Lisbon Strategy: What’s in it for Crafts and SMEs ? Gerhard Huemer UEAPME Director Economic and Fiscal Policy 4 th SME Summit Portorož, April 23, 2005

What is the Lisbon Agenda? n Spring Summit 2005 agreed on new priorities => economic growth and job creation n three pillars to support these priorities: => more attractive for investment and work => knowledge and innovation for growth => create more and better jobs n less priority will be given to: => the social agenda => the sustainability / environment issues SME&LISBONSME&LISBON

Main strategy behind Lisbon  higher welfare needs higher productivity realisation of an internal market for goods and services improve the quality of regulation open and competitive markets increase the capacity for innovation well functioning labour markets better education and skills reform of the social welfare systems SME&LISBONSME&LISBON

What does Lisbon mean for Crafts and SMEs in the EU? n increasing competitive environment, which provides new markets and new competitors => within the enlarged EU => outside the EU n constantly improving competitiveness => higher productivity and added value => more flexibility and quicker adaptations => more innovation => better qualified entrepreneurs and employees SME&LISBONSME&LISBON

What do Crafts and SMEs need to cope with these challenges? n fair competition n better regulation and simplification n more flexible labour markets n better public services n more flexible competition and state aid rules n better business support services and measures => access to finance => access to know how => SME-friendly training services SME&LISBONSME&LISBON

Are these needs covered by the Lisbon Agenda? n The Lisbon Agenda covers most of the needs of Crafts and SMEs => UEAPME supports the Lisbon Agenda n The main problem of the whole Lisbon Strategy is the deficit regarding implementation by national governments: => increase the pressure for implementation => create partnerships for reforms n Criticism mainly focuses on unfair competition SME&LISBONSME&LISBON

Does Lisbon lead to unfair competition? n Criticism on unfair competition comes from different angles:  new vs old Member States  traditional Crafts versus new SMEs / self-employed  EU vs emerging markets (Asia)  shadow economy and undeclared work  differing cost of regulation in the same markets SME&LISBONSME&LISBON

What’s behind these fears? n difficulties to cope with comparative advantages => different wages => social and environmental costs n differences regarding administrative burdens n difficulties to adapt quick enough to new competitive environments: => access to finance and technologies => qualification deficits SME&LISBONSME&LISBON

Possible answers to be discussed n protective measures:  market barriers – country of destination principle  limitations to the freedom of establishment  limitations to the freedom of movement  transitional periods  European minimum standards  managed trade in state of free trade n supportive measures – the Lisbon Agenda:  better regulation  business support services SME&LISBONSME&LISBON