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# 52011SC1453

**COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT /\* SEC/2011/1453 final \*/**

  

1.
Introduction

The purpose of this
Impact Assessment Report is to assess the expected impacts of an EU
Competitiveness and SME programme (2014-2020), as proposed by the Commission in
its MFF Communication of 29 June 2011[1].

To prepare this
initiative, the Commission consulted relevant stakeholders and sought external
expertise. It commissioned an interim and a final evaluation of the current
programme –  the Entrepreneurship and Innovation Programme[2] – and a survey on
administrative costs for beneficiaries. It also launched a public consultation.[3] Two external studies provided empirical
data and analysis supporting the impact assessment.[4]

In view of the long-lasting effects of the
economic crisis on the competitiveness and entrepreneurship potential of the European
economy, in particular on SMEs, it is necessary to look at possible ways to
tackle the underlying problems which constrain growth at the European level. The
crisis and its consequences have demonstrated that uncoordinated national
policy responses are of limited value, as they do not gather the critical mass
to influence the performance and growth of European businesses in global
markets, and they lack the necessary consistency over the long term.

2.
Problem Definition

Market, institutional and policy failures
undermine the competitiveness of European enterprises, including SMEs, and in
particular their ability to become more sustainable as well as their
possibilities of growth linked to access to finance and global markets.

A particular effort is needed in order to
promote the interests of small and medium-sized enterprises and the sectors in
which they are most represented. One of the main sources of economic growth and
job creation in the EU are SMEs, which constitute 99% of European businesses,
provide two out of three private sector jobs and contribute more than half of
the total value-added created by businesses in the EU. In the past five years,
80% of new jobs in Europe have been created by SMEs.[5]

2.1.
The specific problems related to competitiveness
and sustainability

The business environment in Europe is characterised by cross-border regulatory fragmentation and the excessive
administrative burdens in some Member States for starting a business. According
to different surveys, between 70% and 88% of businesses regard administrative difficulties
in other EU Member States as ‘very important’ or ‘important’ in deciding
whether or not to engage in cross-border trade[6].
This runs counter to the general principle that businesses located in high cost
locations, such as Europe, must be able to permanently adapt in order to remain
competitive in the global market.

2.2.
The specific problems related to
entrepreneurship, SME creation and growth

According to a 2009 EuroBarometer survey
dedicated specifically to entrepreneurship, only 45% of European citizens would
like to be self-employed, as compared to 55% in the United States and 71% in China.

2.3.
The specific problems related to access to
finance

In many Member States, SMEs have
difficulties in obtaining a loan from bank institutions. According to the
external study[7],
between 400,000 and 700,000 SMEs are unable to obtain a loan from the formal
financial system, with total foregone loans between € 40 and € 70 billion, because
financial institutions require substantial collateral as well as extensive
financial and business records. Moreover, compared
to their US counterparts, European start-ups have less access to other financing
such as venture capital, especially SMEs. As a result, many fast-growing
European enterprises are looking to expand in the US instead of in Europe[8].

2.4.
The specific problems related to access to
markets

According to a 2010 ECB survey, the most
pressing problem facing Euro-area SMEs is “finding customers” (28%). However,
despite the existence of the Single Market, doing business across borders inside
and outside Europe is still subject to significant barriers for SMEs. As a
result, only 25% of SMEs in the EU export directly outside national markets and
only 13% export beyond the EU[9].
This situation is a cause of concern, as the internationalisation of businesses
plays an important role in the creation of jobs and growth.[10]

2.5.
Need for action at EU level

·
The case for action at the EU level relies on
five main sources of European added value: the benefits associated with the strengthening
of the Single Market, by overcoming market fragmentation in areas such
as venture capital investment, cross-border lending and credit enhancement, as
well as informational and organizational constraints which prevent SMEs from taking
advantage of the opportunities that the Single Market offers.

·
the possibility of achieving significant demonstration
and catalytic effects, through the dissemination of industrial and
policy best practices. Under the current programme, the best examples of promoting
entrepreneurship and SMEs at national, regional and local level can be selected
for the European Enterprise Awards competition.

·
the achievement of economies of scale
in areas where it would be difficult for individual Member
States to achieve the required critical mass.
For instance, in the field of support to SMEs abroad, European added value is
created by the bundling of national efforts and by establishing services that
would lack critical mass if provided at national level (for example, through
support to IPR enforcement). The China IPR SMEs Helpdesk, funded by the current
programme, offers advice which would be otherwise unavailable to SMEs from
smaller Member States.[11]

·
supporting coherence and consistency
in national measures through the exchange of best practices at European level
and benchmarking.[12]
One of the best examples for the success of benchmarking exercises financed
under the current programme is the action for
simplification of start-up procedures.

·
the unique expertise acquired by EU
institutions:

·
This is the case of the EU financial
institutions, the European Investment Bank (EIB) and the European Investment
Fund (EIF), whose experience in designing and implementing SME-friendly
financing schemes is unparalleled. The experience
gained by the EIF over more than 10 years constitutes a uniquely valuable
asset.

·
The Enterprise Europe Network has
achieved tangible results by putting emphasis on promoting the
internationalisation of SMEs (in the Internal Market and beyond) through the provision
of information on EU matters, as well as the possibility of feeding into the
decision making process. Its role is especially important in overcoming
information asymmetries faced by SMEs and in alleviating the transaction costs
associated with cross-border activities. The value of the Enterprise Europe
Network is constituted by the shared methodologies, instruments and tools used
qualified service providers mandated and (co-) financed by their regional /
national authorities.

Applying the principle of subsidiarity, the
measures considered under the current or future programme aim not at replacing the existing national actions, but
rather at complementing them. While there are many
initiatives in place in the Member States to foster entrepreneurship and stimulate SMEs’ competitiveness, there is a need for
coordination and sharing of best practices. For most SME-related issues, the EU and the Member States each appear to have an important complementary role to play, as there is scope for
spillovers and synergies. In particular, the EU plays a key role in activating all policy areas and
levers in an integrated way.

In addition, and in order to take into
account the current budgetary constraints, the measures considered were
carefully selected as being those with the highest EU added value.

3.
Objectives

The overall objective of the proposal is to
contribute to the Europe 2020 goals by addressing the specific constraints to the growth of the European
economy.

The twin general objectives of this proposal are to stimulate the potential for both
competitiveness and entrepreneurship, particularly concerning the creation and
growth of SMEs, within the European economy.

The specific objectives are to improve the framework conditions for the competitiveness and
sustainability of EU business, to promote entrepreneurship, to improve access
to finance and to improve access to markets.

4.
Policy Options

Under Option 1, Business-as-Usual,
the new programme would cover the same competitiveness and SME-related elements
as the EIP is expected to cover in
2013, and would have a budget of about € 213 million per year.

Option 2 would see the Discontinuation
of all current financial interventions, leading to a budget saving equivalent
to the amount indicated in Option 1.

Scenario 3a is based on the results of the
external study and serves only as a reference point to assess the impacts of
options 3b and 3c.[13]

Option 3b would maintain the current scope
of intervention with a balanced budgetary expansion. Option 3c would
constitute a focused budgetary expansion, where financial support is restricted
to the financial instruments and the Enterprise Europe Network.

The options considered in this Impact
Assessment Report are presented below.

Table
1            Summary of Options

|| Option #1 || Option #2 || Option #3

|| Business as Usual || Discontinuation of EU intervention || Expansion of EU  intervention

Measures || €213 million/year || €0 million/year || Option 3B:  €340 million/year Option 3C:  €340 million/year

1 – Activities to improve European competitiveness || Improvement of the economic and regulatory environment through benchmarking, the exchange of best practices and sectoral initiatives (€11 million/year) || Discontinuation of all current activities || Option 3B: Baseline plus launch of a range of complementary actions in new areas (e.g. Corporate Social Responsibility) (€14 million/year); Option 3C: Discontinuation of all current activities

2 – Developing SME policy and promoting SMEs' competitiveness || Implementation of the SBA and its Review at European and national level (e.g. Promotion of the "Think Small First" principle) (€9 million/year) || Discontinuation of all current activities || Option 3B: Same as Baseline option (€9 million/year); Option 3C: Discontinuation of all current activities

3 – New business concepts for sustainable, user-driven design-based consumer goods || Analysis related to design-based consumer goods and support measures in the areas of IPR or e-business (€1 million/year) || Discontinuation of all current activities || Option 3B: Use of instruments such as “market replication projects” in areas where SMEs face obstacles to the take-up of new eco-sustainable technologies and new user-driven business concepts (€ 12 million/year); Option 3C: Discontinuation of all current activities

4 – Tourism || Continuation of current initiatives in the field of tourism co-financed under CIP/EIP (e.g. follow-up to preparatory actions for sustainable tourism: EDEN, CALYPSO) (€5 million/year) || Discontinuation of all current activities || Scenario 3B: Expand the scope of intervention to new activities related to sustainability and targeting diversification of products and services  (€18 million/year); Option 3C: Discontinuation of all current activities

5 – Activities to promote Entrepreneurship || Encouraging the development of entrepreneurial skills and attitudes, including exchange programmes for entrepreneurs (€11 million/year) || Discontinuation of all current activities || Option 3B: Same as Baseline option plus modest expansion of activities focused on the increase of number of exchanges (€12 million/year); Option 3C: Discontinuation of all current activities

6 – Financial instruments || Continuation of support to access to finance, mainly through provision of guarantees to SMEs and Venture Capital funds targeting firms in the growth stages  (€113 million/year) || Discontinuation of all direct intervention in financial instruments, with EU action limited to elimination of regulatory barriers to cross border venture capital || Option 3B: Almost a doubling of resources  with  the same range of instruments funding both debt and equity (€200 million/year); Option 3C: Focused expansion of activities, reflecting an increase of risk sharing finance in venture and mezzanine capital (€280 million/year)

7 – Enterprise Europe Network || Maintain the Network’s role and scope as it is (€60 million/year) || Discontinuation of all direct financial support to the regional Network consortia || Option 3B: Same as Baseline option (€60 million/year); Option 3C: Re-orient the Network as an entry point for equity financing  (€60 million/year)

8 – SME support abroad || Continuation of current initiatives (i.e. limited financial support to selected initiatives such as China IPR SME Helpdesk) (€2 million/year) || Discontinuation of all forms of direct initiatives || Option 3B: Expansion of the range of instruments including: a) coordination and information dissemination activities; b) financial support to existing SME help structures in key third markets; c) possible establishment of EU support centres where appropriate (€12 million/year); Option 3C: Discontinuation of all forms of direct initiatives

9 – International industrial cooperation || Continuation of current initiatives focused on SME and industrial policy co-operation with third countries in the “Near Europe” aiming to facilitate EU - third country convergence of industrial policy and regulatory frameworks (€1 million/year) || Discontinuation of all current activities || Option 3B: Expansion of the range of instruments including: a) industrial and regulatory dialogues with third countries; b) business-to-business dialogues with third countries; c) SME industrial policy co-operation (€3 million/year); Option 3C: Discontinuation of all current activities

5.
Assessment of impacts

As far as possible, a quantitative and
qualitative assessment of impacts has been developed for all options. An effort was made to quantify the main impacts in terms of GDP
(added value), value of lending/investment mobilised and employment, as well as
the number of firms assisted. However, the quantification proved unfeasible in
the case of indirect instruments, i.e. those aimed at creating or facilitating market
conditions for SMEs, and whose ultimate impact would depend upon the behaviour of market participants and administrations.
Therefore, the quantification exercise concerned Financial Instruments and, to
a lesser extent, the Entreprise Europe Network.

Concerning the efficiency of the proposed
options, the quantitative analysis covered two aspects: (i) the cost
effectiveness of the proposed measures in terms of cost ratios linking
budgetary outlays to the expected impacts in terms of marginal job cost and
incremental impact to budget cost, and (ii) administrative expenses measured by
the ratio of administrative personnel costs on the overall budget. Concerning
the financial instruments, the analysis took into account the expenses for the
management of various facilities, such as fees to the European Investment Fund
and financial intermediaries.

Option 1: Business-as-Usual

The Business-as-Usual Option would meet the
policy objectives of the proposed programme to a limited extent only. In view
of the effects of the economic crisis on business, Option 1 would mean that initiatives that are currently operating below
the optimum scale would remain under-developed, and areas where there is a
clear need to expand EU action (such as the financial instruments) would suffer
from the lack of a consistent,
welfare-enhancing set of EU initiatives.

(a) Effectiveness:
Economic impacts are nevertheless estimated to be significant, in terms
of both direct and indirect support. Concerning
the net impacts of financial instruments, these are expected to result
in an increase of GDP of approximately €660 million and to generate about €1.8
billion in additional lending/equity investment facilitated. The activities of the
Network are expected to generate an increase of €200 million of
incremental turnover for assisted firms. Positive social impacts of financial
instruments are expected in terms of generating and/or safeguarding
more than 16,000 jobs in approximately 26,000 assisted firms. Moreover,
the activities of the Network are expected to generate and/or safeguard
1,000 jobs, as well as developing 900 new products, services or processes per
year. Environmental impacts are positive, due to environmental support provided
through networking, funding and investing in resource-efficient and low-impact
solutions through the Enterprise Europe Network. For instance, by 2011,
Network partners are expected to deliver environment-related services to about
7,500 SMEs and sign cooperation agreements with more than 400 environmental
service providers. Modest synergies among different components of the
programme are expected, most prominently between the Financial Instruments and
the Enterprise Europe Network. Concerning other activities, the European
Network of Female Entrepreneurship Ambassadors, inspired by Swedish and UK
national programmes which provided promotion and support to women wanting or
preparing to start up a new enterprise, will be complemented from 2011 onwards
by the European Network of Mentors for Women Entrepreneurs, which will provide
mentoring services to women entrepreneurs who have recently started a business.

(b) Efficiency: cost-effectiveness
for the financial instruments (measured in terms of cost per job created and/or
safeguarded) is estimated to be € 2735 per job. Concerning general
administrative costs, the impact of staff costs across the total budget is 5.8%
- mainly due to personnel costs.

(c) In terms of Coherence, the
intervention logic of the current programme will be linked to other aspects of
EU Competitiveness and SME policy, such as a reference to the relevant Flagship
Initiatives of Europe 2020 or the priorities of the Small Business Act.

Option 2: Discontinuation

The Discontinuation Option does not achieve
the policy objectives and its impacts are generally negative, both in social
and environmental terms, compared to the baseline.

(a) Effectiveness: The only positive
impact of this option would be in the area of cost savings.

(b) Efficiency: the discontinuation
option would lead to significantly decreased efficiency in programme management
by Member States due to the fragmentation of the management of individual
national programmes, instead of the benefits of coordination under a
pan-European programme.

(c) Coherence: the discontinuation
option would have negative results in terms of the inconsistency of national
approaches to competitiveness policy, as well as the absence of an EU dimension.

Option 3: Expansion

Different degrees of expansion of the
current Programme were explored using the scenario envisaged by the external
study as a benchmark, which is not considered to be a viable option.

Scenario 3a: Optimal Expansion

Scenario 3a would achieve the objectives of
the programme to a considerable extent, but at an unrealistic cost.

(a) Effectiveness: There are
positive direct economic impacts from the financial instruments, estimated
at an increase in GDP of approximately €2.3 billion per year and €7.2 billion
in additional lending/equity investment compared to the baseline scenario. The
activities of the Network are not expected to have any additional result
compared to the baseline scenario. The budget of the other activities
would also increase considerably under this scenario and, in qualitative terms,
activities to improve European competitiveness and entrepreneurship would lead
to relevant policies based on best practices being implemented at EU and Member State level. There are also positive social impacts regarding employment: a
major contribution is again expected to come from financial instruments,
which are expected to contribute to the generation and/or preservation of more than
50,000 jobs by assisting approximately 65,000 more firms compared to the
baseline option, as well as an additional 1750 jobs/year generated or
safeguarded by the Network. Positive environmental impacts are
expected to be significantly higher compared to the baseline, due to the
scaling up of initiatives in support of eco-sustainable processes and products
in targeted industrial sectors and tourism. The expansion of the Network
would spread the EU environmental rules to additional third countries,
generalising best practices.

(b) Efficiency: cost-effectiveness
is estimated to be € 4732 per job. The incidence of staff costs over the total
budget is expected to be 2.6%, mainly due to the significant increase in the budget
for financial instruments.

(c) Coherence: this Scenario expands
the current activities in order to reach out to other EU policies and
programmes, so as to maximise the potential for added value of the EU-level
intervention.

Sub-Option 3b: Balanced Expansion

The Balanced Expansion Option would achieve
the policy objectives in a
satisfactory manner by striking a balance
and allocating the scarce budgetary resources accordingly.

(a) Effectiveness: Economic
impacts of financial instruments are expected to
result in an increase of GDP of approximately €500 million above baseline level
and to generate about €1.7 billion in additional lending/equity investment. No
additional impact is expected by the Network in comparison with the
baseline option.

The budgetary allocation for other
activities would be increased to achieve a more
appropriate scale. A limited increase in the budget for support for European
competitiveness would make it possible to implement some of the new actions
included in the Europe 2020 flagship "An Integrated Industrial Policy for
the Globalisation Era" as compared to the baseline option, such as initiatives relating to corporate social responsibility. As regards SME policy development, the same budget as under the
baseline scenario would be maintained and the same impacts can be expected. As
regards SME business support in markets outside the EU, a considerable scaling
up of financial support would lead to an increased direct presence of SMEs in
key global markets, as they would be able to rely on specialised support.
Improved international cooperation would also have positive impacts on business
internationalisation.

As regards social impacts, the financial
instruments are expected to assist approximately 13,000 firms, thereby generating
and/or safeguarding 11,000 more jobs than under the baseline option.

Other activities are expected to enhance cooperation between policy-makers at EU and
national level, and a strong emphasis would be placed on identifying and
disseminating best practices, with appreciable effects. In general, the envisaged measures are designed to be open to all
groups of economic actors and therefore non-discriminatory. The activities envisaged
to promote entrepreneurship are an exception, as these are designed to also
target specific groups. Their aim is to promote and foster entrepreneurship
across European societies, including social entrepreneurs, long-term
unemployed, elderly workers, migrants and ethnic minorities. For instance, activities promoting entrepreneurship are expected to
lead to a direct employment effect of 300-400 additional jobs, due to the
internationalisation of beneficiary entrepreneurs.

Environmental impacts are not expected to be significantly higher than the baseline.

Aggregate impact due to synergies
among the different components of the programme is expected to be significant compared
to the baseline, as the reinforced financing of different measures is expected
to enhance cooperation between policy-makers at EU and national level. Strong
emphasis would be placed on identifying and disseminating best practices. The
Network would be the centre-piece connector of different components,
multiplying synergies between measures such as support to SMEs abroad and
international industrial cooperation. Another example of expected synergies is
the interplay between the Enterprise Europe Network and the financial
instruments. The “use” of the
Network for the promotion of the financial instruments will, for example, obviate
the need for further promotional activities. Activities
to improve European competitiveness, on the one hand, and the activities to
develop SME policy and to promote entrepreneurship, on the other, will also be
mutually reinforcing, as they are all intended to improve the framework
conditions under which European businesses operate.

(b) Efficiency: cost-effectiveness
is estimated to be €2824 per job. As regards general administrative costs, the
impact of staff costs on the total budget is expected to be 4.1%.

(c) Coherence: this Sub-Option
attempts to strike a viable balance between the different objectives in order
to maximise the potential for added value of the EU-level intervention, in several
fields related to the EU competitiveness and SME policy and identified in
Europe 2020 flagship initiatives and other EU programmes.

Sub-Option 3c: Focused Expansion

Option 3c would
partially achieve the policy objectives by focusing only on a specific
subset of the competitiveness and entrepreneurship problems of the European
economy.

(a) Effectiveness:  Concerning economic
impacts, positive quantifiable impacts are expected to flow from increased
access to finance. Compared to the baseline, the concentration of resources
mainly on the financial instruments would allow further reduction of the
estimated market gaps for SME financing. The structural effects on the venture
capital market would be limited. Compared to the baseline, however, financial
instruments are expected to generate an increase in GDP of approximately €0.3
billion and €1.1 billion in the form of additional lending/equity investment
facilitated.

Under this option, the
focus of the financial instruments would be addressing the financial needs of
growth-oriented enterprises and primarily those planning for
internationalisation. The increase in resources would allow more young
enterprises to benefit from loan guarantees and equity. More than half of the
resources in this scenario would be allocated to equity instruments.

Some additional impacts
compared to the baseline are expected by the Network due to the shift in
priority, to become an "entry point" for helping SMEs access to
finance. However, this effect is not quantifiable

The main economic costs
under this option would concern the opportunity costs of not tapping the
European added value which could be generated by the other, smaller-scale
support activities proposed under the baseline option and Option 3b. It is not
possible to quantify their economic impact as they are mostly indirect
instruments.

This option would involve
positive social impacts by the financial instruments, resulting
in an additional 5,300 jobs per year compared to baseline. Nonetheless, this
option would have a negative impact in terms of missed opportunities of
European added value resulting from the discontinuation of the smaller-scale
activities of the baseline scenario. Without activities to support SMEs abroad,
it is likely that European SMEs would be less successful in seizing the
opportunities in emerging markets that recent studies have highlighted, which
would mean negative economic and social impacts from this option.

Environmental
impacts are expected to be positive, but not
significantly higher than the baseline.

Aggregate impact due to
synergies among different components of the proposed programme under
this scenario is deemed to be inferior to the baseline scenario, as only
synergies between Financial Instruments and the Network will be present.

(b) Efficiency: Cost-effectiveness
is estimated to be €4385 per job. Concerning general administrative costs, the
impact of staff costs over the total budget is expected to be 4,9%, mainly due
to personnel costs.

(c) Coherence: This sub-option lacks
substantial synergies and linkages to other EU objectives and programmes, as it
focuses mainly on the access to finance of EU businesses.

6.
Comparison of options

In view of the above
considerations, the following tables assess the options in terms of impacts,
taking the baseline as the benchmark against which the other options are
compared (Table 2) and the criteria of effectiveness, efficiency and coherence
(Table 3).

The effectiveness of each of the two
expansion options considered for the financial instruments is sensitive to how
the measure is composed. Option 3b has a larger share of the guarantee
instrument than 3c and, therefore, due to the much higher leverage of
guarantees, benefits many more enterprises and generates more employment, which
leads to higher value added (GDP) per unit of budgetary resources. Option 3c is
based on new product and service concepts financed by venture capital, which
could generate higher value added and growth in the long term. Cross-border
venture capital spending can also contribute to the development of the equity
market and strengthen the entrepreneurial eco-system with longer-lasting
impacts on the economy.

Table
2            Comparison of the options' impacts

|| Budget || Economic || Social || Environmental

Option 1 (baseline) || €213 million/year || €660 million per year increase to GDP  €1.8 billion in additional lending/equity investment €200 million incremental turnover per year || 26,000 firms assisted 17,000 jobs created and/or safeguarded 900 new products, services or processes created per year || By 2011, involvement of at least 7,500 SMEs in more than 400 cooperation agreements signed with  environmental service providers.

Option 2 || €0 million/year || 0 || 0 || 0

Option 3b - moderate expansion || €340 million/year || €500 million additional increase of GDP €1.7 billion in additional lending and equity investment || 13,000 additional firms assisted 12,500 additional jobs created and/or safeguarded 200 additional start-up companies created || No change relative to baseline

Option 3c - focused expansion || €340 million/year || €300 million additional increase of GDP €1.1 billion in additional lending and equity investment || 5,300 additional jobs created and/or safeguarded || No change relative to baseline

Table
3            Comparing the options according to three dimensions

|| Budget || Effectiveness || Efficiency || Coherence

Option 1 (baseline) || €213 million/year || 0 || 0 || 0

Option 2 || €0 million/year || --- || - || ---

Option 3b - moderate expansion || €340 million/year || ++ || 0 || ++

Option 3c - focused expansion || €340 million/year || - || + || --

Legend:
(---) very negative, (--) negative, (-) slightly negative, (0) no change, (+)
slightly positive, (++) positive, (+++) very positive

Option 2 clearly fails
to address the underlying problems of competitiveness and entrepreneurship. Discontinuation
of the programme would also remove the EU contribution to dealing with the
effects of the economic crisis on small businesses.

The only realistic
choice, other than maintaining the status quo of Option 1, is between Options
3b and 3c. Whereas Option 3c concentrates the budget on two measures only,
Option 3b attempts to strike a balance between different initiatives, in order
to maximise the potential for added value of EU-level intervention across a
wider field of activity. It also entails striking a balance between the
different financial instruments. Option 3b, therefore, performs better in terms
of achieving the programme’s objectives and of providing a coherent set of
European support activities. Competitiveness means many things, and
concentrating resources on financial instruments and the Network alone would
not do the job. However, a wider range of activities does not come without a
price. It involves higher staffing levels and therefore higher administrative
costs. Moreover, the public consultation of stakeholders showed well over 80%
of respondents supporting all of the envisaged activities. As it offers the
most comprehensive solution, Option 3b is the preferred option.

7.
Monitoring and Evaluation

The system for the monitoring and
evaluation of the future programme would build on a robust hierarchy of logically
interdependent objectives with a corresponding set of
relevant indicators, and would adopt a
holistic approach to monitoring and assessing the performance of the activities
envisaged. Compared to the current programme, the
following improvements would be made to the data collection and analysis system, as well as to
the evaluation and monitoring approach:

·
formulation of a new set of specific
indicators and monitoring arrangements;

·
cross-reference to Europe 2020 flagship
indicators to steer the programme management
process and to provide additional input to the Europe 2020 monitoring process;

·
utilisation of counter-factual
methodologies, comparing samples of
beneficiaries with a similar set of non-beneficiaries, if relevant, and in order
to distinguish the impact of the programme on the proposed indicators from the
effect of changing economic circumstances.

·
recourse to thematic evaluations across the various components of the future programme, where
relevant.

The monitoring system and the indicators
used to assess the current programme have already been the subject of a
specific external study and of the EIP final evaluation. The recommendations
from these sources have been used to improve the monitoring of the current
programme, which will run until 2013. Moreover, the recommendations of a recent
IAS Performance Audit of the EIP will also be taken into account in the
implementation of the current programme and in the design of the monitoring
system and of the indicators for the next programme. To this end, a Performance
Report of the current programme is currently being drawn up.

The new programme will be subject to both an
interim and an ex-post evaluation, in order to assess progress towards the
objectives and the results. The interim evaluation will be completed by
end-2017 to feed into the preparation of a successor instrument to the
programme. The ex-post evaluation will be undertaken within two years of
completion of the programme.

In the case of the Financial Instruments,
the future monitoring and evaluation system will be based both on regular
information about the beneficiaries collected by the financial intermediaries
and intermittent sample-based surveys that will cover some elements in more
detail. Additional analyses will be carried out in the context of evaluations
of the programme. In particular, such evaluations will compare the development
of the beneficiaries with groups of enterprises that do not use the instruments
provided. The latter will require detailed analysis, since there are naturally
a number of factors that influence the development of an individual enterprise
which need to be distinguished from the impact of the programme. The most
important aspects to be assessed in such an exercise are actually the growth
and employment foregone because a guarantee was denied or a venture capital
application was turned down. The scope of the evaluations will also be extended
by considering impacts on the internationalisation of enterprises. Data required
for this purpose will be collected by means of surveys, on a sample basis,
rather than through regular reporting, in order to avoid imposing a
disproportionate burden on intermediaries and final beneficiaries.

[1]       COM(2011)500 final

[2]       http://ec.europa.eu/cip/documents/implementation-reports/index\_en.htm

[3]       http://ec.europa.eu/cip/public\_consultation/index\_en.htm

[4]       Study on the successor of the current programme and study on
tourism, conducted by Economisti Associati

[5]       Structural Business Statistics Database (Eurostat)

        http://epp.eurostat.ec.europa.eu/portal/page/portal/european\_business/data/database

[6]       European Business Test Panel, Commercial Disputes and Cross
Border Debt Recovery, 14.07.2010–13.08.2010, http://ec.europa.eu/yourvoice/ebtp

[7]       See footnote 3

[8]       Europe Innova, Meeting the challenge of Europe 2020, A report
by the Expert Panel on Service Innovation in the EU, February 2011

[9]       EIM, Opportunities for the Internationalisation of SMEs, 
June 2011

[10]     Ibidem

[11]     Over 50,000 different users of the IPR web portal and
e-learning services over the first 3 years, with over 2 million hits; more than
30 training seminars and interactive workshops run every year, of which 2/3
performed in Europe, to gather SMEs' concerns.

[12]     EIM, June 2011

[13] The budgetary
assumptions of this study were not consistent with the Commission’s final
proposal for the next MFF as the study was commissioned already in 2010, but
the quantitative analysis remains relevant. As a consequence, Scenario 3a is
omitted in the following tables.

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