The EU’s Role In Digital Advancement For SMEs
In 2020, Margrethe Vestager, the Executive Vice-President of “A Europe Fit for the Digital Age” stated that “every citizen, every employee, and every business should have an equal opportunity to benefit from digitalisation.” This proclamation was made after the European Commission released the Communication “Shaping Europe’s Digital Future.” This document was adopted to address concerns about the protection of individual rights in the digital realm, the fast progress of artificial intelligence, and the necessity for an EU data strategy to handle the vast amount of data produced by businesses and public entities. As a result, the Commission launched a “Digital Strategy” in 2020, titled “Shaping Europe’s Digital Future,” to achieve EU digital sovereignty and establish standards in a variety of areas, including digital services, the digital market, artificial intelligence, the European industrial strategy, and more.
Over the past five years, the European Commission has broadened its strategy by setting several objectives that involve both the public and private sectors. In 2021, the Commission launched “Europe’s Digital Decade,” a sustainable blueprint for a digital society that seeks to empower citizens and businesses under the “2030 Digital Compass” policy program, which in turn supports the digital transformation of the EU economy and society. EU institutions have also taken into account small and medium-sized enterprises (SMEs). In 2019, 40% of companies utilized online marketplaces to sell their products, and 90% of the platforms operating in the EU were SMEs, as per Eurostat. As previously mentioned, the European Commission strategy launched in 2020 addressed multiple areas; consequently, the EU Parliament and the Council of the European Union enacted related regulations for each of these areas. Concerning SMEs, the EU ratified four several legislative instruments:
- The European Industrial Strategy (2020) seeks to promote SMEs’ involvement in the Single Market and to expedite industries’ green and digital transitions.
- The Digital Services Act (2022) seeks to enhance the transparency of online platforms’ internal processes.
- The Digital Markets Act (2022) seeks to grant businesses access to specific data held by gatekeepers.
- The European Data Act (2024) seeks to establish fair, practical, and clear rules for the access and use of data.
However, the most significant innovations for SMEs were introduced with the Commission Communication “An SME Strategy for a Sustainable and Digital Europe” adopted on March 10, 2020. The Strategy was initiated in the context of the European Green Deal, the Digital Decade, and other EU actions to accomplish a twin digital and green transition. Here, three primary pillars are addressed.
ENHANCING CAPACITY AND SUPPORTING THE SHIFT TOWARD SUSTAINABILITY AND DIGITALIZATION
This initiative is designed to equip SMEs with practical training and opportunities to reinforce their skills, including short-term courses on digital and emerging technologies such as AI, blockchain, and IoT. These activities are financed through the DIGITAL program. In addition, SMEs can benefit from a skilled workforce through the Digital Volunteers initiative (initiated in 2020). This project aims to boost the digital competencies of SME employees by providing mentorship from larger corporations.
EASING REGULATORY PRESSURE AND FACILITATING MARKET ACCESS
This pillar emphasizes the importance of facilitating cross-border business operations within the European Single Market and potentially extending it worldwide. It has become increasingly crucial for SMEs to expand their reach beyond their national borders. Furthermore, EU institutions commit to providing businesses with up-to-date information on accounting laws, tax regulations, and other prerequisites.
AMPLIFYING ACCESS TO FINANCE
Under the “Europe’s programme for small and medium-sized enterprises” (COSME) – a fund to economically support initiatives that help small businesses access new markets –, the EU will promote:
- Financing opportunities for SMEs bridging private and public financing schemes.
- Access to relevant and updated information on financing instruments.
In 2023, the European Commission introduced the SME Relief Package, aiming to promote a more favorable business environment across the Single Market. This initiative comprises a set of legislative and non-legislative measures. The main aspects of the SME Relief Package include:
- Tackling late payments by suggesting stricter maximum payment limits, automatic payment of accumulated interest and compensation fees, and enhanced enforcement measures to safeguard SMEs from defaulting payers.
- Implementing a Head Office Tax System intended to simplify tax compliance for SMEs operating across borders.
- Simplifying administrative procedures across the Single Market without unnecessary document submissions.
- Encouraging Member States to allocate funds to national compartments in the InvestEU’s SME window.
- Organizing training initiatives to promote workforce skill enhancement.
SOURCES
Shaping Europe’s digital future: Commission presents strategies for data and Artificial Intelligence.
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_273
Europe fit for the Digital Age: New online rules for businesses:
https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/digital-services-act/europe-fit-digital-age-new-online-rules-businesses_en
A Europe fit for the digital age. Empowering people with a new generation of technologies:
https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age_en
EU Digital Strategy:
https://eufordigital.eu/discover-eu/eu-digital-strategy/
Europe’s Digital Decade:
https://digital-strategy.ec.europa.eu/en/policies/europes-digital-decade#tab_4
2030 Digital Compass: the European way for the Digital Decade:
https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A52021DC0118
European Industrial Strategy:
Digital Services Act:
The Digital Market Act:
European Data Strategy:
An SME Strategy for a Sustainable and Digital Europe
Unleashing the Potential of Europe’s Small Businesses
https://single-market-economy.ec.europa.eu/news/unleashing-potential-europes-small-businesses-2023-09-28_en
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them 2022-1-CZ01-KA220-VET- 000086461
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