Sustainable and Digital Europe – EU SME Strategy

30 Apr 2020

Alongside the announcement by the European Commission of a new industrial strategy including the support to  the development of key enabling technologies that are strategically important for Europe’s industrial future, a specific EU SME Strategy for a sustainable and digital Europe was announced by Thierry Breton, European Commissioner for Internal Market, on 10 March 2020.

Considering that Europe’s 25 million small and medium enterprises (SMEs) are the backbone of the EU economy that bring innovative solutions to challenges like climate change, resource efficiency and social cohesion and help spread this innovation throughout Europe’s regions, this new strategy put forward actions based on the following three pillars:

  • Capacity-building and support for the transition to sustainability and digitalisation;

Competitive sustainability is Europe’s guiding principle for the future. Achieving a climate neutral, resource efficient and agile digital economy requires the full mobilisation of SMEs. This transition to a more economically, environmentally and socially sustainable Europe must go hand in hand with the transition to digitalisation. For this, tailor-made measures are a prerequisite to develop a thriving SME layer of economy as well as to give opportunities for growth to those SMEs that wish to scale up. EU-wide investment is needed in order to create the appropriate business and innovation infrastructure for SMEs.

  • Reducing regulatory burden and improving market access;

The single market is the go-to market for European SMEs. It accounts for 70% of the value of SME goods exports, and 80% of all exporting SMEs sell to other Member States14. Nevertheless, the number of SMEs exporting to other Member States could be much higher: for example, only 17% of all manufacturing sector SMEs export within the single market15. The Single Market Barriers Communication shows that those most affected by continuing barriers, are SMEs. Complying with regulations, standards, labels and administrative formalities affects SMEs more than bigger companies due to their limited financial and human resources. Tackling these barriers is a joint responsibility of the EU and Member States.

  • Improving access to financing.

Access to finance is essential for SMEs to finance the investment needs for the transition. However, at all stages of development, small businesses struggle more than large enterprises to get finance. Improving access to finance requires an approach that combines a conducive regulatory environment, sufficient and aligned EU and national funding as well as access to networks of companies and investors.

To bring results, the strategy must be driven jointly by EU-level actions and strong commitment by Member States. The active involvement of the SME community and companies themselves will be key. The Strategy will therefore be underpinned by a robust partnership for delivery between the EU and Member States, including regional and local authorities. Entrepreneurs should also seize the opportunity of EU investment programmes to make their business more digital and sustainable, as well as to grow in the single market and beyond.

To view the factsheet on unleashing the full potential of European SMEs, please click here.