Entrepreneurship and competitiveness for SMEs Dialogue between Brazil and the EU EU Enterprise and Innovation Initiatives Carl James.

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

EU Enterprise and Innovation Initiatives

Carl James

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Competitiveness of EU enterprises

European enterprises face strong competition from global competitorsPressures on employmentSocial consequences

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Europe 2020 strategy

• The Europe 2020 strategy is about growth that is:

• Smart - education, research &innovation

• Sustainable - a low-carbon economy

• Inclusive - job creation and poverty reduction

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Governance

To ensure that the Europe 2020 strategy delivers

• An effective system of economic governance to coordinate policy actions between the EU and national levels.

• Enterprise and innovation are linked

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

EU and member states

EU importance is in:• Regulation and legislation• Coordination• Demonstration actions• Programmes in a very few

areas

Member states have far more resources

EU budget is between 1.10% and 1.05% of Gross National Income of the 27 member states.

• The expenditures of the large states like France, Italy and UK is six to seven times that of the EU.

• Education, health and social security are member state responsibilities

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

EU Budget Distribution

economic managementinnovationresearcheducation & culturestructural fundsagriculture and ruralexternal

1.10%3.16%5.14%

1.98%

39.44%

43.85%

5.32%

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Enterprise and Innovation

EU policy has divided into two aspects– Innovation policy

• Supporting radical innovations• In a global market• With a strong science base

– Enterprise policy• Supporting improvements in enterprises• Dealing with market problems• Supporting technology diffusion and skills

They are governed differently

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Hurdles for new member states

• Characteristics– Weak performance on innovation– Lack of strong linkages between science and

enterprises– Deficits in entrepreneurial culture– Undeveloped and inexperienced support

bodies– Lack of internal purchasing power and access

to broader markets

• Challenge to balance– Innovation support for long term leading edge

growth– Overall support to enterprises for optimum

medium term economic returns

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

EU Innovation Policy

9 strategic priorities– Intellectual property rights– Public procurement – Joint technology initiatives– Lead markets– European Institute of Innovation and Technology– Clusters– Innovation in services– Risk capital markets

Recognition that there is a huge gap between the performance of different member states

Entrepreneurship and competitiveness for SMEs

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EU Enterprise Policy & SMEs

Small Business Act– Deal with framework enterprise conditions

• Education and training for entrepreneurship; • Better legislation and regulation; • Strengthening the technological capacity of small

enterprises; • Making use of successful e-business models and

developing top-class small business support;

– Also moves toward innovation• Fostering eco-innovation and energy efficiency in

SMEs• Fostering creativity in entrepreneurship

Entrepreneurship and competitiveness for SMEs

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Governance of the two aspects

Innovation EU sets framework conditions for member states

Commission has its own initiatives, in which states and regions participate

EnterpriseEU sets framework conditions

States carry out support actions with assistance through agreed programmes

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Differences

Innovation• 3% of budget on

enterprise• Additional 5% on

research• Also member

state initiatives

Enterprise• Through

structural funds with 39% of budget

• Managed and delivered by member states & regional bodies

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Innovation policyCompetitiveness and Innovation

Programme will become part of Horizon 2020

Run through the Commission.It Includes elements on:• Innovation financing• Energy• Eco innovation• Europe Enterprise Network

Participation of member state bodies in the programme

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How the innovation programme works

CIP facilitates national actions in finance, networking, eco-innovation, energy, application of ICT.

Intermediary institutions in member states apply. These include regional governments and banks.

Member state bodies deliver to the SMEs. They provide 'Match funding', i.e. the initiative depends on a combination and agreement of the regional bodies to enter the programme

Enterprises

Enterprises can apply to one or two measures directly.

The research programme (Framework 7) takes direct applications

There are also programmes for the creative industries – media and culture programmes, where enterprises can apply.

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Assistance to enterprises

• Through structural fund instruments• As part of economic development

initiatives managed at a regional level

• Some transnational initiatives• Includes enterprises at all levels,

depending on regional programme and project – from social to traditional to leading edge

Entrepreneurship and competitiveness for SMEs

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Assistance through the structural funds

These programmes are agreed between EU and member state and jointly funded

EU contribution depends on wealth of state & region

Follow EU priorities Delivered by member state bodiesTargeted at economic developmentEnterprises are a principal beneficiary

Entrepreneurship and competitiveness for SMEs

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Typical programme prioritiesPriority 1: Business competitiveness,

commercialisation and innovation- Finance and advice for new businesses

- ‘Greening’ businesses

- Support for potential high-growth firms

Priority 2: Key drivers of sustainable growth- Development of research centres of excellence

- E-learning and training facilities

- Developing new products and services to make use of natural/historical/cultural assets

Priority 3: Peripheral and fragile communities- Support for regeneration projects

- Local business incubator and e-business facilities

- Transport links to local communities

- ICT/broadband links

- Renewable energy production

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

An enterprise development programme

• Negotiated and agreed at EU, national and regional levels

• Jointly funded• With agreed governance• With a set of indicators for success• With external evaluation procedures• Subject to audit and repayment

Entrepreneurship and competitiveness for SMEs

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Approaches respond to local or regional initiatives

• With regard CIP, intermediary bodies apply for support, but must have some of their own resources

• With regard to research and some other programmes, enterprises and universities apply direct

• With regard to structural funds, these are delivered to enterprises following an agreed programme, but still need local project leaders

Entrepreneurship and competitiveness for SMEs

Dialogue between Brazil and the EU

Examples of initiatives Innovation Programme

• Smart Grid initiatives among Belgian, and French electricity distributors

• 12 Italian banks involved in loan guarantee schemes for SMEs

• Smart Home initiative in Germany• Creative Cluster in Barcelona

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Examples of initiativesStructural funds

Usually operate at a regional level• Steinbeis foundation – non profit making technology

transfer body in Germany working in cooperation with local government to develop clusters across member state borders

• University of Karlsruhe, Germany - The online course for female entrepreneurs

• University of Hassalt in Belgium developing a renewable energy incubator

• EUROCEI in Spain introducing marketing through social networks to the craft sector

• TRIESTE in Italy – incubator in science park