Small and medium sized companies (SMEs) from both sides of the Atlantic should better profit from increased trade between the US and the EU. In the framework of the Transatlantic Economic Council stakeholders and government representatives agreed in Rome today to facilitate SMEs presence in both continents. Efforts to facilitate SME business support and market access in both continents is being explored, in particular by developing a framework for cooperation between the US International Trade Administration1 and the Enterprise Europe Network2, key business support organisations on both sides of the Atlantic. In line with the recent Letter of Intent signed by European Commission VP Tajani and US Deputy Secretary Blank, it is planned to further collaborate on initiatives and support for SMEs in the following areas 1) explore mutual ability to enter third country markets, 2) review specific cooperative measures for SMEs, such as joint promotion activities and support for innovation, and 3) mentoring and support measures for boosting entrepreneurship. In both continents SMEs are backbone of their economies, creating 85% of all new jobs in Europe. A key policy challenge for the EU and the US is to create adequate framework conditions so that the decision to exploring international markets is more easily undertaken by SMEs.
European Commission Vice-President Tajani, responsible for Industry and Entrepreneurship, said: "Internationally active and innovative SMEs are more successful and they create jobs in spite of the current economic crisis. Today's initiative should help more SMEs to extend their activities to the other side of the Atlantic. The US economy is doing better. SMEs should not miss this opportunity, in particular as a deepened economic cooperation with the US is under preparation. We need more SMEs to go international and to innovate - thus we can overcome the current crisis."
Only 13% of EU SMEs export outside the EU single market
One of highlights for transatlantic cooperation is the internationalisation of European and American SMEs by exploring mutual ability to enter third country markets. It is important to overcome difficulties for entrepreneurs which do not let them go international, such as difficulties in getting economic resources and adequate know-how and information about potential partners and foreign markets. Moreover knowledge of existing programs to foster internationalisation varies from 15% of small enterprises to 27% of medium enterprises. In fact, SMEs often lack the economic resources and adequate know-how and information about potential partners and foreign markets. EU and US SMEs are major job creators but fail to benefit from the opportunities the transatlantic market offers.
Current estimates indicate that only 13% of EU SMEs export outside the EU single market, 14% import from third country markets and only 3% are engaged in some form of international/technical cooperation (through branches, subsidiaries and joint ventures).
EU and US to look into solutions to improve access to finance
Improving SMEs performance by better access to finance plays a significant role in recovering European and American economies. This can be achieved by sharing experiences in the field of funding policies and programmes supporting the venture capital industry and encouraging private sector investors back to the market and thereby increase venture capital fundraising and investments. In addition, positive experiences from existing EU and US guarantee programmes will be used for the design of future debt instruments in order to stimulate increased bank lending.
In addition, to facilitate access to finance, the European Commission published recently a practical guide providing information on how to access over €50 billion of public finance in the 27 Member States. Secondly the Commission launched a European wide training campaign for the Enterprise Europe Network to help SMEs get access to finance. SMEs can contact one of 600 Enterprise Europe Network partners, who will be able to provide information on EU and national sources of finance (IP/12/609).
EU and US to jointly boost entrepreneurship
Essential for EU-US collaboration is fostering exchange of information and best practices relating to our respective programs of awareness raising, mentoring and support measures for boosting entrepreneurship. This collaboration targets young potential entrepreneurs, women, seniors, and other specific groups. These exchanges will address programme design, finance, management, evaluation and other relevant issues with a view to sharing lessons learnt and best practices.
Only recently VP Tajani stated: "If we want to stimulate growth in Europe, it is from our SMEs that we must start. Entrepreneurial potential in Europe is not fully exploited: 45% of all Europeans would like to become their own boss if they could, but only an average of 10% are actually self-employed today. If we could raise this percentage, we could have millions of new innovative and creative enterprises which would rejuvenate Europe’s economic basis, make it more robust, more job-generating and more resilient to stormy economic times".
The ITA assists in the development of U.S. trade policy in the global economy; creates jobs and economic growth by promoting U.S. companies; strengthens American competitiveness across all industries; addresses market access and compliance issues; administers U.S. trade laws; and undertakes a range of trade promotion and trade advocacy efforts.
The Enterprise Europe Network helps small business to make the most of the European marketplace. Working through 600 local business organisations, the EEN offers assistance in developing business in new markets, sourcing or licensing new technologies, accessing EU finance and EU funding