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Our thanks to the Federation of Small Businesses for the following Pressrelease.
Finnish EU Presidency must focus on innovation and R&D says the FSB, the UK's largest business organisation.
The Federation of Small Businesses, the UK's largest business organisation, called on the incoming Finnish Presidency of the EU to step up efforts to boost innovation and research and development (R&D) in Europe's economy by putting small business at the centre of this effort.
The EU set itself the target of spending 3% of GDP on R&D by 2010, but last year it totalled only 1.9%. In Japan spending topped 3.15%. The FSB believes that the EU's level of R&D spending is as dismal as it is alarming and that action is needed now to kick start higher levels of investment in R&D.
Tina Sommer, FSB EU Affairs Chairman, said:
"Finland should use this period of political inertia in certain EU countries to ensure that Europe has the best possible programme for promoting innovation, research and development.
What is needed now is the rapid adoption of a programme placing an emphasis on the pivotal role small businesses play as the generators of innovation. Today in the UK 64% of commercial innovations come from SME's and across the EU half of all new jobs are already created by less than 5 percent of high-tech small and medium sized enterprises.
EU decision makers need to recognize how Europe's economy is evolving and they need to put the money on tomorrow's winners rather than yesterday's hopes."
The FSB is proposing four steps to achieve higher levels of EU innovation:
1. Approve the 7th Framework Programme on time:
The 7th Framework Programme (FP) is the European Union's main instrument for funding research and development. The FP is proposed by the European Commission and adopted by Council and the European Parliament. It is due to be adopted by Council on 24th July, but could be delayed if there is no agreement. The Council should come to an agreement on FP7 during the extraordinary Competitiveness Council planned for 24th July. Failure to do this would prevent the programme from starting on time.
2. Place small businesses at the centre of FP7 funding:
The FSB welcomes amendments to FP7 adopted by the European Parliament to ensure SME's obtain greater access to funding. The FSB is concerned that these measures should not be watered down by Council.
3. Introduce measures to apply and capitalise on ICT:
Whilst productivity growth has accelerated in the US in sectors using ICT, in the EU productivity has yet to benefit from the boost ICT can provide. The FSB is worried that relatively few SME's are maximising the potential of ICT. FP7 must recognise the potential productivity gains in this area.
4. Recognise the pivotal role small businesses could play in meeting the EU's 3% target:
In the United States the average small business has an R&D budget 7-8 times higher than in the European Union. Closing this gap on its own would take the EU close to its target of achieving 3% spending for R&D. The European Commission's own advisory board has made this point, but this has not been recognized in the EU's funding programmes to date.
Points to note from the FSB
1. FPs have been implemented since 1984 and cover a period of five years with the last year of one FP and the first year of the following FP overlapping. The current FP is FP6, which will be running up to the end of 2006.
2. The FSB is Britain's biggest business organisation with 195,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.
3. The FSB's national survey "Lifting the Barriers to Growth 2006", the largest survey of its kind in the UK, revealed the following statistics on innovation, research and development among SME's:
- 58.7% of businesses seek to grow by investing in new equipment, machinery or IT.
- 25% of businesses seek growth through expanding their range of products and services.
- 20% of businesses consider R&D innovation to be a competitive strength.
- 64% of businesses consider their specialised expertise or products a competitive strength
- 34% of businesses consider their design and creativity to be strengths.
- 65% of businesses do not know about the UK's R&D tax credit
Contacts:
FSB Chief Spokesman
Stephen Alambritis: 07788 422 155
FSB Senior Adviser EU and International Affairs
Andrew Cave: 07917 162779
FSB Press Office
Matthew Knowles: 020 7592 8113 / 07917 628991
Simon Briault: 020 7592 8128 / 07917 628998
