovation  intensity  sectors  and  technology-
driven  industries.  They  have  achieved  a  structural  change  from  labour-intensive 
industries towards technology-driven industries on both production and trade. The group 
consists  of  the  Czech  Republic,  Hungary,  Malta,  Poland,  Slovakia  and  Slovenia,  with 
industry value added between 13.3% and 23.6% of the total. 

The  fourth  group  of  countries  are  those  that  are  catching  up,  but  with  trade 
specialisation in technologically less advanced sectors. These countries resemble those of 
the  second  group  with  which  it  also  shares  the  trend  towards  sectors  with  higher 
educational  intensity.  However,  a  major  difference  is  the  much  stronger  than  average 
presence of high-growth firms in this group, and the large increase in industry and trade 
specialisation  in technology-driven industries. This group consists of  Bulgaria,  Estonia, 
Latvia, Lithuania and Romania, with industry value added between 9.9% and 22.4%.  

Within  each  group  of  countries  there  are  competitive  industries  and  growing  firms.  To 
boost  competitiveness  it  is  necessary  to  move  towards  innovative,  knowledge-based 
sectors,  decisive  actions  to  facilitate  change  by  improving  product  market  regulation, 
supporting innovation and investing in education and training throughout the lifecycle are 
necessary.  

2.2. 

Innovative industry 

Research and innovation drive productivity growth and industrial competitiveness. New 
technologies  make  it  possible  to  produce  commercially  at  ever  smaller  volumes  and 
advanced  materials,  low-carbon  technologies,  biotechnology  and  nanotechnology  are 
changing the nature of competitive advantage. EU industry must accelerate its efforts to 
adopt these technologies to keep its competitive edge in the world.  

The  recent  report  on  Key  Enabling  Technologies4  highlighted  the  need  to  invest  in 
industrial  innovation  to  bridge  the  gap  between  basic  research  and  markets.  An 
integrated approach to bringing new products and services to the market should include 
support for demonstration projects and pilot test facilities as well as specific measures in 
terms  of  state  aid,  regional  cohesion  and  trade  policies.  Incentives  are  needed  for 
researchers  at  universities  to  commercialise  their  research  and  to  collaborate  with 
industry.  Customer  needs  and  market  potential  should  be  considered  from  the  start  of 
research  and  innovation  funding,  and  potential  outside  investors  should  be  brought  in 
early. Support for the development of more innovation friendly markets can be achieved 

4 

http://ec.europa.eu/enterprise/sectors/ict/files/kets/hlg_report_final_en.pdf  

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through  demand  side  measures,  such  as  smart  regulation,  customer  information, 
standardisation or increased public procurement of innovative solutions.  

All this requires additional skills and competences e.g. in marketing and management. 
In  general,  an  entrepreneurial  and  better-trained  workforce  contributes  to  productivity 
growth, but the Member States have made only variable progress in investing in human 
capital.  A  particular  problem  is  that  although  EU  unemployment  continues  to  be 
relatively high, some firms are facing increasing difficulties in recruiting qualified staff. 

Although many Members States have taken steps to intensify their support for research 
and innovation, to ensure the most efficient use of limited resources they should reduce 
the fragmentation of support schemes. Widely used measures include loan schemes for 
technology investments, access to funding for  key enabling technologies and grants for 
technology upgrading (Germany, France, Sweden, Italy, Portugal, Slovenia). Some have 
set  up  innovation  support  services  and  backed  the  emergence  of  clusters  (Denmark, 
France, Germany, Poland, Sweden, Belgium). 

However, there is little alignment of investments between Member States for supporting 
the uptake of innovative technologies. A greater coordination and pooling of national 
resources  would  allow  mobilising  them  around  common  goals  and  provide  improved 
innovation capacities and appropriate critical mass of funding, increasing the efficiency 
and  effectiveness  of  investments.  Large  scale  demonstration  projects  and  pilot  test 
facilities  located  around  Europe  (e.g.  in  the  context  of  the  European  Innovation 
Partnerships or the Strategic Energy Technology Plan) could help companies to test and 
create  prototypes  quicker.  Time  to  market  of  new  products  and  services  could  be 
considerably  shortened  by  enhanced  transnational  cooperation  between  clusters  and 
networks, and improved knowledge of manufacturing capabilities.  

A  modern  intellectual  property  regime  will  protect  the  initial  innovator  without 
hampering further developments of existing ideas. The unitary EU patent currently being 
negotiated  among  Member  States  will  significantly  improve  the  framework  while 
reducing costs for patent applicants.5 

Competitiveness would be strengthened by: 

• 

• 

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Pooling scarce resources to help to achieve critical mass in bringing innovation 
to the market; and by increasing cooperation in innovation to create large scale 
demonstration projects and pilot test facilities, for example using the model of 
the European Strategy Forum on Research Infrastructures (ESFRI). 

Reducing the fragmentation of innovation support systems, facilitating bringing 
innovative solutions to the market, and increasing the market focus of research 
projects. Denmark and Austria have successfully reduced the fragmentation and 
the United Kingdom has schemes to bring innovative solutions to the market.  

Proposal for a Regulation of the European Parliament and of the Council implementing enhanced 
cooperation  in  the  area  of  the  creation  of  unitary  patent  protection.  COM(2011)  215  final, 
13.4.2011. 

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2.3. 

Sustainable industry  

A  transition  towards  a  sustainable,  resource  efficient  and  low  carbon  economy  is 
paramount for maintaining the long-term competitiveness of European industries. During 
the last decade the economies of many Member States have grown without an increase in 
energy  consumption,  while  in  others  the  increase  has  been  less  pronounced  than 
expected.  In  particular,  the  new  Member  States  are  catching  up  fast,  despite  their 
different starting points.  

Overall,  Member  States  have  made  significant  progress  in  defining  and  implementing 
consistent  national  legislative  frameworks  for  stimulating  energy  efficiency.  However, 
some  lack  the  experience  and  the  administrative  capacity  to  do  this  and  for  these 
countries the framework legislation at the EU level can provide guidance and support.  

In  spite  of  the  progress  made,  rising  world  market  prices  for  energy  and  national 
distortions  have  been  reflected  in  higher  prices  for  enterprises,  in  particular  for  SMEs. 
The  energy  and  resource-intensive  process  industries  such  as  metals,  chemicals,  and 
paper and pulp face specific challenges. In order to facilitate the transformation towards 
more  sustainable  ways  of  production,  a  coherent  and  effective  mix  of  policies  could 
include measures to support research, innovation, resource efficiency and deployment of 
cleaner technologies, especially in process industries.  

Member  States  have  designed  support  schemes  for  improving  the  energy  efficiency  of 
industry,  in  most  cases  accompanied  by  energy  audit  schemes  (Austria,  Belgium, 
Bulgaria,  Czech  Republic,  Finland,  Germany,  Portugal,  Slovakia),  or  have  pursued 
voluntary  agreements  with  industries  (Denmark,  Greece,  Netherlands,  Slovenia,  UK). 
The  Strategic  Energy  Technology  Plan6  seeks  to  accelerate  the  development  of  low 
carbon energy technologies and to bring them more quickly to the market. Some positive 
developments  concern  targeted  interventions  for  supporting  energy  performance  by 
SMEs (Greece, Ireland, Lithuania) although more could be done.  

Access  to  non-energy,  non-agricultural  raw  materials  is  another  essential  factor  for  the 
competitiveness of EU industry. The high and fluctuating prices for these raw materials, 
and their location mostly outside the EU poses risks to many firms and both the EU and 
the Member States – complementing EU's external policies – should design policies that 
address  the  scarcity  of  primary  raw  materials  by  exploiting  European  resources  in  a 
sustainable  way;  supporting  research  and  innovation  with  the  aim  of  generating 
alternative  solutions;  increasing  resource  efficiency;  and  promoting  better  recycling 
techniques on a wider scale, including for valuable materials used in small quantities. 

The  further  integration  of  environmental  and  social  issues  into  business  operations  and 
strategy  is  increasingly  important  to  the  competitiveness  of  European  industry.  The 
Roadmap  to  a  Resource  Efficient  Europe7  contains  a  set  of  actions  at  EU  level  and 
recommendations for Member State action to tackle the unsustainable use of resources. 

Competitiveness would be strengthened by: 

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7  

http://ec.europa.eu/energy/technology/set_plan/set_plan_en.htm  
Communication "Roadmap to a Resource Efficient Europe", COM(2011) 571 final, 20.09.2011 

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• 

• 

Favouring  energy  and  raw  material  efficiency  and  promoting  innovation  and 
deployment  of  cleaner  technologies  along  value  chains  with  the  use  of  long-
term incentives that encourage market creation and facilitate the participation of 
SMEs in these processes. As outlined above, many Member States have made 
considerable progress with these issues. 

Ensure  fair  and  undistorted  pricing  of  energy,  and  continue  to  work  on 
upgrading and interconnecting energy distribution networks.  

Developing social entrepreneurship, social businesses and the social economy is another 
important  tool  for  strengthening  the  competitiveness  and  the  sustainability  of  the 
European industry. 

The  social  economy  employs  over  11  million  people  in  the  EU,  accounting  for  6 %  of 
total  employment8  and  approximately  one  in  four  businesses  founded  in  Europe  is  a 
social enterprise. This figure rises to one in three in Belgium, Finland and France9. These 
companies  are  often  highly  productive  and  competitive,  due  to  the  very  high  level  of 
personal  commitment  on  the  part  of  their  employees  and  the  better  working  conditions 
that they provide10.  

In order to reinforce a 'highly competitive social market economy', the Commission has 
placed the social economy, social responsibility and social innovation at the heart of its 
concerns  for  new  solutions  to  a  more  sustainable  economy,  under  the  Europe  2020 
strategy11, the flagship initiative 'The Innovation Union'12, the European Platform against 
Poverty and Social Exclusion13 and the 'Single Market Act'14 (SMA). 

The public consultation for the SMA15 revealed a high level of interest in the capacity of 
social enterprises and the social economy in general to provide innovative responses to 
the current economic and social challenges by developing sustainable jobs. 

The Commission is therefore willing to launch an important debate on means to develop 
this new kind of economy and a first step will be achieved in some weeks with the Social 
Business 
the  Corporate  Social  Responsibility 
Communication which will present key actions for promoting social business. 

Initiative  Communication  and 

Competitiveness would be strengthened by: 

• 

8 
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10 

11 
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13 

14 

15 

Favouring  and  promoting  social  entrepreneurship  in  Europe,  in  particular  in 

CIRIEC 'The Social economy in the European Union' page 48 
Global entrepreneurship Monitor, Executive report 2009 
For example, in France, absence due to sickness is significantly less than in companies in general: 
5.5% as opposed to 22%, 'Absence from work for health reasons in the social economy', Chorum, 
April 2011, http://www.cides.chorum.fr 
Europe 2020 – A strategy for smart, sustainable and inclusive growth, COM(2010) 2020 
Communication on the Innovation Union COM(2010) 546 final, 6 October 2010 
Communication  on  the  'European  Platform  against  Poverty  and  Social  Exclusion:  a  European 
framework for social and territorial cohesion' COM(2010) 758 final of 16 December 2010 
'SMA  –  Twelve  levers  to boost  growth  and  strengthen  confidence',  COM(2011)  206  final  of  13 
April 2011 
http://ec.europa.eu/internal_market/smact/consultations/2011/debate/index_en.htm 

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enhancing  its  public  profile  and  its  access  to  public  and  private  finance 
(especially through Social investment Funds).  

3. 

TOWARDS A MORE BUSINESS-FRIENDLY EUROPE 

3.1. 

Business environment 

An open, efficient and competitive business environment is a crucial catalyst for growth 
in a global context. Improving the business environment covers policies in areas ranging 
from improving infrastructure to shortening the time needed to obtain a building license.  

While  all  Member  States  have  adopted  national  targets  for  reducing  administrative 
burden,  not  all  of  them  have  made  progress  in  measuring  the  current  burden  or 
proceeded  to  cut  it.  In  18  Member  States  impact  assessments  for  new  legislative 
proposals are mandatory, albeit not all of them comply with the requirement, and impact 
assessments  are  not  always  comprehensive  in  terms  of  economic,  social  and 
environmental aspects, limiting their effectiveness.  

The  high  quality  and  availability  of  infrastructure  (energy,  transport,  and  broadband) 
make  an  important  contribution  to  a  business-friendly  environment.  Given  that 
improving the transport infrastructure is a major challenge especially in the new Member 
States,  significant  investments  for  rebuilding  and  modernisation  should  continue, 
including with the support of Structural Funds and the Connecting Europe Facility. 

Businesses  need  a  modern  public  administration,  able  to  deliver  efficient  and  high 
quality public services. Reforms should emphasise e-government initiatives like unified 
service  centres  for  the  public,  shared  networks  and  data  centres.  Many  e-government 
initiatives  also  allow  enterprises  to  spend  less  time  on  administrative  procedures  and 
devote  more  resources  to  business  opportunities.  E-procurement  must  in  this  regard  be 
promoted  to  the  widest  extent  possible.  Making  available  well-performing  one-stop-
shops  (so-called  "Points  of  Single  Contact")  to  businesses  seeking  to  operate  across 
borders is also key to saving time and resources, and to reduce the room for corruption. 
While considerable progress has been made, there is still room for improvement. 

An important area providing scope for improvement is the taxation of businesses. While 
the overall effective corporate tax rate and the balance of taxes on labour as opposed to 
resource  use  are  issues  where  further  reflection  is  needed  at  the  EU  and  Member  State 
levels,  the  reduction  of  compliance  burden  deriving  from  taxation  can  greatly  improve 
the  business  environment.  This  implies  increasing  transparency  and  reducing  the 
complexities of tax codes and compliance regulations, simplifying payment procedures, 
including  through  the  use  of  e-government,  and  ensuring  the  stability  of  taxation 
legislation. The Commission proposal on a Common Consolidated Corporate Tax Base is 
an important step forward.16  

Competitiveness would be strengthened by:  

16 

Proposal for a council Directive on a Common Consolidated Corporate Tax Base (CCCTB), COM 
(2011)121 of 16.03.2011. 

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• 

• 

Reducing  the  administrative  burden  on  businesses  by  evaluating  the  current 
burden  (including  that  due  to  the  tax  code)  and  rapidly  reducing  burdens  to 
targets.  For  example,  the  Netherlands  has  been  a  pioneer  in  measuring  and 
evaluating  the  reduction  of  administrative  burden  and  in  setting  ambitious 
targets, resulting in a globally recognised efficiency. 

Promoting competition among service providers that use the infrastructures in 
broadband, energy and transport. 

3.2. 

Promoting industry and services  

Services are the largest part of the EU economy and their integration with manufacturing 
has  grown  as  specialised  services  are  used  to  manage  the  production  and  product 
distribution processes. Manufacturing firms have started to offer services packaged with 
products and service providers use complementary products and integrate manufacturing 
within their value chain. 

Service innovations that address customer needs can transform value chains, sectors and 
markets17  irrespective  of  whether  they  come  from  service  or  manufacturing  firms.  The 
importance  of  business-related  services  is  growing  as  a  source  of  innovation,  new 
technology  and  improved  performance.  These  services  have  become  integrated  in  the 
value  chains  of  other  industries  by  means  of  intermediate  consumption,  knowledge 
production  and  technology  flows,  which  represents  an  opportunity  for  the  European 
manufacturing  sector  to  open  up  new  markets  and  find  new  sources  of  revenue  around 
their products. 

The  Single  Market  could  contribute  more  to  growth  if  all  the  European  legislation 
currently in force was fully implemented by all Member States. The goal is to put an end 
to  market  fragmentation  and  to  eliminate  barriers  to  the  movement  of  goods,  services, 
innovation and creativity as noted in the Single Market Act.18 The proposed Regulation 
on  European  Standardisation19  has  extended  European  standards  setting  to  the  services 
sector to reduce multiple and conflicting national standards. 

Intra-EU trade in services lacks dynamism as it represents only one-fifth of total intra-EU 
trade. Since 2004, trade in services between the EU and the rest of the world has been 
growing  faster  than  intra-EU  trade.  The  implementation  of  the  Services  Directive20  has 
been a critical milestone, although the recent mutual evaluation process21 has identified a 
number of areas that still need improvement. 

Competitiveness would be strengthened by:  

17 
18 

19 

20 

21 

http://www.europe-innova.eu/web/guest/innovation-in-services/expert-panel/about 
Single Market Act. Twelve levers to boost growth and strengthen confidence - "Working together 
to create new growth", COM(2011) 206 final, 13.4.2011. 
Proposal for a regulation of the European Parliament and of the Council, COM(2011) 315 final, 
01.06.2011 
Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on 
services in the internal market. 
“Towards a better functioning Single Market for services – building on the results of the mutual 
evaluation process of the Services Directive”, COM(2011) 20 final, 27.1.2011. 

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• 

• 

Developing  support  for  innovative  services  based  on  measureable  outcomes; 
and  by  participating  in  the  Innovation  Partnerships  and  in  large-scale 
demonstration projects. 

Fully  implementing  the  Single  Market  legislation,  in  particular  the  Services 
Directive  and  promoting  business  services.  Malta  is  leading  in  transposing 
Single Market legislation with only two directives awaiting transposition. 

3.3. 

 Small and medium-sized enterprises  

To  fully  unleash  the  potential  of  small  and  medium-sized  enterprises  requires  coherent 
actions across the EU in line with the SBA Review Communication.22 Large, exporting 
enterprises have been in the forefront of the recovery, but many SMEs still face lack of 
demand  because  of  time  lags,  but  also  because  of  difficulties  in  accessing  finance  and 
export markets. Among high-growth firms, as measured by employment expansion rates, 
small firms exhibit higher net job creation rates than larger ones. High-growth firms are 
found in all industries and in all regions, and tend to be innovative.  

The tightening of credit conditions during the crisis has made access to finance difficult, 
especially  for  SMEs.  In  response,  many  Member  States  have  adopted  corrective 
measures such as increasing the capacity of loan guarantee schemes, investing in equity 
funds and microcredit programmes, and facilitating bank lending through advantageous 
loan conditions or credit mediators. As access to finance continues to be difficult, further 
efforts  should  be  made  to  facilitate  the  availability  of  appropriate  forms  of  finance, 
including  loans,  equity  and  their  combinations.  In  addition,  the  development  of 
specialised  finance  providers  for  small  businesses,  including  socially-oriented  firms, 
should  be  encouraged.  As  mentioned  in  the  Single  Market  Act23,  the  Commission  will 
adopt before the end of this year a legislative instrument to facilitate the development of 
Social Investment Funds in the European Union. 

Trade promotion by Member States improves the global presence of European firms and 
most  Member  States  support  the  internationalisation  of  SMEs,  providing  finance, 
information and support on market access and regulation. SMEs that use these services 
are relatively satisfied, although only 27 % of internationalised SMEs said that they were 
aware  of  existing  public  support  measures  and  7 %  actually  used  them.  These  results 
suggest that the awareness and accessibility of public support could be further improved. 

The average payment delays can be very long in some Member States, threatening the 
survival of small firms. The situation has not improved during the last year, and has even 
deteriorated  in  some  Member  States  for  payments  from  public  administrations  (Czech 
Republic,  Greece,  Cyprus,  Hungary,  Austria,  Slovakia).  The  late  payment  directive24 
requires  payments  by  public  authorities  to  be  processed  within  30  days.  Meeting  this 
objective  will  be  a  challenge  for  many  Member  States,  but  in  particular  for  Greece, 
Spain, Italy and Portugal.  

22 
23 
24 

Review of the “Small Business Act” for Europe, COM(2011)78/3, 23.02.2011. 
Key action of lever 8 on Social entrepreneurship 
Directive  2011/7/EU  of  the  European  Parliament  and  of  the  Council  of  16  February  2011  on 
combating late payment in commercial transactions (recast). 

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Competitiveness would be strengthened by:  

• 

• 

Facilitating  the  growth  of  SMEs  by  ensuring  that  regulations  do  not  pose 
obstacles  to  expansion;  by  favouring  access  to  appropriate  finance;  and  by 
providing support services for accessing new markets, and publicising these. 

Ensuring that public administrations reduce payment times and adhere strictly 
to the Late Payments Directive. 

4. 

CONCLUSIONS 

This Communication has argued that to achieve sustainable growth and to kick-start the 
economy require coherent and coordinated industrial policies from the Member States as 
well as deep structural changes. A considerable impact can be had by facilitating change, 
enabling  innovation,  promoting  sustainability,  improving  the  business  environment  and 
benefiting  from  the  single  market.  The  implementation  of  these  policies  should  be  a 
priority in national capitals as it is at the Commission. 

A  greater  coordination  of  policies  at  national  level  can  leverage  scarce  funds  to  foster 
innovation  and  growth  in  times  of  budgetary  austerity.  At  EU  level,  the  Commission’s 
proposal for the Multiannual Financial Framework25 has been designed to prioritise these 
objectives,  strengthening  the  capacity  of  the  EU  to  invest  in  industrial  innovation  by 
reducing  fragmentation,  simplifying  rules  for  beneficiaries  and  increasing  the  focus  on 
bringing innovation to the market.  

The  Commission  will  strengthen  its  support  for  the  Member  States’  efforts  within  the 
context of Europe 2020, based on a coherent approach to monitoring progress over time, 
and providing the necessary forum for identifying good practices. 

The Commission will: 

• 

• 

Strengthen the coordination of Member States’ industrial policies by promoting 
and  monitoring  growth-enhancing  structural  improvements  to  achieve  the 
targets of the Europe 2020 strategy. 

By  first  quarter  of  2012  provide  a  forum  for  identifying  and  discussing  good 
practices in promoting growth through industrial policies. 

25 

A Budget for Europe 2020, COM(2011) 500 final. 

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