Toespraak Eurocommissaris Spidla over aanpassingsvermogen midden- en kleinbedrijf (en) - Europa NU

SPEECH/07/746

Vladimír Spidla

Member of the Commission with responsibility for employment, social affairs and equal opportunities

Adaptation of SMEs to change

"Restructuring†Forum:

Brussels, 26 November 2007

Ministers,

MEPs,

Ladies and gentlemen,

Not a day goes by without the announcement in the media of company restructurings, closures, acquisitions, mergers, privatisations and so on.

In reality, restructurings are a natural part of business life. In fact, to stay competitive in a rapidly-changing economic environment and in the face of increased competition, companies must constantly adapt and innovate. In other words, they have to restructure.

But the announcements that we hear essentially concern large companies. To tell the truth, the media are not very interested in what happens at the level of SMEs. Thus we get very little information from the media on the form of their restructurings, their effects and the manner in which they are conducted.

However, SMEs make up more than ninety-nine percent (99%) of all companies in Europe. That is why we speak of them in terms of "silent restructurings.

Importance of SMEs in economic life

In reality, SMEs are the main engine of growth and employment and they harbour enormous potential for job creation.

There are twenty-three (23) million SMEs in Europe, accounting for more than seventy-five (75) million jobs and over eighty percent (80%) of employment in certain sectors, such as textiles, construction and furniture. Hence the need to better understand the restructurings with a view to help them better anticipate and manage the changes that affect them.

The driving forces of change are, a priori , the same as for large companies, i.e. globalisation, the reorganisation of the value chain, increased competition, the liberalisation of markets, demographic changes, the ever-growing demand for better skills and qualifications.

SME-specific difficulties

On the other hand, SMEs are faced with specific difficulties resulting from their size and their company director's financial liability.

Unlike large companies, they have smaller resources at their disposal. In the event of financial difficulties, they do not receive much support from banks and financial organisations.

And let us not forget that SMEs are bound to the big companies by a whole network of relations of subcontracting or providing services. As a result of this interdependence, they can be directly affected by the closure or restructuring of the companies on which they depend.

The ageing of the population also affects them more closely. Estimates show that in the next ten years one third of entrepreneurs, in particular those at the head of family businesses, will retire. Six hundred and ninety thousand (690 000) SMEs and two point eight (2.8) million jobs will be affected by business closures every year.

Finally, SME employees do not receive the same support and same opportunities to return to work as employees of large companies. This results in a two-speed procedure.

Priority measures for SMEs

SME policy has become one of the pillars of the Lisbon partnership for growth and jobs since its renewal in two thousand and five (2005). Moreover, the European Council of March two thousand and six (2006) defined a series of priority measures to be implemented by two thousand and seven (2007) to fully exploit the potential of SMEs in Europe.

The main objective of the SME policy was to put their concerns at the heart of Community and national policies.

In the Communication "The European interest: Succeeding in the age of globalisationâ€, which constituted its contribution to the informal meeting of the Heads of State and Government in October, the Commission indicated that SMEs and entrepreneurship should figure prominently on the reform agenda.

It advocates freeing SMEs' potential for growth and job creation and taking full advantage of their capacity for innovation.

The main question is, therefore, how SMEs can cope with the changes and challenges that specifically affect them.

The answer lies in mobilising and adapting the existing policies and instruments at EU and national level to SMEs.

Let us first look at what is happening at policy level.

In the Communication " Towards common principles of flexicurity : More and better jobs through flexibility and security ," the Commission states that companies, particularly SMEs, should be able to recruit personnel whose skills better match their needs and who will be more productive and capable of adapting, resulting in increased innovation and competitiveness.

The flexibility of employment could be one of the main instruments for boosting the competitiveness of SMEs. They could draw on an increased flexibility and security of the contractual provisions in the context of a modern labour law and work organisation.

SMEs could also benefit from active labour market policies to reduce the periods of unemployment and facilitate transitions to new jobs.

At the same time, to be capable of increasing their capacity for innovation and qualification in the face of increased competition, SMEs should invest more in training their employees. This is a major challenge for SMEs today, particularly for the smallest of them which have limited financial and human resources.

Moreover, all the surveys conducted among SMEs show that their capacity for innovation depends on a complex palette of skills, networks and processes. To innovate, SMEs need more than ever to pool their resources, create networks and cooperate at local or branch level to establish effective policies to develop their human capital.

The main challenge is to be able to put into place life-long learning strategies in order to be able to anticipate and adapt to the speed of change and innovation.

Let us now look at what is happening with regard to instruments.

The Structural Funds that complement the National Funds are a prime instrument for SMEs. Let us not forget that SMEs are, above all, rooted in one territory, one employment area, one region.

The European Social Fund clearly identifies SMEs as an important area for support in the new two thousand and seven to two thousand and thirteen (2007-2013) programming period.

Almost twenty percent (20%) of ESF expenditure will be used directly to improve workers' skills and support the adaptability of companies. It is estimated that the ESF supports nine (9) million workers per year. The majority of these four (4) million work in an SME [1] .

Likewise, initial estimates show that around twenty-seven (27) billion euros from the European Regional Development Fund (ERDF) will be allocated to SMEs in order to facilitate their adaptation to change and to support regional strategies for innovation and networking for better access to capital.

Since the beginning of this year, the European Globalisation Adjustment Fund (EGF) can under certain conditions provide support for SMEs to participate in efforts to provide social support for workers made redundant as a result of major structural changes in world trade patterns.

Let us not forget the innovative projects related to SME restructurings, supported by Article six (6) of the ESF and EQUAL.

Finally, the task of the European Investment Bank (EIB), the EU's financing institution, is to support the implementation of investment projects which correspond to its priority objectives, including the promotion of SMEs. This task is supported by the activity of the European Investment Fund (EIF).

Let us also note that specific programmes have been set up to increase SMEs' potential for growth in a sustainable manner. The many programmes include the Competitiveness and Innovation Framework Programme (CIP), which has provided a budget of three point six (3.6) billion euros for the period from two thousand and seven to two thousand and thirteen (2007-2013) to support investments in the area of innovation, mainly in SMEs.

The Commission is also mobilising all the available instruments to strengthen the competitiveness poles and their cooperation at regional, national and transnational level.

In order for the adaptation to change to be a success, it is essential to note that nothing can be done without the key players in this process of change, i.e. the governments, the social partners, the researchers and everyone working on the ground, such as the Regional Development Agencies, the Chambers of Commerce, the European Business and Innovation Centres and the heads of the companies themselves.

Amongst these players, I would like to emphasise the role of the social partners, who on eighteen (18) October last, at the Lisbon Summit, presented for the first time a joint analysis of the main challenges facing the European labour markets.

In this document the social partners highlighted the enormous potential that SMEs represent in terms of job creation and the need to exploit this potential by means of an appropriate regulatory, financial and administrative framework. Among the challenges to be addressed, they emphasised the great need for training to be provided in SMEs and the shortfall in this area.

Conclusion

In conclusion, I would like to say that this Forum is an opportunity for all those involved in change in SMEs to exchange their experiences - good and bad - so that SMEs are better at anticipating crises and how to handle them.

We are counting on the partnership to anticipate and handle crises.

We plan to expand this partnership approach in a new Communication in mid two thousand and eight (2008), which will take stock of the measures taken since two thousand and five (2005).

I would like to thank you in advance for the debates that will be held over the next two days, debates which will enhance the Commission's Communication.

Thank you.

[1] Translator's note: These figures do not appear to be consistent.

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