EU ministers should stop “dithering” and urgently act to support entrepreneurs in the UK and on the Continent, the Federation of Small Business has declared.
Unveiling its blueprint for action for small firms in the European Union, the Federation said it believes that inactive politicians are causing entrepreneurial spirit to be lost across Europe.
Potentially a “downward economic spiral” could result, unless the EU turns to company directors as the master key for unlocking some of the problems the Continent faces.
Entrepreneurs, the FSB said, are now better educated than the general labour workforce and whether they run a micro, small or mid-sized business are defined as natural problem solvers.
Whether it is solving problems like skill shortages, excessive red tape, the cost of staff training or the lack of trust between policy makers and business, EU leaders should listen to the views of company owners more readily.
“Entrepreneurs are pro-active problem solvers. We hear far too much in the EU about problems,” said Tina Sommer, blueprint author and EU Affairs Chairman for the FSB.
“We are proposing solutions now. EU politicians would do well for their constituents by taking these suggestions on board. By listening to the view from thriving businesses it should be possible for a modern Europe to remove barriers to growth from the path of small firms, creating new jobs and economic growth across the EU.”
Among the group’s suggestions is a recommendation that employment law should be more flexible, to ensure companies can adjust to “seasonal fluctuations in demand and changes in the economic environment.”
Moreover, given the differing size of small businesses there should be no ‘one size fits all’ approach in terms of drafting employment law, as smaller firms have different hiring patterns to their larger counterparts.
There should however be a ‘one stop shop’ for owner-managers within the EU to access regulatory and advisory matters pertinent to their business.
Such a service should be underpinned by the commitment of the European Commission to circulate details about new laws and policies quicker to national governments, so the information can be passed downstream instantly to the small business community.
At the same time, ministers are urged to adhere to Article 137 (2b) of the Treaty of the European Union, which states Directives for social and workers’ protection, “shall avoid imposing administrative, financial and legal constraints in a way that would hold back the creation and development of SMEs”.
Small firms should be actively backed by the SBRI initiative – a scheme imported from the US and launched by the UK’s Small Business Service, to increase the success rate for small firms seeking contracts from government bodies.
As around one third of the Federation’s members run a business from their home, the EU and its policy makers should do more to support the “hidden engine” of many thriving rural communities.
“Very little research has been undertaken into their motivations, characteristics and specific requirements,” the FSB said of home-based businesses.
“We need to move on from viewing these enterprises as mere ‘lifestyle businesses’ and take them seriously in future policy considerations.”
Elsewhere, the FSB said “greater incentives and tax breaks” should be offered to small businesses and consumers if “we are to bring new eco-efficient technologies and practices to the market place,” to compete against international forces.
Tax and other financial incentives should be introduced before fines and penalties regimes, it added, because they are “a powerful signal” that promotes activity among consumers & enterprise alike.
Commercial activity among small firms could be boosted, the Federation hinted, in light of the finding that if half of the companies in Europe tomorrow hired one member of staff, 10 million new jobs would be created.
But the FSB warned, “Small businesses can create more jobs but only if they have access to skilled recruits and the appropriate training programmes. At the moment we are at risk of starving them of the human resources they need.
“Small firms can create more jobs and drive forward a knowledge-based economy but only if they have time and freedom to do so. Over-regulation robs them of both.”
A spokeswoman explained, “We have brought our message to Brussels with this blueprint for success and we will keep up the pressure from our new EU offices at the heart of European decision making.
“With our suggestions for positive action now in the hands of EU politicians and officials the time for action is here. EU decision makers must start acting upon our proposals for the benefit of the businesses and people of Europe.”
The Federation added it welcomed an initiative from the European Commission that will require senior EU officials to spend time working in a small business.
Jun 2, 2006
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