1. THE SMALL BIZ CARBON FOOTPRINT BREAK

    The EU Green Deal will change almost every aspect of European life in its ambition to achieve EU carbon neutrality by 2050. Europe needs a bold plan if we are to fight climate change and stimulate sustainable growth. If the plan is going to work, it needs to be at the centre of the growth strategy; it needs to change the way we invest in green innovation to promote the capacity of entrepreneurs to turn climate crisis to economic opportunity; and it needs to provide support to those that will be adversely affected by the changes. And it is critical that SMEs are central to the different planks of action whether it is the circular economy package; green investment; or achieving the transition to zero or net zero carbon.

    There are many steps to take to turn challenge into opportunity. A first step for entrepreneurs and SMEs would be for the EU to introduce a “small business carbon footprint break” that would both alleviate burdens by reviewing product footprint declarations and incentivise innovation by introducing financing conditions proportionate to the climate-related risks businesses create.

  2. DIGITAL RISK ASSESSMENTS FOR SMALL BUSINESSES

    Digital risk is one of the most significant yet underestimated threats facing SMEs in Europe. In the age of Big Data, online trading and market digitisation, no business can escape exposure to at least some form of digital risk. Businesses that suffer cybersecurity incidents face repercussions that range from negative financial outcomes to reputation damage. In the case of SMEs, the consequences can be especially severe, as statistical data indicates that 60% of those suffering a cybersecurity incident are out of business within six months. [1]

    In partnership with ENISA (European Union Agency for Cybersecurity), the European Commission should develop a self-assessment online tool in order to enable SMEs to evaluate their needs on digital security and take appropriate action to mitigate the risk. This software should be free for entrepreneurs to download and regularly updated in order provide a trustworthy evaluation of their ICT systems.

    [1]National Cybersecurity Alliance Survey, 2019

  3. A DIGITAL SKILLS PASSPORT

    Europe is experiencing its greatest skills shortage since records began and employers are finding it difficult to recruit people with even the most basic digital skills.[1] The European Commission estimates that there will be up to 500.000 unfilled vacancies for ICT professionals alone in 2020[2]. In our age of digital revolution, the EU must focus on leveraging and fast tracking best practice in education and upskilling and ensuring mobility to plug skills gaps. In terms of upskilling ESBA believes the EU should put more investment into providing the long term unemployed and low skilled with basic digital skills so that current efforts can be rolled out across the EU and all those benefitting can acquire EU wide certification.

    We also propose the creation of a Digital Skills passport for ICT-professionals to help new actors to enter the field and foster higher mobility thanks to EU-wide recognition.

    [1] OECD, Skills for Jobs Report, 2018
    [2] European Commission, The Digital Skills Gap in Europe, 2017, Brussels

  4. THE EUROPEAN ACADEMY FOR ENTREPRENEURS

    Europe is still playing second fiddle to the US when it comes setting up and growing new businesses. The reasons are well documented and member states and the EU have been steadily working to reduce the barriers to business creation, to provide easier access to finance, or to overcoming business failure. And yet according to ESBA’s entrepreneurs they would most value access to entrepreneurial education and upskilling whether in financial planning, or management, or digital skills. To help entrepreneurs of all ages to continue to develop skills in running small businesses, ESBA recommends the creation of the European Academy for Entrepreneurs. The Academy would provide online support but also access to training at the most local level across Europe thanks to a collaboration between the Enterprise Europe Network and the rebooted Erasmus for Entrepreneurs programme.

  5. MANDATORY 30% PROCUREMENT BY VOLUME TO SMES

    Every year public authorities in the EU spend around 14% of GDP on public procurement (excluding utilities) which amounts to more than EUR 1.9 trillion.[1] Public procurement is clearly important for competitiveness and is crucial for solving many of the key policy challenges that the EU is facing including sustainable growth and jobs. And yet SMEs are under-represented in EU public procurement compared to their overall weight in the economy.

    In order to encourage more SMEs to tender there needs to be better enforcement of the obligations of EU public authorities under the 2014 Public Procurement directive; with special attention given to the division into lots and simplification of requirements. Finally, the European Commission and Member States’ local authorities should enable training and improve the access to information to SMEs; especially given the limited resources and technical skills SMEs lack. Ultimately there also needs to be a bigger volume of procurement available to SMEs so ESBA calls on the EU to include in the forthcoming SME strategy a requirement for all member states to ensure that a minimum 30% of all procurement is accessible to SMEs through a procurement SME test.

    [1] European Commission, European Semester Thematic Factsheet
    on Public Procurement, 2017, Brussels

  6. SCALE EU FINANCING FOR WOMEN ENTREPRENEURS AND A TARGET OF 50% GENDER BALANCE IN EIB INVESTMENT DECISION-MAKING BODIES

    Women set up fewer businesses than men and the businesses they do set up tend to be smaller and employ fewer people. We also know that women entrepreneurs are discriminated against when it comes to access to finance[1] and that this has a critical impact on their ability to scale. Financial institutions, investors, venture capitalists across Europe are working for change but the results are still piecemeal and vary from one member state to another.[2] ESBA members believe that the EU and in particular the EIB Group must set an example by scaling the financial products it offers to Women Entrepreneurs and by setting a 50% gender balance target for all EIB bodies that decide on investments. Yet we also know that the businesses which women establish are more likely to survive and be on a sustainable long-term path. Women are a good investment.

    ESBA fully supports welcomes the EIB group’s ‘Impact and Invest Approach’ that helps to embed a gender perspective throughout investment and project cycles. ESBA believes this exercise is a crucial preliminary step, that needs to be built upon if EIB is to reach the 50% target of gender-balanced EIB investment decisions over the next five years.

    [1]Boston Consulting Group, Why Women-Owned Startups Are a Better Bet, June 2018
    [2]European Investment Bank, Protect, Impact, Invest; The EIB Group Strategy on
    Gender Equality and Women’s Economic Empowerment, 2016, Luxembourg

  7. 30 DAYS (OR PAY)

    According to a European Commission review [3], more than half of SMEs in the EU are not paid on time and in most of those cases the payment exceeds 60 days. This has severe repercussions on cash flow and increases the risk of bankruptcy – in the construction sector one third of bankruptcies are due to late payment. And only 30% of those SMEs that suffer from late payment take advantage of the compensation due to them for fear of repercussions. The European Commission has been working with member states and business organisations across the EU to monitor payment practices and find solutions to poor practices. A range of actions are being taken including better enforcement; support for SMEs on credit management; access to Alternative Dispute Resolution etc. However this do not appear to have had any significant impact on payment practices and we recommend stricter measures coupled with stronger sanctions so that late payers suffer significant reputational damage. Those stricter measures were adopted in several EU Member States[4] (such as Denmark, Finland, Sweden, the Netherlands, Spain and France) and proved their efficiency in countering late payments.[5]

    [3] European Commission, Ex-post evaluation of late payment directive, 2015, Brussels
    [4] European Commission, Business-to-Business transactions: A comparative analysis of
    legal measures vs. soft-law instruments for improving payment behaviour, 2018, Brussels
    [5] Dun&Bradstreet & Cribis D&B, Payment Study, 2016

  8. SET UP A COMPANY ONLINE AND START TRADING WITHIN TWO WEEKS

    The Small Business act invited all Member States to enable entrepreneurs to register a company within a week and accelerate the start of commercial operations by reducing and simplifying business licenses and permits. Although most EU Member States implemented a one stop shop for SMEs and online desks, the ‘once only’ principle remains under-applied, which is delaying the setup of SMEs.[1]

    In order to enable entrepreneurs to start trading within two weeks, ESBA recommends interconnected public administration databases to fasten answers of administrations and avoid multiple procedures. EU Member States should also move towards the harmonisation of such procedures to ease cross-border business set up.

    ESBA, the independent voice for European Entrepreneurs, invites the European Commission to act on these targeted and practical measures, to work with and through the SME community across Europe in securing Europe’s sustainable growth and competitiveness.

    [1] European Commission, Annual Report on European SMEs 2018/2019; Research &
    Development and Innovation by SMEs, 2019, Brussels