While modern and often successful, European business can't afford to stand still in the face of fast-moving technological change and ever-keener foreign competition.
EU enterprise policy aims to ensure we keep up with our rivals while also creating jobs. It pays particular attention to the needs of the manufacturing industry and small firms.
Despite the rapid growth of services in recent decades, manufacturing remains the bedrock of the European economy, accounting for 75% of all EU exports.
The focus of EU enterprise policy is on creating the right environment for investment – not just for strategically important sectors like aerospace and biotechnology, but also more traditional industries, such as textiles and cars.
Future growth in the EU will be driven by knowledge-based and innovating sectors – but these require a sound industrial fabric and the means to harness the technologies that emerge.
This means bridging the gap between academia and business, so good ideas in the laboratory can be transformed into world-beating products.
The European institute of innovation and technology does this by creating “knowledge and innovation communities” – highly integrated public-private networks of universities, research bodies and businesses of all sizes.
Although many people associate business with household-name multinationals, actually almost all (99%) companies in the EU are small firms employing less than 10 people.
And with firms like this providing two thirds of all jobs in the EU, naturally they receive special attention in EU enterprise programmes and funding, such as:
The goals are to promote entrepreneurship and skills, improve small firms’ access to markets and boost their capacity for R&D.
Small companies needing information and advice can get this from Enterprise Europe Network, made of some 500 one-stop services across the EU, part-funded by the EU.
One of the fundamentals to the success of these policies is the EU's borderless market – especially the free movement of goods across frontiers.
This gives all businesses access to more customers – and more potential growth – while making them face greater competition, which keeps them on their toes.
However, there is much work to be done both to protect what has already been achieved and extend the benefits into more sectors.
The laws underpinning the EU's free markets must constantly be fine-tuned, to keep up with technological progress and prevent member countries backsliding into protecting national industries.
And more needs to be done to fully integrate the market in key business-support services, such as communications, transport, and power and gas supply. Competition and lower prices in these services feed through into lower prices when goods come to market.
Finally, the right balance must be struck between the need for rules (to keep markets open and protect consumers, the environment, workers, etc.) and the restrictions they place on business.
That balance is currently not right and the Commission plans to cut red tape by 25% by 2012.
However, EU-wide rules also help industry by removing the burden of separate administrative procedures in every country – for example the REACH system, a single database that enables one-stop registration of chemicals by industry.
Published in April 2013
This publication is part of the 'European Union explained' series