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European Commission

MEMO

Brussels, 2 April 2014

VP Tajani visits Saragossa, Andalusia and Extremadura to help enhance the recovery of local SMEs

Just as in other countries in the European Union, Small and Medium-Sized Enterprises (SMEs) in Spain have suffered from the economic crisis over the last years and have only recently started to show signs of recovery.

To help SMEs in these regions emerge from the downturn and participate in the next economic growth cycle, the Commission Vice President Antonio Tajani, Commissioner for Industry and Entrepreneurship is travelling together with Daniel Calleja Crespo, Director-General of DG Enterprise and European Union SME Envoy, to Saragossa tomorrow, Seville on Thursday and to Merida on Friday.

The European Industrial Forum in Saragossa will be chaired by HRH The Prince of Asturias and is co-organized by the European Commission and the Regional Government of Aragón. The forum aims to facilitate the discussion between the different administrations and the industry to develop regional concrete projects that will be source of growth and employment in the near future. Commissioner Tajani will receive the Award "Aragón Empresa 2014" for his active and successful efforts in promoting Industry, SMEs and Entrepreneurship

Subsequently, Vicepresident Tajani will travel to Seville which is the starting point of the 3-day Mission for Growth to Andalusia and Extremadura. More than 700 European companies from Spain and 35 countries, including 20 Member States, will participate in this important event in Seville. The number of business opportunities generated is also impressive: more than 2.440 bilateral meetings amongst SMEs will take place. The meetings will be a wonderful opportunity to discuss business and technology transfer partnerships and internationalisation as well as fostering business co-operation opportunities in key sectors for Andalusia and Extremadura: aerospace, agro-food, tourism and cultural heritage, biotechnology and health, intelligent energy, security and defence, creative industries, environmental products and services, construction, mining and materials, and Information and Communication Technologies.

Vice President Tajani will co-host the event in Seville together with José Manuel Soria, Spanish Minister for Industry, Energy and Tourism and Susana Díaz, President of the regional government of Andalusia. Vice President Tajani will take the opportunity to introduce COSME, the new € 2.3 billion worth program to assist SMEs become more competitive by easing SME access to finance and to foreign markets (IP/13/1135). The conference will be followed by a business-to-business event. As part of the event, European Cluster Organisations and other participants will be given the opportunity to visit the aeronautical and solar energy clusters and solar energy centres.

Friday 4th April, Antonio Tajani will be travelling with Daniel Calleja Crespo to Mérida to open a second B2B matchmaking event involving more than 450 companies from other EU Member States together with José Antonio Monago, President of the regional government of Extremadura. The B2B meetings will cover the following sectors: Food and auxiliary industries, Transport and logistics, Intelligent energy, Tourism, cultural heritage and environment, Biomedicine and Information and Communication Technologies.

The event in Mérida takes place side-by-side to a cluster-to-cluster event where European Cluster Organisations will meet to discuss cluster collaborations in the following sectors: Aerospace/Aeronautics, Agri-Food and Packaging, Biotech and Health, Eco-Construction, Information and Communication Technologies, Metal Mechanical and renewable Energy.

1. Andalusia - Signs of recovery

Although Andalusia has suffered deeply during the recession (2012: 34,6% unemployment rate and 62,3% youth unemployment), the forecast for the future leaves room for cautious optimism. Andalucía has now a diversified economy in constant development and the years in which the region relied almost exclusively on two economic sectors – tourism and agriculture - pertain to the past.

From the EU perspective, figures are promising: in terms of economic development during the last EU financial programming period Andalusia has passed from a “Convergence Region” (2007 – 2013) to a “Transition Region” status in the Structural and Investment Fund programming for 2014 – 2020. Andalusia is the third region in Spain as far a number of enterprises is concerned – with more than 90% being micro-SMEs (of up to five workers). The social economy also plays an important role, accounting for almost 8% of the region´s GDP – ranking first in Spain in number of social economy enterprises.

The main economic sectors where Andalucía has and must continue to have a competitive position are agro-food (2010: 4,9% of added value), construction (2010: 11,9%) fisheries (added value of 245 million euros), tourism (2012: 11%), industry (2010: 11,4%), banking services (2012: 8,8% of Spain´s banking deposits) and transport services (2012: 5%).

In 2012 Andalusian exports attained 25 055 million euros with 27,5% coming from the agro-food sector (imports 31 246 million). The share of the aeronautic sector in exports is on the increase as well as high and medium technology products (20% of total exports).

The main export markets for Andalusian products are EU Member States (54% of exports) with increasing diversification towards America, Asia and Africa.

The recent SME performance review for Spain (MEMO/13/1045) illustrates that despite the regulatory efforts done, the number of both large and small enterprises have been severely affected by the crisis (in particular in the construction and manufacturing sectors) and there is still room for improvement on issues such as access to credit, state aid and public procurement for SMEs.

Economic future in Andalusia: Innovation and propelling new economic sectors

For many years now Andalucía has invested in the development of specialised sectors and increasing the potential of those where Andalucía has a large history of success. However, annual net growth remains low: 1,2% for the period 2005 – 2010 and there is room for improvement namely on two fronts: the creation of an attractive business environment for SMEs to develop and export, and the promotion of products and services based on innovation with a huge potential to reach out to global markets. This transformation has already happened in the aeronautic sector for instance, but efforts need to be made to promote entrepreneurship and foreign investment, attract qualified workforce and promote the access to third country markets of existing products and services.

This region clearly has the potential to undergo this change. Prioritisation in the use of European funds according to the region´s capacities and potential should be further streamlined to develop and modernize its economic tissue by placing creativity and innovation at the centre of the region´s strategy in the context of the European Semester, for instance. Attention to the potential positive effects that clustering can bring, or a targeted use of funds, instruments and networks (such as the Enterprise Europe Network) available for SMEs wanting to internationalise should also be considered.

2. Extremadura – Strong in service industry

Extremadura has suffered during the recession but there are reasons for cautious optimism for the future since the region has been diversifying its economy. Services now account for 67,2% of the local economy, construction for 13,4%, Industry for 13,4% and agriculture for 6,1% of Global Value Added (2011). The strength of agriculture has decreased whilst the weight of services have increased since 1986.

From Structural and Investment Fund perspective, Extremadura will need to maintain the effort to develop further: during the last EU financial programming period (2007 – 2013) the region was considered a “Convergence” region and in the current period (2014 – 2020) it has been categorised as a “Less developed” region. That categorization implies several opportunities for investors such as competitive labour wages, more productivity than the neighbourhood regions and an enterprise-friendly policy environment that increase the attractiveness of Extremadura as a place to do business. Moreover, the region has an important potential as a logistic hub connected to the main ports of the Iberian Peninsula (especially those of Portugal) and has been included in one of the 9 core network corridors of the Trans-European Transport Network (TEN-T).

Extremadura has great potential for progress, as efforts to revamp its economy and export figures show that agro-food is the highest export sector. Exports from Extremadura are 0,69% of total Spanish exports and the region has shown a trade surplus of 723 million euros in 2012

Economic future in Extremadura: Innovation and propelling new economic sectors as drivers for economic change

Extremadura´s enterprises, in general, need to make an effort on the promotion of innovation. The regional government and the civil society have been working together to identify the potential areas and sectors where the region has competitive advantages. The Research and Innovation Strategy for Smart Specialisation of Extremadura is an example of this collaboration. An effective implementation of this Strategy and a greater exposure and access for SMEs from Extremadura to EU funds and programs – in particular to COSME, Horizon 2020 and the SME Instrument -, is therefore a requisite for the development of innovation in Extremadura

Extremadura has the potential to undergo this paradigm change. The region´s capacities and potential should be further highlighted in the European Semester context and the programming of EU funds, in particular those available for SMEs, should be appropriately streamlined to develop and modernize the region´s economic tissue namely by placing innovation at the core of its development strategy. Authorities and SMEs from Extremadura should make a better a more targeted use of European Union funds, instruments and networks (such as the Enterprise Europe Network) available for SMEs wanting to innovate and internationalise.

Missions for Growth

These missions to Andalusia and Extremadura are part of the series of "Missions for Growth" to help European enterprises, in particular small and medium sized enterprises, to better profit from fast growing international markets. The Mission’s overall objective is the enhancement of the growth and competitiveness of European industry by better exploiting growth potential in non-EU countries via the reinforcement of economic co-operation and reforms, helping EU companies to access world markets, as well as deepening of bilateral policy co-operation in various policy fields.


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