Building on SMEs: greater responsibility, greater freedom

Small business initiative

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The Federal Ministry of Economics and Technology has launched a new initiative to support small and medium-sized enterprises (SMEs) called "Building on SMEs: greater responsibility, greater freedom". The initiative targets seven priority areas that are crucial for the commercial success of small businesses:

• innovation
• skilled workers
• business start-ups and business succession
• market opportunities abroad
• financing
• raw materials, energy and materials efficiency
• reducing bureaucracy

In these fields, and in close dialogue with the SME sector, the Federal Government is improving the conditions for entrepreneurship, creating greater freedom and flexibility for SMEs, and providing additional stimuli for growth and jobs in Germany.

The Economics Ministry's SME policy places top priority on the following issues:

Innovation: Many small and medium-sized firms in Germany are prime innovators in their fields. Nevertheless, their size can put them at a disadvantage. The Economics Ministry has instituted measures to offset these disadvantages and to strengthen the research and innovation capacities of SMEs. For example, the Central Innovation Programme for SMEs (ZIM) boosts incentives to invest in research and development.

Skilled workers: Many German companies are having a hard time finding suitably trained workers in certain vocational fields. This skills shortage is causing substantial welfare losses. The government is taking measures to harness the full potential of the domestic workforce, to attract German talent working abroad back to Germany, and to encourage foreign specialists to come and work in Germany.

Business start-ups and business succession: To ensure the long-term dynamism of our SME sector, it is essential to nurture a strong entrepreneurial spirit. Although new business launches are gaining momentum in Germany, it is still the case that too few people in our country perceive self-employment as an opportunity. Working together with the private sector, the Economics Ministry has launched the "Gründerland Deutschland" initiative (Germany - a nation of entrepreneurs) to give new impetus to start-ups and entrepreneurship.

Market opportunities abroad: Many German SMEs - especially in the manufacturing sector - are active in the export business. Their presence on global markets provides an international showcase for the competitiveness of Germany's SME sector. Because exports are a key element of our SME sector's success, it is crucial to address the many factors that continue to impede merchandise exports and foreign direct investment. That's why the Economics Ministry and the Federal Government are taking action to reduce trade barriers, to tailor export credit and investment guarantee programmes to the needs of SMEs, and to pool the government's export promotion programmes. We want even more SMEs to take advantage of the opportunities that foreign markets offer.

Financing: More than anything, SMEs need loans and equity to finance day-to-day operations as well as business expansion. For this reason, the Federal Government places a high priority on ensuring a well-functioning credit industry. In addition, the Economics Ministry is continuing the ERP and KfW financing programmes while fine-tuning certain aspects to improve the conditions for start-ups and business successions.

Raw materials, energy and materials efficiency: It is becoming increasingly important to use raw materials, energy and materials efficiently. The Economics Ministry is supporting SMEs with information services and specific incentives to secure the availability of raw materials and to further improve energy and materials efficiency. We will place a priority on ensuring that statutory regulations to promote greater energy and materials efficiency are designed in a way that does not generate excessive economic burdens for SMEs.

Bureaucracy reduction: Small and medium-sized businesses benefit greatly from deregulation and reductions in administrative costs. For SMEs, administrative costs account for a much greater share of overall costs than in larger companies. For this reason, the Economics Ministry will undertake a critical assessment of statutory regulations and standards and is taking steps to ease the burden on SMEs.