By Philip De Man (KUL):
Entrepreneurship starts at the local level. Finding the right mix of ingredients for reforming the entrepreneurial society can only succeed if we take into account the entrepreneurial ecosystem of the various regions across Europe. A successful European entrepreneurship policy should hence give priority to bottom-up approaches that stimulate the establishment, viability and smooth succession of the 23 million Small and Medium-Sized Enterprises (SMEs) that form the backbone of the European economy. Increasing the competitiveness of our SMEs is crucial for creating jobs and wealth, and, ultimately, inclusive and sustainable growth.
In line with this economic reality, the EU has been granted a supporting competence in terms of industrial policy, a key aim of which is to encourage an environment favourable to the development of SMEs, focusing on innovation as a means of encouraging competitiveness. The limited nature of the competence means that the EU cannot, nor should it, develop a centralized entrepreneurship policy. Rather, it should aim to stimulate specific projects and policies in EU Member States using regional development funds as main investment tools. When implementing this competence, a key element is subsidiarity: the EU can only adopt measures if they cannot be taken more effectively at the national, local or regional level.
Of course, boosting individual regions without taking into account the larger patchwork of the EU in which they fit would only increase regional isolation, undermining the idea of a Europe-wide competitive industry. A second crucial element of the EU’s approach to entrepreneurship is therefore the regional cohesion policy. Essentially, this cohesion policy is an investment policy that directly targets projects on the ground in order to reduce the social, economic and territorial differences between regions in Europe. In so doing, Europe-wide criteria are developed that push for the increased involvement of regional stakeholders in the financing of projects supporting SMEs through the structural funds of the EU. In recent years, these funds have become a key means of achieving the goals of smart, sustainable and inclusive growth by 2020.
With these aims in sight, the latest EU cohesion policy for the period 2014-2020 sets out to double the support of the European Regional Development Fund (ERDF) for SMEs from EUR 70 to 140 billion over 7 years. More importantly even than this increased financial reserve, the policy also places the stimulation of local entrepreneurial ecosystems front and center. As such, support under the ERDF is made dependent on EU Member States drawing up so-called smart specialisation strategies. These strategies require Member States to identify a set of assets and strengths that define the unique innovation capacity of their regions. The European regional funds will then aim to stimulate this capacity through investment in local projects. Through this process, the EU is incrementally crafting an entrepreneurship policy that is at the same time centrally managed and locally oriented.