The Lisbon European Council of March 2000 set the European Union a new strategic objective for the coming years:to become the most competitive and dynamic knowledge-based economy in the world, capable of sustained economic growth with more and better jobs and greater social cohesion. It is considered that Europe’s competitiveness and economic progress is strong dependent on its small and medium-sized enterprises, which are the key-source for job creating as well as for searching for new business ideas and innovative solutions, its main driver for entrepreneurship. For this reason, the European Council endorsed the “think small first” principle as one way to progress towards the Lisbon objectives. The idea of the small business has captured the imagination of the public and politicians over past years. They agree in the point that to meet the challenge of new integrated Europe requires a better business environment within the Internal Market, including the lightest possible administrative and regulatory burdens for small businesses and a better access to finance resources as well as creating of simple and effective legislation. It also requires a revolution in attitudes to entrepreneurship and to risk-taking processes, which will allow viewing failure as a part of experience, as an “opportunity to learn” from mistakes. They also emphasise the fact that small enterprises are normally more sensitive to changes in the business environment than large firms. They are the first to suffer if weighed down with excessive bureaucracy and creating new administrative burdens. And they are the first to flourish from initiatives such as decrease in taxation rate and promotion. My essay aims to answer the question to what extent the EU’s main market integration initiatives address the needs of SME’s and what should be done on the way to developing strong, competitive SMEs which would use all benefits from the Single European Market. It is important to define what we mean by SMEs before proceeding to answer these questions. For the purpose of this essay, SMEs are defined as non-subsidiary, independent firms, which employ less than 250 employees. We have to take into account the fact that this number may vary across national statistical systems. [...]
Inhaltsverzeichnis (Table of Contents)
- Creating an entrepreneurial Europe: The activities of the European Union for small and medium-sized enterprises
- The role of SMEs for the European economy
- Reasons for failure of small businesses
- Effects of internalisation and globalisation processes on SMEs
- Influence of the Single Market on small businesses
- Effect of the Single Market programme on SMEs
- Macro-economical effect of the Single Market
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This essay examines the role of small and medium-sized enterprises (SMEs) in the European economy, focusing on the extent to which the EU's main market integration initiatives, such as the Single European Market and the European Monetary Union, address their needs.
- The importance of SMEs in the European economy, including their contribution to job creation, innovation, and growth
- The challenges faced by SMEs in a globalised and technology-driven environment, such as access to financing, managerial capabilities, and regulatory burdens
- The impact of the Single European Market on SMEs, both positive and negative, including increased competition, opportunities for expansion, and new challenges
- The effectiveness of the EU's market integration initiatives in addressing the needs of SMEs, and the potential for further development of policies to support their growth
- The key role of entrepreneurship and risk-taking in driving economic success, and the need for a supportive business environment
Zusammenfassung der Kapitel (Chapter Summaries)
- The first chapter establishes the importance of SMEs in the European economy and outlines the EU's goal of creating a competitive knowledge-based economy. The Lisbon objectives are discussed, emphasizing the "think small first" principle and the need to foster entrepreneurship and a supportive business environment.
- The second chapter delves into the contribution of SMEs to sustainable economic growth. It defines key metrics like GDP growth, employment rates, and competitiveness, highlighting the significant proportion of businesses and employment represented by SMEs in the EU. The chapter emphasizes the need for policies that support firm creation and expansion.
- The third chapter examines the reasons for the high failure rate of small businesses, particularly during the start-up phase. It identifies challenges such as lack of financing, technological limitations, managerial constraints, and regulatory burdens. The chapter emphasizes the impact of globalisation and technology on these challenges.
- The fourth chapter explores the effects of internalisation and globalisation processes on SMEs. It discusses the establishment of the Single European Market and its implications for SMEs, particularly the need to adapt to a changing environment and exploit new market opportunities.
- The fifth chapter focuses on the influence of the Single Market on small businesses. It examines both the positive aspects, such as increased opportunities for expansion, and the negative effects, such as heightened competition. The chapter discusses the impact of removing trade barriers, promoting price transparency, and increasing competition pressures.
- The sixth chapter delves into the effects of the Single Market programme on SMEs, highlighting the removal of technical barriers and the introduction of essential requirements. It examines the impact on stability and the need for quality improvements and financial and technical assistance. The chapter highlights the importance of adapting to increased quality and logistics demands.
- The seventh chapter discusses the macro-economic effects of the Single Market, specifically the impact of price transparency on SMEs. It explores how increased price transparency can both benefit and hinder small businesses, depending on their ability to adapt to changing market conditions.
Schlüsselwörter (Keywords)
The primary keywords and focus topics of this essay include SMEs, European Union, market integration, Single European Market, European Monetary Union, economic growth, entrepreneurship, competitiveness, job creation, innovation, regulation, globalization, and internalisation.
- Quote paper
- Dipl. Betriebswirtin Svetlana Shirobakina (Author), 2004, The role of small and medium-sized enterprises (SMEs) in Europe's economy, Munich, GRIN Verlag, https://www.grin.com/document/57861
