Contribution of The Netherlands Chamber of Commerce (KvK NL) to the European Commission s Consultation on the Entrepreneurship 2020 Action Plan

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Contribution of The Netherlands Chamber of Commerce (KvK NL) to the European Commission s Consultation on the Entrepreneurship 2020 Action Plan September 2012 Interest Representative Register ID number:
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Contribution of The Netherlands Chamber of Commerce (KvK NL) to the European Commission s Consultation on the Entrepreneurship 2020 Action Plan September 2012 Interest Representative Register ID number: The Netherlands Chamber of Commerce (Kamer van Koophandel Nederland) Koningskade AA Den Haag The Netherlands Introduction text by the European Commission Europe needs more entrepreneurs. More new businesses mean more jobs and more growth. More new businesses also mean a more competitive economy which will better enable European companies to compete internationally and reap the opportunities offered both inside and outside the single market. New companies represent the most important source of new jobs: they create 4.1 million new jobs every year. Without the jobs created by new firms, average net employment growth rate would be negative. 1 But filling the European vase of entrepreneurship is not just pouring more but also about preventing leakage: avoiding companies to disappear for lack of a new entrepreneur to take it over or lack of support during turbulent times. These elements are key to avoid loss of valuable entrepreneurial capital. Countries with a more entrepreneurial culture stand to reap the benefits of a deeper and wider job market. Europe lags behind the United States in terms of entrepreneurship: in Europe 45% of citizens prefer to be selfemployed, while in the USA this proportion is 55%. 2 This comparison is particularly relevant because the two economies are similar in size, wealth and development. The comparison is thus a pointed reminder that greater levels of entrepreneurship could be expected and attained in the EU. Crucially, since 2000, only one country of the EU15 has shown a positive trend in its attitudes towards entrepreneurship. In the rest the trend is either stable or, in most cases, negative. 3 This lack of entrepreneurial drive is not due to an overall dislike of European population towards entrepreneurship but to concrete structural, administrative and cultural reasons that put a brake on enterprise creation and that can be tackled. Fostering and promoting entrepreneurs, entrepreneurship and an entrepreneurial culture are thus a must for European, national, and regional policymakers to increase our ability to create jobs and prosperity. A European Entrepreneurship Action Plan is therefore needed to address areas where entrepreneurial potential can be unleashed and where key bottlenecks can be overcome and obstacles to entrepreneurial activities removed. Promoting growth and competitiveness and modernizing public administration to improve the business environment are priorities of Europe2020 and have been at the centre of the Commission Communications A Small Business Act for Europe of and Review of the Small Business Act for Europe of These two communications address the main issues affecting European SMEs throughout their complete life cycle. Although they address some of the outstanding barriers to entrepreneurship, they do not specifically focus on how to increase Europe's levels of entrepreneurship and company birth. This consultation seeks to identify possible measures which could usefully contribute to the goals of such an Action Plan. Progress in attaining the goals of this Action Plan will be measured through the recommendation and monitoring processes of the Annual Growth Survey and the Small Business Act and its Review. Consultation aimed at: public administrations and private sector organizations and individuals who support entrepreneurs in starting up businesses and in helping them face challenges, particularly during the first years of life of the business; individual entrepreneurs and businesses; other interested members of the public. Consultations to date: The outline of the Action Plan was introduced to the regular meeting of the National Contact Points in late May. A followup to this consultation was a detailed discussion held at the meeting of the SME Envoys in Malta on 15 June. The Action Plan has also been discussed in detail in a meeting with business stakeholders on 20 June dedicated exclusively to this subject. In addition, there is a reference to entrepreneurship in the draft document of the Industrial Policy Communication, for which public consultation has been ongoing for over a month. The proposals within the Action Plan are based in significant part on initiatives which we have observed from our constant communication with relevant ministries and SME/entrepreneur support organizations across the Member States. 1 Kauffman Foundation Business Dynamics Statistics Briefing: Jobs created from business startups in the United States 2 EU Commission Flash EB No 192. Entrepreneurship survey in the 25 Member States, US, Iceland and Norway The difference with China is even more telling: 71% of Chinese surveyed would rather have their own business. 3 Finland, where the preference for entrepreneurship raised from 27% in 2000 to 41% in Despite this Finland is still below the EU average (45%) in COM(2008) 394 final Think Small First. A Small Business Act for Europe. 5 COM(2011) 78 final Review of the Small Business Act for Europe. 1. Respondent's profile 1.1. Please describe yourself:* (compulsory) Business support organisation 1.7. Please indicate type of your organisation* (compulsory) Public Private Other 1.9. Where are you located? * (compulsory) NL Netherlands 1.11. If need be, may we contact you in regard to this questionnaire and consultation?* (compulsory) Yes No Please provide your contact details.* (compulsory) Roel van der Beek, Product Manager Entrepreneurship, T , Remco de Bruijn, European Affars Manager, T , The Netherlands Chamber of Commerce (Kamer van Koophandel Nederland) Koningskade AA Den Haag The Netherlands Do you agree to your name being published on the European Commission's website along with your contribution?* (compulsory) Yes No 2. Questionnaire In the remainder of this consultation please give us your views on a series of initiatives which could contribute to improving conditions for European entrepreneurs, framework conditions and support for success. These measures could be taken at European, national, or regional level. Please tell us how impactful and important each measure could be in your view using the ranking scale, where: 0= no opinion, 1= not very impactful/important, 2= moderately impactful/important, 3= very impactful/important Note KvK NL: Especially see our comments at the end of this document (2.28) 2.1. Framework Conditions Cutting red tape (reducing the number of administrative procedures, simplifying them, and avoiding duplication of tasks)* (compulsory) Abolish legalization and other administrative formalities when using public documents crossborder within the EU* (compulsory) One stop shop and relationship managers in business support organisations for businesses I that are starting out* (compulsory) One stop shop for taxation and financial reporting (including advice and guidance)* (compulsory) Speed up and simplification of licensing and other permit procedures* (compulsory) Tax and social contributions related to effective cash flow of business* (compulsory) Same social security protections available to entrepreneurs as to employees* (compulsory) Raising awareness of government administrations and their staff about entrepreneurial and SME challenges* (compulsory) Improve the quality and variety of business support advice for startups* (compulsory) 2.2. If you have comments on any of the above measures, please tell us here: (optional) It would be wise not to overfocus on the reduction on the time and cost to set up a limited liability company since most startups are setup in the form of a soleproprietorship (90%). Only 1% of startups sets up their company as a limited liability company (in the Netherlands, and surely this figure will almost be the same in other EU countries) 2.3. If there are other types of measures not mentioned above which you would consider 2.4. Facilitating transfers of business Improve legal, administrative and tax provisions for business transfers* (compulsory) Improve information and advice provision for business transfers* (compulsory) Develop, publicise, and improve platforms and marketplaces for successful business transfers* (compulsory) 2.5. If you have comments on any of the above measures, please tell us here: (optional) 2.6. If there are other types of measures not mentioned above which you would consider 2.7. Efficient bankruptcy procedures/second chances for honest bankruptcies Develop and expand programmes to mentor, train, advise, and support second starters* (compulsory) Put in place faster and more affordable procedures for winding up businesses and discharging bankruptcies* (compulsory) Awareness raising in business and finance community to remove stigma of failure* (compulsory) Specific financial instruments available for second starters* (compulsory) 2.8. If you have comments on any of the above measures, please tell us here: (optional) Focus in support (advice, negotiation assistance) should be to prevent SMEs from going bankrupt and support during insolvency and bankruptcy procedures such as financial counselling (to increase the possibility of a second chance). Specific programmes to train, mentor, advice second starters as well as specific financial instruments for second starters do not make much sense, since they are essentially startups dealing with the same processes as startups when they start again. They can use the support and financing that is available for startups If there are other types of measures not mentioned above which you would consider Improved access to finance (before its too late) and earlywarning assessment. 2.10. Supporting new entrepreneurs Increase and improve targeted business support services* (compulsory) Offer dedicated support for SMEs to benefit from digital entrepreneurship opportunities* (compulsory) Offer dedicated support for SMEs to go green * (compulsory) Improve implementation of the Digital Single Market* (compulsory) Offer tailormade assistance and advice for micromultinationals collaborating across distance, borders and markets* (compulsory) Offer dedicated support for SMEs to benefit from European trainees (from vocational, technical to bachelor,master or doctoral level)* (compulsory) Targeted training, finance, internationalisation support programmes for high growth potential SMEs* (compulsory) Offer support for new businesses to innovate* (compulsory) If you have comments on any of the above measures, please tell us here: (optional) If there are other types of measures not mentioned above which you would consider 2.13. Improving access to finance Reinforce loan guarantee and venture capital facilities* (compulsory) Improve financial advisory capacity of Enterprise Europe Network (EEN)* (compulsory) Single multilingual online portal on EU finance for SMEs* (compulsory) Single national portals on national sources of SME finance* (compulsory) Make tax environment more favourable to early stage financing* (compulsory) If you have comments on any of the above measures, please tell us here: (optional) If there are other types of measures not mentioned above which you would consider Entrepreneurial education and training for youth Create a European platform or hub for entrepreneurial learning to share best practice and develop common models for policy, implementation and measurement* (compulsory) Entrepreneurial behaviour, skills and mindsets to be embedded in national/regional curricula at all levels primary, secondary, vocational, higher education and nonformal education and training, alongside integration of workbased teaching and learning in all disciplines and curricula* (compulsory) All young people to have one entrepreneurial experience before leaving secondary school (either as a formal part of the curricula or as an extracurricular activity that is overseen by the school or a nonformal education body)* (compulsory) Develop a guiding framework to encourage and support the development of entrepreneurial education institutions (vocational and higher education)* (compulsory) Increase entrepreneurship education supported via EU education funding programmes* (compulsory) Increase entrepreneurial training in line with national job plans* (compulsory) If you have comments on any of the above measures, please tell us here: (optional) If there are other types of measures not mentioned above which you would consider Untapped entrepreneurial potential of women Continue/expand networks of women entrepreneurship ambassadors and mentors networks* (compulsory) Tailored entrepreneurial training for women* (compulsory) Create/foster female investors and networking among women entrepreneurs* (compulsory) Investment readiness training for women entrepreneurs* (compulsory) Same maternity rights for women entrepreneurs as for employees* (compulsory) Adequate child/dependent care facilities available* (compulsory) If you have comments on any of the above measures, please tell us here: (optional) EIM did research in the past to female entrepreneurship and this showed that Dutch female entrepreneurs are not very enthusiastic about activities exclusively aimed at women (with the exception of networks for meeting each other and exchanging experiences) If there are other types of measures not mentioned above which you would consider Seniors second careers and business experience Establish networks of volunteer seniors to counsel young inexperienced entrepreneurs* (compulsory) Tailored entrepreneurial training for seniors without previous business experience* (compulsory) Offer grants for unemployed seniors to become entrepreneurs* (compulsory) If you have comments on any of the above measures, please tell us here: (optional) Tailored entrepreneurial training for seniors does not seem to make much sense. They can use the existing trainings on the market, as for anyone without previous business experience If there are other types of measures not mentioned above which you would consider Specific support for migrant, minority or other specific groups of potential entrepreneurs Tailored support for other specific groups of potential entrepreneurs* (compulsory) If you have comments on any of the above measures, please tell us here: (optional) If there are other types of measures not mentioned above which you would consider If you have any further comments on aspects of encouraging greater entrepreneurship which are not elsewhere addressed in this consultation, please use this space: (optional) To speed up economic recovery and growth, it is important to give extra attention to support SMEs in these difficult times. However, to do this the Small Business Act (SBA) is and should remain the main comprehensive EU framework for SME policy. The SBA was put high on the political agenda, endorsed by the Member States and its consistent implementation was strengthened by a wellorganised reporting and governance structure. Because of this the SBA has gained political momentum, familiarity among policy makers and delivered results (although they vary by MS). Yet another new initiative, of which we have seen many come and go before the SBA, could jeopardise what has been achieved and creates confusion. This to the detriment of all players involved, in the first place the entrepreneurs. Therefore we urge this action plan to become part of the SBA, e.g. as an addendum, and included in its reporting cycle. Furthermore the draft Action Plan shows considerable duplication of initiatives already included in the SBA (and its review). Contrary to what is said in the introduction of this consultation, the SBA does specifically focus on how to increase Europe's levels of entrepreneurship and company birth. Duplication of SBA actions especially concerns the envisaged actions under the 1 st pillar (Improve the framework conditions for Entrepreneurs Activities) where a large majority of actions are duplications. Therefore the Netherlands Chamber of Commerce strongly advices to focus this action plan on topics and actions that are complementary, ie not yet included in the SBA at this moment and concentrate on a limited number of key actions (indicated here below). The headline of the consultation reads Europe needs more entrepreneurs 1. Notwithstanding the fact that this is also needed, in order to be complementary to what is already in the SBA, the focus of this action plan should be Europe needs better entrepreneurship. As mentioned in the action plan, 50% of businesses do not survive during their first five years with the corresponding loss in potential growth, capital and jobs. The economic crisis has only increased the chances of a premature end, sometimes by bankruptcy but more often by termination of the business. A large part of this is due to insufficient preparation or underdeveloped competences. The foundation for this preparation and competences should be grounded in entrepreneurship education, especially for the young. With this focus on better entrepreneurship, we would like to highlight the following proposals (some taken from Supporting Entrepreneurs and Young People the entrepreneurs of the future and some new): Urge that the key competence entrepreneurship is embedded in national (or regional) curricula for primary and secondary level education in all Member States. 1 Startups are important contributors to growth, jobs and innovation and force existing firms to adapt and innovate and remain competitive. In parallel to that ascertain that teachers receive training on entrepreneurship education and exposure to enterprise, both during their initial qualification process and subsequently during their teaching career. Integrate entrepreneurship education into vocational education and training (VET) given that both initial and continuous VET learners are a potentially significant source of both intrapreneurship (i.e. entrepreneurial/innovative behaviour within an existing business) and future entrepreneurs. Stimulate that all young people have gone at least once through an entrepreneurial experience before they leave secondary school. An entrepreneurial experience is a practical, handson experience like running a minicompany, being responsible for an innovative or entrepreneurial project for a company or for the local community through which young people can learn the relevant skills (responsibility, creativity, risk assessment and management, project management, negotiation, teamwork, staff management etc.). Promote the coaching of student entrepreneurs. By means of active support and guidance, it becomes more likely the student will continue the business after studying. Make available additional EU funding to stimulate entrepreneurship education, especially in vocational education and training and in schools. Box 1. Good practise in Entrepreneurship Education: Entrepreneurship Module Eligible for Certification The Entrepreneurship Module Eligible for Certification in the Netherlands gives upper secondary vocational education educational institutions the option to add entrepreneurship to existing vocational training courses. The module sets out the basis concerning what people should know and be able to do in order to start up their own business and how to ensure that that business survives during the first few crucial years and goes on to flourish. The Entrepreneurship Module consists of 7 work processes, elaborated in competences, knowledge and skills. Since the Entrepreneurship Module is embedded in the national qualification structure in upper secondary vocational education. At this moment 17 of 41 regional schools for secondary vocational education are participating in the pilot, with currently students taking the module. The goal is to prepare students for an entrepreneurial career annually as of school year The Centre of Expertise on Vocational Education
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