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Brussels, 13 July 2004

Small and medium-sized enterprises (SMEs) are the vast majority of businesses in Europe and can play a key role in boosting enlarged Europe’s competitiveness if they become more R&D-oriented and innovative. At an event in Estonia today the European Commission highlighted the opportunities for SMEs through the EU 6th Research Framework Programme (FP6 2002-2006), which can help Eastern European SMEs achieve their full potential. From the four-year €20 billion FP6 budget, €2.3 billion is given to SMEs allowing them to access funding, hands-on advice and guidance on accessing EU programmes and leverage research into successful innovation and commercial applications. EU and Estonian government representatives and chief executive officers from Czech, Estonian, Hungarian and Romanian SMEs spoke at the event.

“SMEs are the cornerstone of Europe’s economic competitiveness and key to creating a world-class knowledge-based economy by 2010,” European Research Commissioner Philippe Busquin said. “FP6 devotes €2.3 billion to SME-led research projects, to help promote innovation and turn bright ideas into profitable businesses. Enlargement means SMEs in Europe’s “Baltic tiger” countries cannot only benefit from more open borders and collaborative research efforts, but also contribute to the overall European Research Area.”

SMEs key to European competitiveness

SMEs account for 66% of European private sector employment and 50% of new jobs. Nearly half of Europe’s 2 million industrial SMEs have also introduced innovation into their markets. Through better access to research and development (R&D), corporate partners and field experts, via FP6, these businesses can grow faster and encourage more start-ups. FP6 is the largest instrument supporting SME research globally.

New Member States still to take up full benefits

EU enlargement is changing the way SMEs do business in Europe. The removal of barriers to the flow of goods, services, capital and labour provides new market opportunities is increasing competition and access. But SMEs in the EU’s new Member States are yet to take full advantage of this, with only 12.7% of applications to participate in FP6’ first calls coming from the new Member States. The European Commission invested €13 million last year to improve participation.

FP6 boosting SME competitiveness

The EC’s Integrated Projects, Specific Targeted Research Projects, SME-specific collective and co-operative research schemes offer excellent opportunities for SMEs. The co-operative research (former CRAFT) scheme allows SMEs from different countries, facing common problems, to outsource their research activities. Collective research helps to expand SMEs’ competitiveness and scientific knowledge base through SME associations and groupings. Co-operative and collective research schemes account for a €473 million budget. The Estonian high-tech company, Pioneer, which exports 70% of its rapid tooling technology products overseas, is only one example of how EU funding is helping Baltic SMEs to succeed internationally.

SME FP6 actions in figures

• After “topping up” with the entry of new member States, the total FP6 budget represents €20 billion (up from 17,6 billion)
• 15% of the total budget of Priority Thematic Areas (devoted to SMES) is now €1.865 billion (was: €1.692 billion)
• SME specific activities: €473 million (was: €430 million)
• FP6 now includes in total €2.338 billion for SME participation (was: € 2.122 billion)

Item source: Date: 13/07/2004