The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I attended an Informal Competitiveness Council (internal market and industry) organised by the Irish presidency in Dublin on 2-3 May. The Informal Council focused on “Innovative pathways to jobs and growth” with a particular emphasis on the needs of SMEs.
Before Council began, there was a meeting between Ministers to discuss contracts for competitiveness and growth. In a full round table, most Ministers expressed caution about the introduction of contracts for competitiveness and growth.
The Council itself began with a plenary session introducing the theme “SMEs as a driver for European growth”. Keynote speakers included Commissioner Tajani, and a number of speakers from academia and business. There was no debate in this session itself.
The plenary then broke into separate working groups. I attended the session on access to finance, given we are a leader in Europe on this issue. In this session, Minsters agreed that the current model is close to being broken. Governments, therefore, needed to consider how to get banks lending; how far they can fill the gap in SME funding; and support/encourage alternative forms of finance such as crowd sourcing.
The consensus was that the EU should focus its attentions on completing the financial reforms that are already being discussed and looking again at structural funds and how these can be directed to supporting SMEs.
Concurrent workshops focused on “SME internationalisation” and “Cities and regions as drivers for economic growth”. There was no UK participation in these workshops, but feedback from the groups was as follows.
On cities and regions as drivers for economic growth, Ministers noted that: clusters should build on things that already exist (e.g. universities and traditional industry); member states should aim for a bottom-up approach that reflects the needs of particular regions; and clusters can help SMEs internationalise and the EU should consider cross-border clusters.
On SME internationalisation itself, Ministers emphasised that EU measures should compliment but not duplicate member state measures.
Specifically, the EU could focus on: promoting entrepreneurship training; sharing best practice; ways of making SMEs aware of support networks that are available; Erasmus programmes focusing on key trade partners; FTAs and special provisions for SMEs; better framework conditions at the EU level (e.g. single market, reducing regulation); and simplified regimes for micro-enterprises.
The Commission should continue with its missions for growth as well as focus on clusters and encouraging larger companies to work with SMEs. It should also focus on markets that SMEs want to access and where this is particularly difficult for them.
Jane Peters, (deputy director, international knowledge and innovation unit, BIS), represented the UK on the research day, 2 May.
The lunchtime discussion focused on the recommendations put forward by the high-level group on innovation policy management which had been set up during the Polish presidency. There was general support from participating delegations for the overarching recommendation of the group that more was needed to optimise the functioning of the European innovation system through improved management and coherence of the range of policy initiatives. The UK welcomed the report and in particular the reference to making sure policy makers and regulators understand how to use science correctly in the development of regulation. We did not, however, advocate a single, centralised authority with responsibility for innovation policy across the EU.
The lunch was followed by a plenary in which three keynote speakers addressed the topic of “How to optimise the benefits of research investment for European jobs, growth and society”. Breakout groups then discussed aspects of this broad theme. The UK took part in the workshop looking at “Ensuring the global competitiveness of European industry, including through the development and deployment of KETS (key enabling technologies)”. The discussion was wide ranging. The UK relayed the results of research undertaken in the UK which showed that a key driver for industry to take part in EU programmes was the development of pan-European networks. A major disincentive included the bureaucracy associated with the programmes. Other topics discussed included the importance of providing industry with a work force with the right skills.