Europe must match US rate for SME start up says government

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

Mr Griffiths told an international small business conference that it was "vital" that people from all backgrounds across Europe are encouraged to set up their own businesses.

However, under-represented groups also needed encouragement, he said, claiming that in the US, 50% of new businesses are started by women. If that figure were extrapolated into the context of the UK, Mr Griffiths claimed that there would be another 100,000 start-ups a year.

According to the government, 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), 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; and earlier and wider consultation to ensure that SMEs have a bigger say in the development of policy.

Mr Griffiths said: "We need to boost our performance if we're to match the US experience, especially with 10 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."

The European Commission's Green Paper was published in January 2003 and responses from Member States are due by the end of June.

The follow-up Action Plan will be presented to the Spring Summit in 2004.

(GMcG)