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2015 SME Assembly - The obstacles experienced by small businesses at the heart of discussions

18-11-2015 / 20-11-2015

The logo of SME Assembly 2015
In the context of the Luxembourg Presidency of the Council of the European Union (EU), the 2015 European SME Assembly was organised by the European Commission in Luxembourg, from 18 to 20 November 2015, as the culmination of the European SME (small and medium-sized enterprises) Week.

On the last day of the conference, a number of sessions were dedicated to the problems experienced by SMEs, such as barriers within the internal market and the deficit in IT skills.

Costas Andropoulos, Head of Unit at the Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) of the European Commission, concluded the conference by noting that what the Commission will take away from these sessions is the need to continue to 'think small first', to fill the remaining gaps in the single market and review the rules on VAT.

During a number of sessions, some speakers called for greater simplification at a European level, as well as the establishment of a one-stop shop to facilitate company registrations, given that the vast majority of European entrepreneurs are of the opinion that the internal market is not working correctly. Remco de Bruin from the Netherlands Chamber of Commerce stressed that one of the major challenges is VAT, which causes problems for over 40% of businesses selling their products on line. As a result, only one third of those businesses sell their products across borders.

The other big challenge noted by Remco de Bruin is the absence of information on European rules: the majority of European businesses do not know the rules, and a quarter are not aware of the principle of mutual recognition. Thus, around 40% of businesses assume that they are obliged to adapt their products to the national rules of other Member States – product certification is another major concern among European SMEs. If businesses do not know their rights, they will not be able to state their case to the national authorities, which do not always apply European rules correctly.

Other problems discussed were the costs related to the delivery of products across borders, problems with financing experienced by SMEs, differing tax regimes and the cost of labour.

A number of participants stressed the opportunities that the digital economy brings, noting that increases in productivity between 2010 and 2014 were four times higher for companies selling online, when compared with traditional businesses.

As regards skills, almost four out of ten businesses stated having difficulties in recruiting candidates with the necessary skills. In order to bridge the gap, some stressed the need to bring the worlds of education and work closer together and include modules on entrepreneurship in education. One entrepreneur underscored the importance of mentors when setting up a business.

Another session focused on the question of refugees and their capacity to set up a business. Ulrike Rabmer-Koller from the Austrian Chamber of Commerce explained how her country can benefit from the presence of young refugees, particularly in certain regions where businesses are experiencing difficulties in finding apprentices. She gave the example of a region where 100 apprenticeships were available in the tourism sector, and only seven candidates applied. Nadia Qani, a German citizen originally form Afghanistan, spoke about her experience of setting up a business and stressed the need to persevere and to be enjoy appreciation.

Whereas some speakers pointed out that many refugees would have experience in entrepreneurship, others refuted this argument, explaining that the average age of refugees in Germany is 23 and that the majority do not have high-level qualifications.

Conference conclusions

Finally, Costas Andropoulos, Head of Unit at the Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG Grow) of the European Commission, and Sabine Soeder, Graphic Facilitator and Consultant, presented the conclusions of the conference.

"The SME Envoys Network have taken note of the situation faced by SMEs today" the representative of the Commission noted, and welcomed the fact that they wanted to move forward with carrying out an  analysis on how the Commission's single market strategy can help SMEs to grow.

He welcomed the fact that "for the first time in six years", European SMEs are starting to hire again. "The number of people employed by SMEs has risen, which bodes well for SMEs and Europe in general", he stated, noting that "this is only the beginning".

In that context, Costas Andropoulos stressed the need to ensure that "we can follow through on this trend and support SMEs with all possible and suitable policies". He also stressed the importance of helping the sectors that have suffered during the crisis, for example the manufacturing sector, so that they can "catch up with other sectors".

Costas Andropoulos concluded that "the discussions we have had and what we have heard is indicative of a promising future for SMEs". "What the Commission will take away from these sessions is to ’think small first', to bridge the remaining gaps in the internal market and to review the rules on VAT, on the condition that Member States are prepared to play their part", he stated.

Sabine Soeder welcomed the fact that through various discussions, each of the participants were able to pick up on new ideas and sources of inspiration for the future, for example, how to use crowdfunding and Twitter, and how to develop a business across borders. "Our discussions have taught us that entrepreneurship is a skill", she stated. "The key to it is resilience, trying and failing and trying again.If you are an entrepreneur, be different", she added.

  • Updated 21-11-2015