EU must improve to match US - Griffiths

Small Business Minister Nigel Griffiths called on European countries to step up progress to match US levels of entrepreneurship.

He told an international small business conference it was vital that people from all backgrounds across Europe are encouraged to set up their own businesses. 1.7 million businesses have started up in the UK in the past six years.

Speaking at the 48th World Conference of the International Council for Small Business (ICSB) in Belfast, Mr Griffiths said the European Commission's Action Plan in response to the recent Green Paper on Entrepreneurship would be key to delivering growth.

He outlined several areas on which he believed the Action Plan should focus, including:

• greater flexibility to use state aid to promote enterprise in disadvantaged areas;
  
• stimulating venture capital in countries where it is at a low level, mirroring the growth of such provision in the US;
  
• an 'Enterprise Day' in all EU countries to promote entrepreneurship to young people and groups under-represented in business;
  
• earlier and wider consultation to ensure that SMEs have a bigger say in the development of policy; and,
  
• reducing the stigma of failure by giving business owners who've failed through no fault of their own a second chance - in the US, it's much more likely for a failed entrepreneur to start again.

Mr Griffiths said: "We need to boost our performance if we're to match the US experience, especially with ten new accession countries joining the EU.

"Access to finance is a key problem.

"In the UK, the Government has levered in £330 million to regional venture capital funds to increase the availability of small-scale finance to growing firms and providing early growth funding, providing capital of £50,000-£100,000 to growing businesses.

"We need greater flexibility to use state aid to address market failures where they happen. Some of the most deprived communities are in cities that have minimal structural fund or assisted area coverage. Member States should have the flexibility to target state aid more effectively towards disadvantaged groups in non-assisted areas.

"I am concerned that the DTI's Business Incubation Fund, to fund developers of incubation projects across the English regions, has been delayed at an EU level which is stifling growth here.

"Under-represented groups also need to be encouraged to start up. For example, in the US 50 per cent of new businesses are started by women. If women set up in business at the same rate as men in the UK then we would have another 100,000 start-ups a year.

"We cannot afford to lose such entrepreneurial talent. That's why in the UK we've just published a framework for women's enterprise - and why we're encouraging more young people to consider starting up."