EUROPA - Gateway to the European Union
While modern and often successful, European business and industry cannot afford to stand still in the face of the challenges of innovation and globalisation. EU enterprise policy facilitates greater competitiveness and the creation of jobs. It pays particular attention to the needs of manufacturing industry and of small and medium-sized enterprises.
Stimulating growth in the knowledge-based and innovative industries that will drive the EU economy and create jobs requires a sound industrial fabric and the means to harness emerging technologies. Recent decades have seen rapid growth of the service sector, but manufacturing remains the bedrock of the European economy, accounting for three quarters of all EU exports.
Cutting-edge technology is vital to business and industry.
The focus of EU enterprise policy is on creating the right environment for investment in competitiveness and innovation, an environment in which strategically important sectors like aerospace and biotechnology, but also more traditional industries, such as textiles and the automotive sector, can prosper by being at the cutting-edge of technology.
Innovation requires critical mass, however. In practice, education and research institutions often lack the links to business which will make the difference between a good idea in a laboratory and a world-beating product. The European Institute of Innovation and Technology is being set up to help bridge that gap by creating “Knowledge and Innovation Communities” – highly integrated public-private networks of universities, research organisations and businesses, including small and medium-sized enterprises (SMEs).
Two thirds of all jobs in the EU are in SMEs. Ninety-nine per cent of all businesses in the EU are SMEs. Hence the Commission’s watchword in its enterprise policy: ‘think small first’.
There are special programmes and funding to promote entrepreneurship and skills, improve SMEs’ access to markets and improve growth potential (by boosting their capacity for research and innovation). SMEs are, for example, the primary focus of a Competitiveness and Innovation Framework Programme (CIP) with €3.6 billion over the period 2007-2013. The CIP in particular funds investments in energy efficiency and renewable energy sources, environmental technologies, and information and communication technology.
SMEs also receive special attention in the EU’s main programme for funding scientific research, known as FP7. The EU is a major source of funding for academic and industrial research and development through this programme, which has more than €7bn to spend each year.
SMEs can turn for information and advice to the Enterprise Europe Network, some 500 one-stop shops across the EU providing advice on doing business, and part-funded by the EU.
Reducing the paperwork for business is high on the EU’s agenda.
One of the fundamentals to the success of these policies is making sure that the internal market is working. The internal market, particularly the free movement of goods across frontiers, means all businesses have access to more potential customers, while facing greater competition. Lower prices and greater choice for consumers – and additional economic growth – are the result.
Single market legislation must constantly be fine-tuned, however, to keep up with technological progress. Member countries tempted to backslide into protecting their domestic industries must be kept up to the mark if all EU businesses are to continue to be treated equally.
There is still more 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, provide protection for consumers and maintain high environmental and social standards on the one hand, and the administrative burden (‘red tape’) that goes with them on the other hand. That balance is currently not right and the European Commission plans to cut red tape for business by 25% by 2012.
A system known as REACH – Registration, Evaluation, and Authorisation of Chemicals – is an example of how complex administrative procedures can be streamlined when 27 countries pool their efforts. The EU is building a single database of registered chemicals as a tool which is efficient both for business and for policymakers committed to protecting the environment.
The emphasis on jobs and growth does not mean that social and environmental issues have taken a back seat. The EU is equally steadfast in its promotion of responsible entrepreneurship, including skills development, respect for social and human rights, and more rational use of natural resources.
