Competing in the Single Market - SMEs and ... - Erhvervsstyrelsen

National governments themselves will have some difficulty having perspective on the strengthsand weaknesses that result from the asymmetric influence of one ministry or the other.Nevertheless, they may be aware of some consequences, and thus try to push to other actors– such as regional/local authorities or the private sector – the responsibilities for those taskswhich are likely to suffer. The other actors are likely to be more aware, as they are closer toand can witness the practical consequences of a bias in policy. They may thus try to push forcompensating mechanisms or undertake themselves which are then better handled that way.Governments assume the overall responsibility, however, for assuring governance structuresthat include such considerations. Thus, irrespective of the way in which national governmentsorganise the cross-cutting horizontal aspect of innovation policy, putting in place incentivesthat encourage systematic learning on the part of the different stakeholders should be viewedas a priority.excerpt from Andersson et. al.(2004c)It is apparent from all the data examined in the previous chapter that SMEs require support throughpolicies designed to meet their specific needs and to address the particular obstacles facing them. Atthe same time, policymakers must strive to link enterprise policies (both those geared for SMEs andLSEs) together with innovation policies, as part of their national innovation system (see Introductionand Box 9 above). Although SMEs have specific characteristics that drive the need for policy measurestailored to them, they should not be treated as an independent or isolated group, but rather as anintegral component of a functioning innovation system. SMEs, as an economic entity, constitute animportant dynamic element of the innovation system, through their potential for renewal – eitherwithin existing companies or through the appearance and disappearance of companies –, growth anddynamism. SME policies should be aimed at enabling a critical mass of SMEs to be innovative, tocompete internationally and to grow, rather than at necessarily preserving existing firms.This systemic approach contrasts with traditional SME promotion strategies, which rely heavily ondirect and subsidized provision of financial and non-financial services to SMEs. Government’s roleis to create an enabling environment for SME competitiveness and to develop markets for SMErelevantservices, rather than substituting for them (Hallberg (2000)). The role for government inthis area, as for policy intervention in general, should thus be motivated by different types of market,government and policy imperfections or failures. 2222For a discussion of the rationale for policy intervention see, for example, Andersson et.al. (2004c).59