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

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There are many areas encompassed within the realm of SME policies. The International FinanceCorporation (IFC) has segmented SME policies/interventions into three areas: business environment,financial services, and business development services. Examples of specific policy measures areincluded in Table 15 below.Table 15: Market-Oriented SME InterventionsOpen Access to Market,Accelerate Market DevelopmentInvest in Public Goods, BuildInstitutional CapacityReduce and RationalizeTraditional Public InterventionsBusinessEnvironment• Competition policy• Licensing and registrationrequirements, administrativefees• Commercial transactions law• Intellectual and commercialproperty rights• Tax, labour legislation• Infrastructure (transport,ports, market facilities,communications, informationtechnology)• Information (markets,standards, technologies)• Monitoring of SME performanceand impact of policies andinterventions• Reconsider policies thatreserve certain sectors forsmall-scale enterprises orgrant them special protection• Seek greater neutrality acrossfirm sizes in tax and labourlegislation and enforcementFinancial Services • Financial sector competitionpolicy• Interest rate ceilings• Regulations governing leasing,venture capital, equitymarkets• Innovation in loan products,lending methodologies, deliverymechanisms, risk assessmentmethodologies• Credit bureaus, registries• Training and TA to financialinstitutions serving SMEs• Reduce direct lending throughpublic financial institutions• Reduce SME lending(portfolio) requirements onfinancial institutions• Eliminate subsidized creditlines and credit guaranteeschemesBusinessDevelopmentServices• Target subsidies for marketdevelopment to specificmarket failures• Information on serviceproviders, impact of services• Enforce competition in servicemarkets• Innovation in products, deliverymechanisms• Development of performanceand impact indicators• Increase cost recoveryfor publicly-provided orsubsidized services• Reduce duplication acrossagencies in services provided• Use the private sector todeliver servicesSource: Hallberg (2000)The EU has outlined ten areas for support and action in its Charter for SMEs and MultiannualProgramme for enterprise and entrepreneurship (described in chapter 2 of this report). These areas aremeant to address a number of barriers to SME development in the Candidate Countries (as identifiedin a recent survey of SMEs in Europe, including the Candidate Countries):The limited access to finance seems to be one of the serious barriers to economic growth andprosperity. One reason is that the small enterprises are not considered to be a priority for thebanking sector as they are perceived to be high risk. Another reason is that small enterprisesin the Candidate Countries have yet to develop an entrepreneurial spirit and still lack themeans to know their needs and opportunities, in particular in terms of management orsupport services. In the area of administrative simplification progress has been made butfurther efforts are still needed to increase the efficiency of the public administration at all levels.European Commission (2003j, p.18)In the following section, we take a closer look at the breadth of policies affecting SMEs, and at theinterrelation between SME policy and innovation policy. We will describe both the institutionalstructure and the programmes/policies in place, as well as comment on progress-to-date and priorityareas for the future for the B4 countries.SME Policies in the B4According the European Commission (2002e), after the fall of the Berlin Wall, SME developmentin post-communist countries rapidly became one of the principal economic reform issues. Theinstitutional structure and policy mechanisms supporting SMEs have developed quite rapidly inrecent years.60
Institutional StructureIn all of the B4 countries, there is widespread awareness of the economic significance of SMEs, andof the need to develop specific mechanisms to support their growth and competitiveness. In eachcountry, there are a number of institutions acting within the realm of SME and innovation support,and there are a wide range of projects and policy mechanisms in place. In general, the Ministry ofEconomy plays the leading role in establishing the key programme documents/guidelines for SMEpolicies (see Figure 15). SME policies are generally dealt with in parallel to (rather than in connectionwith) innovation policies, with a separate division for each area. This division of responsibilities leadsto a tendency to view SMEs in a vacuum, rather than as an element of coherent policy for innovationand enterprise development, and makes both coordination and prioritization of policy measuresissue-areas (for a general discussion on innovation policy governance see also Box 9).Figure 15: SME and Innovation System Governance in the B4EstoniaEstonian Governmentand ParliamentInnovationSub-CommitteeGovernment R&DCouncilResearchSub-CommitteeMinistry of EconomicAffairs andCommunicationTechnology andInnovation DivisionMinistry of Scienceand EducationEnterprise EstoniaEstonian ScienceFoundationScienceCompetenceCouncilSource: European Commission (2003m)LatviaSource: European Commission (2003n)61
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Sylvia Schwaag SergerEmily HanssonC
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About the International Organisatio
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PREFACEAccession to the Single Mark
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enterprise development. There are n
Page 12 and 13: BOXESBox 1: The ‘Knowledge-Based
Page 15 and 16: INTRODUCTIONAfter more than 10 year
Page 17 and 18: CHAPTER 1: FROM STABILISATION TO IN
Page 19: increased competitive pressure as B
Page 22 and 23: Box 2: On Innovation and Innovation
Page 24 and 25: Table 5: GDP Growth 1995-2003 in Se
Page 26 and 27: Table 7: Relative Strengths and Wea
Page 28 and 29: Box 3: The Indicator ProblemExistin
Page 31 and 32: CHAPTER 2:BALTIC SMEs - AGENTS OF F
Page 33 and 34: Table 9: Average Annual Growth of S
Page 35 and 36: Box 4: Overview of Selected Multina
Page 37 and 38: The Role of SMEs in Transitional Ec
Page 39 and 40: e to the potential advantage of the
Page 41 and 42: A common measurement of business ac
Page 43 and 44: Figure 8: Labour Productivity per P
Page 45 and 46: Figure 10: Employment in Med/Hi-tec
Page 47 and 48: Summing up, there are fewer economi
Page 49 and 50: Overall, SMEs tend to lack the fina
Page 51 and 52: Figure 12: Enterprises with Innovat
Page 53 and 54: Figure 14: Proportion of Enterprise
Page 55 and 56: Table 14: Barriers to Innovation fo
Page 57 and 58: Some interesting examples of cluste
Page 59 and 60: CHAPTER 3:POLICIES PROMOTING SMEs A
Page 61: National governments themselves wil
Page 65 and 66: EU countries (innovation relay cent
Page 67 and 68: LITHUANIAAgency/OrganisationLithuan
Page 69 and 70: From the private sector, the chambe
Page 71 and 72: On the whole, the B4 have relativel
Page 73 and 74: LITHUANIAProgramme/Policy DocumentI
Page 75 and 76: Table 19: B4 National Rankings of A
Page 77 and 78: Box 11: Structural Funds to the Can
Page 79 and 80: Box 12: On SMEs and FinancingIt doe
Page 81 and 82: examples of evaluations of national
Page 83 and 84: CHAPTER 4:CHALLENGES AND RECOMMENDA
Page 85 and 86: General challengesBased on our own
Page 87 and 88: the above-mentioned channels. 27 On
Page 89 and 90: the EU average and particularly wit
Page 91 and 92: RecommendationsBased on the challen
Page 93 and 94: CHAPTER 5:A VISION OF A NORDIC-BALT
Page 95 and 96: addition, they are the most advance
Page 97 and 98: countries. One such sign is the rap
Page 99 and 100: CONCLUSIONSEU accession will not re
Page 101 and 102: REFERENCESAlfonso, Antonio, Ludger
Page 103 and 104: European Commission (2003f), Compre
Page 105 and 106: Eurostat (2004a), SMEs in the Candi
Page 107 and 108: Statistical Office of Estonia (2004
Page 109 and 110: APPENDIX I:Agenda for Working Group
Page 111 and 112: DAY 2:POLICY SOLUTIONS9:30-10:30 In
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APPENDIX II:Participants in the IKE
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APPENDIX III:Conclusions from the I
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APPENDIX IV:Summary of the Panel se
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Regarding the role of policymaking,
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APPENDIX V:Description of Field Stu
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Mr. Miroslaw MarekMr. Talis Millers
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IKED - International Organisation f
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