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

These realizations, affecting the way the B4 countries will need to prioritise their activities insupport of SMEs over the coming years, are coming at a time when all institutions are busy tryingto understand the impact of and possibilities associated with accession to the EU. After a period ofintense activity and much progress, the B4 countries should have the opportunity to “take stock” andadjust policy mechanisms in order to achieve the optimal result. Policymakers must incorporate theSME agenda into the wider context of their country’s national innovation and/or competitivenessstrategy. It seems, however, that this may be increasingly difficult to achieve now, as there is so muchparallel focus on other priorities, which include accessing Structural Funds.Based on our overview of existing policies in the B4, and placing them in the wider context of spurringinnovation to increase national competitiveness and economic growth, we have identified a numberof key policy issues or priorities which we believe deserve the particular attention of policymakers:1) The role of policymaking – the possibilities and the limitations. Policymaking plays afundamental role in affecting/determining basic conditions for enterprise development andinnovation, investment climate, etc., and thus, in enabling long-term economic growth andcompetitiveness. At the same time, however, policymakers should not overestimate the abilityof policies to ‘create’ economic growth or innovation. As observed by Kuhlmann, one of thefundamental pitfalls when it comes to devising sound policies for innovation and enterprisedevelopment is the fact that economists tend to ignore political realities, while policymakerstend to overestimate the ability of public policies to stimulate the innovation system (Kuhlmannin European Commission (2003a), p.40). Policymakers seeking to design policies that willcontribute to long-term economic growth and competitiveness need therefore to be highly awareof both the significant possibilities of policymaking but also of its limitations. This dichotomy isparticularly important in countries with a strong faith in the ability of the government to intervenein markets, or with a long tradition of economic ‘dirigisme’ or planning, where there is a biastowards overestimating the ability of policies to steer economic development.2) The organisation of policymaking. Effective innovation enterprise policies require a horizontaland cross-sectoral approach to, and coordination of, policymaking. However, while nationalconditions for innovation and enterprise development are influenced by a broad spectrum offactors, - ranging from education, interest rates, incentive structures, to social structures andcultural aspects -, the institutions charged with designing and governing innovation policiestend to be narrow and vertical in their thematic focus. As a result, overall policy design is oftencharacterised by fragmentation, overlap and rivalries or competition for resources and decisionmakingpowers and competences. As stated by the European Commission, in most CandidateCountries, “The formulation and delivery is hindered by a lack of appropriate procedures, andby conflict between the various lobbies participating in the policymaking process” (EuropeanCommission (2002c). The experiences with innovation policy in both the B4 and other countriespresented and discussed at the workshop (see Appendices I-III), indicate that there is a need tocoordinate, evaluate, and possibly phase out some of, the numerous initiatives, and organisations,directed at promoting or facilitating innovation and SME development.3) Evaluation of policymaking. Directly linked to the organisation of policymaking is theimportance of establishing procedures and strategies for evaluating and monitoring innovationand enterprise policies. Whereas most European countries have implemented a number of policiesaimed at promoting innovation and enterprise development, many countries have no strategiesor mechanisms for systematically assessing the effectiveness and usefulness of these policies.Evaluation should be included as an integral part of innovation policy design. Good recent78