EU small-business chief promises real help

If there is one man in Europe whose job it is to nurture the EU's 18 million small and medium-sized enterprises, it is Enterprise Commissioner Erkki Liikanen. He is the member of the Union's 20-strong executive agency responsible for the 230-million-euro SME budget and putting flesh on the European Charter for Small Businesses agreed by government heads at their summit in Feira, Portugal, in June. But what can he do in practical terms?

Erkki Liikanen has arguably the most difficult job in the European Commission.

It is not politically fraught like the trade portfolio nor susceptible to intense commercial pressure like antitrust. Instead, enterprise is weighed down by the force of unmet expectations.

The 50-year-old Finn - a former socialist finance minister who later negotiated his country's entry to the EU in 1995 - is relaxed despite the extra burden imposed by the European Charter for Small Businesses agreed by EU prime ministers in June.

The regulator plays a vital role of providing a framework that is conducive to economic prosperity, fair competition, job creation, respect for the environment, health and consumers' protection, he said. Enterprises want a space where they can develop and grow under fair conditions. These conditions include fair competition, easy access to finance, to new technologies and to a skilled work force, and a society that recognises entrepreneurship as a valuable and productive life skill that deserves to be fairly rewarded. They want policy-makers to ensure these conditions, and to keep the administrative and regulatory environment as simple as possible.

As SMEs are the vast majority of the 18 million European companies, we pay particular attention to their needs and demands. SMEs do not want one-off subsidies. They want less red tape, they expect to be able to register in a reasonable time and at a reasonable cost, they want effective access to markets in which to sell their products and services and they want to be able to obtain credit for their business ideas to be marketed.

They need and deserve the top-class business support services referred to in the charter. They also want easy and extensive on-line connections, in order to trade on-line and across Europe. Of course, it is not the role of policy-makers to tell entrepreneurs how to run their business. But I am convinced that it is important for them to be open-minded, innovative and adaptable. If we had more entrepreneurs of this kind, we would do much better. The power to create and exploit markets lies in the hands of businessmen and entrepreneurs, in their skills and motivation, in their willingness to invest and take risks.

The commission has started work on the ten key policy areas identified by the charter especially on the need for education in entrepreneurship. Liikanen's staff are surveying 'best practice' in this area in all member states and will advocate classes for teenagers in business-plan drafting as a basic feature of every educational curriculum, he said.

The commission has organised a conference together with the French government, which chairs all EU meetings until the end of the year, in Nice on 'Training for Entrepreneurship' starting Thursday (19 October). This is designed to showcase practical steps that are being taken around the EU to promote entrepreneurship in education and training.

A common complaint of European start-ups is the length of time it takes to register a new business in Europe compared with the US. This has been shortened - for example, in Spain, establishing companies now takes 25 instead of 81 days thanks to new 'single business windows' - but, says Liikanen, the waits are still too long.

To make starting up small businesses faster and cheaper, we have encouraged Member States to simplify and speed up incorporation and registration procedures. In this we have already had some success, but to take the process further we are currently establishing a benchmarking exercise with the national administrations to help them introduce operational improvements.

Red tape generally continues to infuriate SMEs. It is bad enough that national and regional governments impose demands on small businesses but it is intolerable to many that the EU is pushing through laws on maximum working weeks, anti-discrimination and worker consultation.

Liikanen understands concerns about euro red tape and points out that all proposed EU legislation undergoes a business impact assessment which we are reviewing in order to improve it and widen its scope. The commissioner will announce a tightened-up impact-assessment procedure on 28 November.

Having said that, Liikanen believes there are times when EU legislation can improve the lot of SMEs. The directive on late payments that came into force this summer is a case in point. It addresses the thorny issue of bad debts, which account for one insolvency out of four, and the loss of 450,000 jobs across Europe every year. The directive provides for bills to be settled within 30 days of receipt of goods or invoices, and it sets out the creditor's right for a penalty payment of 7% over the European Central Bank rate. This is the kind of policy improvement and enforcement that our enterprises need.

Getting down to muck and brass, what does the commissioner have at his disposal to help SMEs and how much will go into consultants' pockets?

Apart from the 230 million euro earmarked under Liikanen's new Multi-Annual Programme for Enterprise and Entrepreneurship (2001-2005), there is 363 million euro knocking about in the EU's 15-billion-euro 1998-2002 research programme, as well as a share of the huge regional aid budget.We intend to make applications easier and decisions faster in these fields, said Liikanen.We will ensure the availability of business support services and we will try to help where market failures do not yet allow small enterprises access to the right kind of finance. We will finance the network of Euro Info Centres: in the first eight months of 2000, the 273 EICs answered 450,000 inquiries and organised more than 4,000 business events.