Promoting structural change in European business

Change is realised through: o Industrial policies o Enterprise policy

Industrial policy

Two types of policies Generic policies: o these apply equally to all sectors and include measures such as education, healthcare and others that improve the general economic environment at both a micro- and macro-economic level Selective policies: o these apply to particular sectors

Role of IP Create a landscape ( the legal and institutional framework) Modify the ecological environment (the technology and the market inputs and output) Change the fauna (the relative importance of each firm)

Drivers of EU IP Intangible factors (such as education) are more powerful drivers of medium term competitiveness than tangible factors (such as state subsidies) Innovation and intellectual property are the strongest drivers of the competitive environment Relative costs and productivity affect growth and profits – though ‘capital deepening’ tends to be counter-productive in terms of both profits and employment

Policy focus Establishing the boundaries within businesses can pursue their ambitions through establishing a predictable (yet adaptable) legal framework Establishing the necessary conditions to enable industry to realise its competitive potential Ensuring that the frameworks, institutions and instruments necessary for a vibrant industrial environment exist and work effectively

EU sectoral priorities Advanced manufacturing (such as through the spread of additive processes Key enabling technologies that have a widespread impact Bio-based products Clean vehicles and vessels Sustainable construction and raw materials Smart grids and digital infrastructures

EU enterprise policy

What is entrepreneurship? Exploitation of creativity and/or innovation Capability to undertake and understand risk for the construction of new businesses It can occur across any sector or type of business

EU entrepreneurship Policy priority Vast majority of EU businesses are SMEs Central to employment and value added Long term impact on change and innovation

But EU entrepreneurship is weak … why? Europeans tend to be more risk averse and less willing to accept the uncertainties connected with self-employment A dearth of entrepreneurial role-models for young people Difficulties in starting and operating a business

High failure rate of SMEs due to … The increasingly intricate legal, fiscal and administrative environment which is particularly burdensome for SMEs An inability to access research programmes and exploit their results Relatively inadequate management and training capabilities Additional borrowing costs arising from the higher risk attached to lending to SMEs Scale impediments in accessing new markets

Small Business Act is flagship EU policy Creating an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded Ensuring that honest entrepreneurs who faced bankruptcy quickly get a second chance Designing rules according to the `Think Small First’ principle Making administrations responsive SMEs needs Adapting public policy tools to SME needs and facilitate their participation in public procurement and better use of state aid facilities for SMEs Facilitating SMEs access to finance and develop a legal and business environment supportive to timely payments in commercial transactions Helping SMEs to benefit more from the opportunities offered by the SEM Promoting the upgrading of skills in SMEs and all forms of innovation Enable SMEs to turn environmental challenges to opportunities Encouraging and supporting SMEs to benefit from the growth markets

SBA supported by: Making smart regulation a reality for SMEs Paying closer attention to the financing needs of SMEs Pushing for better market access Aiding SME resource efficiency Promoting the virtues of enterprise for job creation and growth