European SME policy

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99.6 percent of all businesses in the EU are small and medium-sized (SMEs). They are the drivers of growth and employment in Europe.

Decisions on financial market regulation, environmental protection and research funding are made at the European level and have a direct impact on SMEs and family businesses. This makes it all the more important for Brussels to listen to the needs of industrial SMEs. In almost no other country does the industrial SME sector play as important a role as it does in Germany. That is why the BDI also regards itself as the voice of SME industry in Brussels. Together with our umbrella association BUSINESSEUROPE, the BDI is working on a European level to improve the environment for industrial family businesses and SMEs.

SME Definition

The European Commission defines businesses as SMEs that have a maximum of 249 employees, less than €50 million in annual sales or less than €43 million in total assets. The BDI believes that the Mittelstand cannot be defined in quantitative terms. Most industrial Mittelstand businesses are led by individuals who at least partly own and control the company. Their most important leadership objective is to hand the business over in good shape to the next generation, in other words, they pursue long-term strategies. However, the quantitative criteria of the definition above often exclude highly innovative and high-growth companies. The focus should rather be on the qualitative criteria of the German Mittelstand.

The BDI is therefore calling for an extensive review of the EU’s definition of SMEs so that the industrial Mittelstand, which contributes so much to growth and employment, is no longer excluded from European SME policy. In its own-initiative report on family businesses in Europe (September 2015), the European Parliament urged the European Commission and its member states to pay more heed to family businesses in their legislation and in policy-making processes. The BDI expressly welcomes this demand in view of the decisive contribution German and European family businesses make to growth and employment.

EU SME policy

At least since the European Commission’s Small Business Act was passed in 2008, the motto in Brussels has been “think small first”. The importance of SMEs has been clearly identified and expressed on the European level. Europe needs long-term and job-intensive growth in order to prevent crises over the long term. And it is particularly the industrial small and mid-size sector that generates more growth. The BDI believes that the “think small first” principle should be anchored even more firmly in European policymaking. Strengthening the competitiveness of SME businesses must remain an important and overarching priority of European policy now and in the future.