Small enterprises are the backbone of the European economy. They are a key source of jobs and a breeding ground for business ideas.
Small enterprises are the most sensitive to changes in the business environment. They are the first to suffer if weighed down with excessive bureaucracy. And they are the first to flourish from initiatives to cut red tape and reward success.
The European Charter for Small Enterprises set goals for the European Union to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth, more and better jobs and greater social cohesion.
Small enterprises are considered as a main driver for innovation, employment as well as social and local integration in Europe. The creation of the best possible environment for small business is a priority in the EU, acknowledging: the dynamic capacities of small enterprises in answering to new market needs and in providing jobs; the importance of small business in fostering social and regional development, while behaving as examples of initiative and commitment; that successful enterprise deserves to be fairly rewarded; that some failure is concomitant with responsible initiative and risk-taking and must be mainly envisaged as a learning opportunity.
The situation of small business in the EU was improved by action to stimulate entrepreneurship, to evaluate existing measures, and when necessary, to make them small-business-friendly.
To this end, the EU strives to strengthen the spirit of innovation and entrepreneurship that enables European businesses to face the challanges ahead. This is achieved via a regulatory, fiscal and administrative framework conducive to entrepreneurial activity and improving the status of entrepreneurs.
The EU tries to ensure that small business has every access to markets on the basis of the least burdensome requirements and facilitates availability to the best research and technology.
Of paramount importance is the insistence that small enterprises have better access to finance throughout the entire life cycle of a business. The EU aims to improve SMEs' performances continuously by listening to the voice of small business and promoting top-class small business support.
Within the EU, governments are committed to working along the following guiding principles, taking due consideration of small business needs:
1. Education and training for entrepreneurship - Europe nurtures entrepreneurial spirit and new skills from an earlier age. General knowledge about business and entrepreneurship is taught at all school levels. Specific business-related modules are an essential ingredient of education schemes at secondary level and at colleges and universities. The EU aims to encourage and promote youngsters' entrepreneurial endeavours, and develops appropriate training schemes for managers in small enterprises.
2. Cheaper and faster start-up - the costs of companies' start-up are evolving towards the most competitive in the world. Countries with the longest delays and most burdensome procedures for approving new companies are encouraged to catch up with the fastest. Online access for registration is commonplace within EU countries.
3. Availability of skills - the EU endeavours to ensure that training institutions, complemented by in-house training schemes, deliver an adequate supply of skills adapted to the needs of small business, and provide lifetime training and consultancy.
4. Improving online access - public authorities are urged to increase their electronic communication with the small business sector. Thus, companies will be able to receive advice, make applications, file tax returns or obtain simple information online, therefore faster and more cheaply.
5. More out of the Single Market - small businesses are feeling the benefits of the reforms aiming at the completion of a true internal market that is user-friendly for small business. These include electronic commerce, telecommunications, utilities, public procurement and cross-border payment systems. At the same time, European and national competition rules are vigorously applied to make sure that small businesses have every chance to enter new markets and compete on fair terms.
6. Taxation and financial matters - tax systems are being adapted to reward success, encourage start-ups, favour small business expansion and job creation, and facilitate the creation of new small enterprises. Member states have been urged to apply best practice to taxation and to personal performance incentives. Entrepreneurs need finance to translate ambitions into reality. In order to improve the access of small enterprises to financial services, the EU strives to: identify and remove barriers to the creation of a pan-European capital market and to the implementation of the Financial Services Action Plan and the Risk Capital Action Plan; improve the relationship between the banking system and small enterprises by creating appropriate access conditions to credit and to venture capital; improve the access to the structural funds and welcome initiatives by the European Investment Bank to increase funding available to start-ups and high-technology enterprises, including equity instruments.
7. Strengthen the technological capacity of small enterprises - the EU emphasis lies on strengthening existing programmes aimed at promoting technology dissemination towards small enterprises as well as the capacity of small businesses to identify, select and adapt technologies. The EU enhances technology cooperation and sharing among different company sizes and particularly between European small enterprises. More effective research programmes focus on the commercial application of knowledge and technology.
The EU helps small enterprises adapt quality and certification systems. It also ensures that a community patent is available and easily accessible to small enterprises. It fosters the involvement of small enterprises in inter-firm cooperation, at local, national, European and international levels as well as the cooperation between small enterprises and higher education and research institutions.
Actions at national and regional levels are aimed at developing inter-firm clusters and networks. Pan-European cooperation between small enterprises using information technologies are enhanced, best practice in cooperative agreements spread, and small enterprises cooperation supported to improve their capabilities to enter pan-European markets and to extend their activities in third country markets.
8. Successful e-business models and top-class small business support - the EU commission and member states encourage small enterprises to apply best practice and adopt successful business models that enable them to truly flourish in the Union's internal market. Member states and EU activity are coordinated to create information and business support systems, with easy access to networks and services that are relevant to the needs of business. Member states ensure EU-wide access to guidance and support from mentors and agencies, including websites, and the European Observatory on SMEs.
9. Develop stronger, more effective representation of small enterprises' interests at Union and national level - a complete review of how the interests of small businesses are represented at EU and national level was effected, including through the social dialogue. Member states are committed to progress towards these goals using the open method of coordination of national enterprise policies. The Multiannual Programme for Enterprise and Entrepreneurship, the Cardiff process on economic reforms, the Luxembourg process on employment policies and other Community programmes and initiatives are used to this end. Regular monitoring and evaluation of progress is achieved annually on the basis of a Commission report on the relevant issues at the spring summits.
Within the EU, use is made of effective indicators to assess progress over time and in relation to the best in the world. The EU's prime target is to reinforce the constant search for better practice in all fields that affect small businesses' optimal performance. All the above points to the positive impact joining the EU will have on Maltese small enterprises.