ASSESSMENT OF THE IMPLEMENTATION OF THE
SMALL BUSINESS ACT FOR EUROPE
Preliminary results
22 May 2013
Agenda
1. Background
2. Methodology and process
3. Overview of preliminary results
4. Key issues for discussion
2
BACKGROUND
3
Euromed-Charter/SBA Assessment
• Objective: To assess the level of implementation of key
principles for SME and entrepreneurship policy
– Framework based on the Small Business Act for Europe;
– Focus on policy design and implementation;
– Comparison across countries and time;
– Performance benchmarked against EU and OECD good practices
• Analytical tool: the SME Policy Index; already applied to:
– In the Western Balkans and Turkey (2007, 2009, 2012)
– In the Eastern Partnership countries (2012)
– In the Southern Mediterranean (MED countries) (2008, ongoing)
– In the ASEAN (ongoing)
WITH THE FINANCIAL
SUPPORT OF THE
EUROPEAN UNION
4
Euromed-Charter/SBA Partners
1. Regional Scope: ALG, EGY, LEB, MOR, ISR, JOR, PA,
TUN
2. International partner organisations: Assessment
and coordination by the European Commission, the European
Training Foundation and the OECD; in consultation with the EIB
3. Med partners:
a.
b.
c.
d.
National coordinators are the main contact point and
facilitator in each country;
Government agencies and bodies facilitate information and
perform self-assessments;
Private sector representative organisations provides substantial
input throughout the process
Local experts support assessment and collect data and
information;
WITH THE FINANCIAL
SUPPORT OF THE
EUROPEAN UNION
5
METHODOLOGY
6
The “assessment grid”
• The Index is built on a number of dimensions organised
according to the principles of the Small Business Act;
• Policy dimensions are subdivided into sub-dimensions
and those in turn include a number of analytical
indicators;
• Progress is assessed on the basis of a five-step policy
development path at the level of individual indicator;
WITH THE FINANCIAL
SUPPORT OF THE
EUROPEAN UNION
7
The SME Policy Index methodology
SBA Principles
Dimensions
Sub-dimensions
The policy dimensions of the 20122014 Policy Index
Dimensions
1) Education and training for
entrepreneurship
3)
4) Public administration responsive to SME
needs
5) Adapt public policy tools to SME needs
6) Access to finance
7) Encouraging SMEs to benefit from
opportunities provided by the European
single market
8) Promote skills upgrading and innovation
9) Promote green growth
10) Tapping into the opportunities of
growing markets
Sub-dimensions
“Think Small First” Principle
3) 1.
2) Bankruptcy and second chance
3) “Think Small First” principle
Indicators
Institutional framework for enterprise
policy
Better legislation
3) 2.
Subdimensions
3) 1.
Indicators
Institutional Framework
3)1.1.
Delegation of responsibility for
enterprise policy
Indicators
Level of reform
1 2 3 4 5
Delegation of responsibility for
enterprise policy
Co-ordination with other
ministries
Enterprise development
strategies
8
Evolution
• First Assessment in 2008, based on
the Euromed Charter for Enterprise
• Current (2013) assessment based on
the SBA for Europe
• Good level of comparability between
the two assessments, as the majority
of the indicators have remained
unchanged
WITH THE FINANCIAL
SUPPORT OF THE
EUROPEAN UNION
9
Time-frame
1. January-March: Launching of the assessment
process. Country team established, local advisors
selected
2. March- May: Country assessments conducted
3. 21 May to 18 June: Presentation of preliminary
country results at bilateral meetings
4. 25 June: Presentation Meeting of national
coordinators and review of results at regional level
5. Mid- October: Finalisation of the results
6. First quarter 2014: Publication and launch of the
regional report
WITH THE FINANCIAL
SUPPORT OF THE
EUROPEAN UNION
10
Objective
The objective of this meeting is to discuss
specific indicators and to compare the
evaluation of the country and the
independent assessment according to four
criteria:
• Scores that are very different from 2008
• Scores that vary between the country and the
independent assessment
• Low scores
• Scores where more information is required
WITH THE FINANCIAL
SUPPORT OF THE
EUROPEAN UNION
11
Israeli SBA assessment partners
• National Coordinator: Dr. Nir BenAharon, Ministry of Economy
• OECD advisors and key advisors: Dr. Dan
Kauffman and his team; ETF key advisors
• Process launched on 5 March 2013
12
OVERVIEW OF
PRELIMINARY RESULTS
13
Highlights of the SME sector in Israel
• Over 380.000 enterprise active, 99%
SMEs;
• Enterprise class structure similar to the
EU, but lower M-Es representation;
• Healthy churning rate, 50% survival rate
at the 4th year;
14
Preliminary overall performance
5.0
4.5
4.0
3.5
International
organisations
3.0
2.5
Country assessment
2.0
1.5
1.0
0.5
0.0
15
Key strengths and challenges
Strengths
Challenges
Principle 3:
Advanced institutional framework and
improved strategic approach
Principle 2:
Cumbersome and lengthy bankruptcy
procedures, second chance neglected
Principle 5:
Wide range of services to SMEs and good
accessibility
Principle 3:
Regulatory reform at an initial stage
RIA not yet fully introduced
Principle 6:
Flexible and diversified range of financial
products and services, including provision
of risk capital
Principle 4:
No proper One Stop Shop, no on line
registration
Principle 8:
State of art support to innovative and
technologically oriented companies,
particularly high tech start-ups
Principle 9:
Lack of instruments to support adoption of
environmental standards by SMEs
16
Areas for improvements highlighted in
the 2008 report
• Institutional framework: lack of strategy,
limited coordination and fragmented
implementation
• No systematic tackling of administrative
burden
17
Main policy improvements since 2008
• Institutional framework:
SME development strategy introduced,
implementation under way
Transformation of the SME Authority into
the Small Business Agency, with clear
mandate on policy coordination, advocacy
and programme implementation
18
Main policy improvements since 2008
• Regulatory simplification:
Work started on priority areas: business
licence requirements, expedited business
licence;
Amendment to the VAT Act
Steps to introduce systematic application
of RIA
19
ISSUES FOR DISCUSSION
20
Key challenges in SME policy
•
Israel has developed a well structured and
innovative SME policy framework;
•
We observed an increased convergence towards
the EU SBA framework, with Israel more
advanced than the EU in areas such as support to
innovative enterprises and access to finance for
high-tech and high growth enterprises;
•
Israel has still to catch-up on regulatory reform
and administrative simplification
21
Key challenges in SME policy
• Point of strength of the Israeli policy
framework:
 Intense dialogue with the private sector and
constructive public-private cooperation;
Government action can focus on areas where
its actions benefit most (i.e. promoting
entrepreneurship in marginalised
communities)
Extensive network system supporting
dynamic enterprises;
22
Key challenges in SME policy
• Downside risks:
 Two speed enterprise sector: high-tech
versus low tech, centre versus periphery,
export oriented enterprises versus
enterprises serving the domestic market.
Growing missing middle syndrome:
limited domestic market force company to
choose between going international or
staying small.
23
Principle 2: ensure that honest entrepreneurs
who have faced bankruptcy quickly get a
second chance
• Key issues:
– Bankruptcy procedures: low score for “cost (%
of the estate)”
– Second chance: low score for “Promoting
positive attitude towards giving entrepreneurs
a fresh start”
24
Principle 3: Design rules according to the “think
small first” principle
• Key issues:
– Low score for “Cost-benefit analysis of new
enterprise legislation and regulation” (RIA)
25
Principle 4: Streamlining public administration to
be responsive to SME needs
• Key issues:
– Low score for “Official cost of obtaining the company
registration certificate”, “Silence-is-consent” principle
and “On-line registration”
– One-stop-shop, not really in place? divergence
between the two assessments.
– Different current configuration of the
registration/notification/compliance process,
divergence between the two assessments.
26
Principle 5: Adapting public policy tools to SME
needs
• Key issues:
– Ensuring that payments are made on time –an issue that quite
often SMEs are complying on, mainly on payments of municipals
and public, non-governmental entities.
– Availability of information on business service providers, what is
provided by public or by private sector? divergence between the
two assessments.
– Business incubators: Hi-tech oriented incubators versus non-hitech incubators. divergence between the two assessments.
– Online information for enterprises: what is the status of the
AMBA portal? divergence between the two assessments.
27
Principle 6: Facilitate SMEs’ Access to Finance and
develop a legal and business environment supportive to
timely payments in commercial transactions
• Key issues:
– Micro-finance: Unclear how the Micro-finance sector looks like.
More information is needed on key players to determine the
score. divergence between the two assessments.
– Private equity: Strong bias towards high-technology start-ups
– Financial literacy: where we stand by today?
– General legal framework versus specific law: leasing, risk capital,
and capital market
28
Principle 7: Help SMEs to benefit more from the
opportunities offered by the single market
• Key issues:
– Low score for “Level of computerisation of
procedures for foreign trade”
– Low score for “ Virtual one-stop-shop to deal
with the formalities of foreign trade”
– Low score for “ Euro-Med inter-firm clusters
and partnerships”
– Low score for “ Euro-Med networks of
business support services”
– Enterprise Europe Network
29
Principle 8: Promote the upgrading of skills and
all forms of innovation
• Key issues:
– Budget provision for SME innovation–most
innovation funds are spent by the Chief Science Office
of the Ministry of Economy for technological
innovation. For these funds, there are almost no
distinctions between small and big companies
– Good performance of “Incubators serving innovative
start-ups which are linked to technology content”
– What about supporting non technological innovation?
30
Principle 9: Enable SMEs to turn environmental
changes into opportunities
• Key issues:
– Low score for: “Promoting the use of
environmental management systems and
standards”
31
Principle 10: Encourage and support SMEs to
benefit from growth markets
• Key issues:
– Export promotion strategy: divergence
between the two assessments
32