3633 Survey SMEs Glasgow City Council en by we9mj6AB


									                         SME-friendly Regions and Cities
                    Survey of EU local and regional authorities

Mr Witold Krochmal, Rapporteur for the forthcoming CoR opinion on Competitiveness of
Enterprises and small and medium-sized enterprises (2014-2020), invites you to provide your
initial feedback on the policies for supporting SMEs and increasing the "business friendliness"
of EU regions and cities.

Your contribution will feed into both Mr. Krochmal's draft opinion (final adoption on 9-10
October 2012) and the 3rd CoR Monitoring Report on Europe 2020, due to be published in
October 20121.


                                      BY 23 APRIL 2012
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  The questionnaire will be available on this website in all languages as of the last week of March.

1 This annual report gives an account of how Europe 2020 is implemented on the ground, and the extent to which it
  is implemented in partnership by all tiers of government, ahead of the next European Commission's Annual
  Growth Survey. The 2nd CoR Monitoring Report was adopted in December 2011:
                             CONTRIBUTOR INFORMATION2:
Name of sender:                       Robert Andrew
Contact details:                      231 George Street, Glasgow
(address, telephone, e-mail)          0141 287 7250 robert.andrew@drs.glasgow.gov.uk
On behalf of:
                                      Glasgow City Council
(name of local or regional authority)
Country:                              UK
Member of the EUROPE 2020
Monitoring Platform (formerly Lisbon  x Yes          No
Monitoring Platform) :

     1) Please summarise the current impact of the financial and economic crisis on enterprises in
     your area, especially SMEs.
     .........The financial and economic crisis since 2008 has undoubtedly had an impact on the Scottish
     economy, and on Glasgow SMEs in particular. Economic recovery is slow and risks to growth persist
     including weak demand, constrained access to finance which is inhibiting business investment,
     inflation, falling real household incomes, and slow economic recovery in many of our key trading
     partners. Although business surveys indicated a slowdown in economic activity in Scotland towards
     the end of 2011, the first 2 surveys of 2012 show private sector output picking up slightly in the new
     year. The Bank of Scotland PMI indicator has now reported 13 consecutive months of expansion in
     private sector output

     Economic indicators for Glasgow specifically have shown, however, that there is also improvement in
     the city economy.
     Economic Output.
     The most recent figure for Glasgow gross value added (published in December 2010) is £16.9 billion
     for 2008, which represents 16.3% of Scotland’s gross output. This has steadily increased over the last
     10 years (Source: Office for National Statistics).

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Unemployment figures for Scotland is currently 8.6% which is slightly higher than the UK rate of
8.4%. Scotland’s employment and inactivity rates remains better than for the UK as a whole. (Source
Scottish Government Stats)
For the city of Glasgow, however, total employment in 2010 stood at 408,400 which is a decrease in
the 2008 figure of 452,300. This -5.7% decline is behind Scottish trends of -3.1% and the national GB
average of -0.2%. This has also had an impact on the SME client base in Glasgow which Glasgow
City Council has been addressing with various job schemes and economic initiatives which will be
covered later in this paper.
SME Growth Rates.
Despite the global economic downturn the number of SMEs registered in Scotland has increased. As
of March 2011 the number of SMEs in Scotland was 305,540 a 3.3% increase since March 2010.
SMEs accounted for 99.3% of enterprises, 53.6% of employment and 36.5% of turnover. (Scottish
Government stats).
As of March 2011 the number of SMEs registered in Glasgow was 15,030 with a combined turnover
of over £10m. (Scottish Government stats).
In Glasgow new business birth rates have remained at approx. 1000 per year and a figure the council
wishes to improve upon through its business support to improve entrepreneurship in the city.

2) Have you taken any specific measures to help SMEs address the crisis since 2008?
YES √ NO 
If YES, please describe in brief.

3) To what extent do you believe that the crisis has forced your region/city to rethink the
regional policy making (process) on entrepreneurship and to apply the Small Business Act's
"Think Small First" principle? Please explain in brief.
The economic conditions have greatly intensified the need to be more aware of where we use our
resources. We have always been open to partnership working but have increased the geography of
these partnerships and would hope to take this to another level with more EU collaboration.
The main economic development support organisations in Glasgow including Glasgow City Council,
Business Gateway, Scottish Enterprise and the Chamber of Commerce all recognise the importance of
entrepreneurship and ‘Think Small First’ principle and work in partnership to offer integrated support
where businesses can access the right type of support at the right stage of their growth. The Joint
Economic Strategy for the city encompasses the ethos of nurturing entrepreneurs in the city of
Glasgow as well as supporting the Scottish Government’s Economic Development Strategy at a
national level. From start-up advice and support from the Princes Scottish Youth Business Trust
(PSYBT) which offers support and funding for young people aged 18 -25, Shell LiveWire, aimed at
business support for young entrepreneurs aged 16-30, Business Gateway which offers inclusive
support and advice to start-up companies including advice for women, black minority ethnic groups,
disabled entrepreneurs, and young people who may all have previously encountered barriers in the
process of setting up in business, to the city council and Scottish Enterprise who offer business
support and advice to grow new and existing companies in the city area.
The City Council is also working in partnership with Scottish Enterprise to offer support to
entrepreneurs in the creative industries sector which is a growing and important sector to the city.
Creative Clyde is a business hub based at the heart of the Clyde Waterfront and offers office space
and support to creative industries companies with the aim to deliver wealth and jobs for the Glasgow
and Scottish Economy. Similarly, support in partnership with other economic development agencies in
Glasgow is given to companies in the Digital Media Quarter at the Clyde waterfront to assist
companies in the digital media sector which is a growing sector in the Glasgow economy.
In addition, the council is embracing the ethos of nurturing entrepreneurship through its Digital
Enterprise Glasgow scheme which offers free office space and business support to young
entrepreneurs in partnership with the universities and colleges in Glasgow as well as Creative
In response to the economic crisis the council in partnership with the main economic development
providers in the city now organises an event entitled Business Week and offers a week full of business
support and advice to entrepreneurs in the city and helps hundreds of companies and entrepreneurs to
access seminars, workshops and networking events all with the aim of improving the business acumen
of the SME base in Glasgow. The next Business Week event will take place in October 2012
Lastly, the council is now co- chair of the EU Entrepreneurship working Group with the aim of
sharing best practice with our partners in Europe and offering the best possible support to Glasgow
entrepreneurs and businesses.

4) Please state which of the following objectives for SMEs are supported by your
local/regional authority. For each item selected, please state briefly what form this support
       a) improving access to new markets and fostering international growth (within and
          beyond the European Union)
       b) ensuring easier access to financing for SMEs
       c) helping address the regional skills mismatch
       d) promoting entrepreneurship as a career path
       e) improving internet access
       f) e-government services for SMEs
       g) facilitating innovative activity and marketing of its results
       h) others (please specify)
.........a) improving access to markets.
Glasgow City Council offers financial support to Glasgow SME companies to access new markets.
Since its inception in 2010 the council has supported SME companies through its Glasgow for
Business International scheme, to attend trade missions to the USA. India. Poland and Brazil. The
council works in partnership with the Scottish Council for Development and Industry (SCDI) and
Scottish Development International to offer access to international markets for our SME companies.
In addition, in order to offer support to wider markets the council will launch the Global Cities
Initiative in October 2012. Glasgow companies will be offered support and finance to forge trade links
with our 8 twin city partners and the city of Chicago with whom we have signed a Memorandum of
b) The Council offers loans to Glasgow SME companies assisting them to access finance which
remains a key barrier to business growth. We support businesses to be investment aware and school
them on financial management systems and debt recovery processes.
c) The council offers a range of capacity building support which we hope creates demand for new
jobs. The council provides businesses with employment incentives including graduate and local
unemployed people apprenticeship places. We support over 50’s to gain work placements and offer
extensive skills development programmes to support unemployed to become more employable.
d) The council offers entrepreneurship training and advice through the Business Gateway network, the
Princes Scottish Youth Business Trust and through Digital Enterprise Glasgow in partnership with the
universities and colleges in the area and Creative Scotland. We also target young entrepreneurs
through our Business Week events. We organise School enterprise competitions and where possible
get school and college students involved in Business events.
e) We offer training and grants through our Business Skills training budget, and encourage the take up
of e-commerce and internet usage through showcasing good business experiences.
f) The council procurement process supports e-government services to SMEs and offers free Public
Sector Procurement through the Supplier Development Programme.
g) The council supports innovative activity through delivering more awareness raising events in
particular our business week support new learning, new thinking and potential for businesses to
network and engage with each other..
h) The council offers access to major works and services associated with the 2014 Commonwealth
Games and private sector infrastructure works taking place in Glasgow through the 2014 Business

5) How SME friendly is your legislation (including your system of taxation)? What legal
changes could be introduced at European, national and/or subnational level to improve the
situation for businesses?
.........The 2012 budget made changes to the tax and VAT with the aim of boosting small businesses
these included the following changes:
       1. Reductions in corporation tax- corporation tax has been cut to 24% with the aim to reduce it
           to 22% by 2014.
    2. Reduction to VAT registration threshold- VAT registration threshold has been raised to
    3. Increased personal tax allowance.
    4. The National Loan Guarantee Scheme aims to allow small businesses access to cheaper
        finance. With previous credit availability having been tightened this will allow greater
        accessibility to finance.
    5. This is an area where many businesses and commentators believe that too much regulation
        exists and consequently reduction of business regulations may encourage more enterprise
6) In order to increase regional competitiveness, should you target specific economic
activities for support? If so, what are these economic activities?
.........Yes, we do target specific economic activities for support. The council in 2006 conducted a
survey of local companies to establish barriers to public sector procurement to accessing over £9
billion of public sector spend each year. The main barrier to entry to these business opportunities was
a lack of capacity in local SME companies to bid for public sector contracts. With this in mind, the
Council aimed to target this lack of capacity through a specific and unique training programme
entitled the Supplier Development Programme which is a partnership of 26 Scottish Local Authorities
and Scottish Government third sector companies who have established a free capacity building
programme to enhance the skills of their local SME companies to grow these companies through
access to growing business opportunities in the public sector both at home and overseas through
access to OJEU contracts and the UN. Closer to home local companies have been better equipped and
skilled at applying for contracts for the 2012 Olympic Games and the 2014 Commonwealth Games
which will take place in Glasgow in July 2014.

7) The European Council recently identified a series of urgent measures for supporting
growth, in particular SMEs. Among others, the following objectives were identified:
   a) Strengthening the Single Market
   b) Completing the Digital Single Market by 2015 (in particular: boosting confidence in
       online trade; providing better and cheaper broadband coverage)
   c) Reducing administrative and regulatory burdens
   d) Removing external trade barriers and ensuring better market access and investment
       conditions outside the EU
   e) Improving access to finance
   f) Delivering top-quality business support services
   g) Promoting entrepreneurship
   h) Promoting the development of an effective EU-wide venture capital regime
   i) Making more effective use of pre-commercial public procurement to support
       innovative and high-tech businesses.
To what extent could these actions improve the situation for SMEs in your region/city? Can
you suggest any other action?
These actions could improve the economic situation of Glasgow’s SME client base in the following
       a) We need businesses to be more aware of the opportunities available to them of working
          collaboratively or in bidding for EU contracts By strengthening the Single Market this will
          offer Glasgow SME companies wider access to markets and in turn lead to increased export
        sales, joint –ventures and technology transfers which will boost the Glasgow and Scottish
   b)   One of the main themes of the economic development strategy for Glasgow – A Step Change
        for Glasgow is increased connectivity which will improve e-commerce opportunities and
        capability of Glasgow companies to compete on a global scale. Glasgow city council,
        Glasgow Chamber of Commerce and New York based Intelligent Communities Forum signed
        the Memorandum of Understanding with the aim to capture world best practice in the
        exploitation of digital technology. The Think Digital event taking place in Glasgow in 2012
        will encourage new business ideas and to explore ways to keep on increasing the city’s digital
        infrastructure capability.
   c)   Reducing administrative and regulatory burdens will allow SME companies to utilise
        resources more effectively and redirect the finance involved in these activities to other areas
        of the company e.g. innovation and research and development.
   d)   Removing external trade barriers and better access to markets outside the EU will allow
        Glasgow SME companies the opportunity to explore trade potential in other markets and to
        make Scottish exports more competitive in a global market place. Opportunities to explore
        opportunities in the emerging markets will be more viable for SME companies.
   e)   Access to finance will offer a range of benefits to SME companies including the ability to
        finance research and development for their products and services and also invest in plant and
        machinery to make their products more competitive in the local, regional and international
   f)   The ability to access support at the various stages of company growth is essential to maintain
        a growing local economy and to help grow the SME client base.
   g)   Promoting entrepreneurship is essential to growing the local economy and working in
        partnership with all the relevant agencies from schools and colleges and private and public
        sector organisations will improve the Glasgow new business birth rate. New business
        formation is one of the key drivers of economic growth. A high business birth rate drives up
        levels of innovation, competitiveness and productivity. Business start-up specific education is
        essential to achieving this goal and Glasgow city Council is engaging with universities and
        other stakeholders to achieve this through Youth Enterprise Zones and Digital Enterprise
   h)   Access to investment in key industries for Glasgow companies will be key to growing the
        local economy particularly in digital media and renewable energies.
   i)   This will make the procurement process easier to access for SME companies and Glasgow
        City Council is addressing similar initiatives through its Supplier Development procurement
        training programme.

All of the points mentioned above will be achieved quicker and more effectively if all the major
stakeholders in Glasgow continue to work in partnership and adapt to the changing needs of our SME
base which includes access to investment, finance and training to achieve a sustainable economy.
    8) The COSME Programme for Competitiveness of Enterprises and SMEs will replace4 the
    current CIP (2007-2013) and will have a budget of EUR 2.5 billion from 2014 to 20205.
    Please comment on:
            a) the potential benefit of the COSME programme for your region
            b) the challenges relating to its implementation
            c) the action that the national, regional and local authorities in your country could take
            to make COSME a success story
            d) the role that the local partners of the Enterprise Europe Network or other business
            support providers could play with respect to COSME
    Glasgow City council currently embraces the major themes addressed in the COSME
    programme and works in partnership with our economic development partners in the city
    including Scottish Enterprise, the Chamber of Commerce. Business Gateway, The
    Universities and colleges in Glasgow, and Scottish Development International to offer a raft
    of advice and financial support to our SME companies. In addition we have established
    strategies with measured outcomes and monitoring strategies in place to ensure we constantly
    adapt and change our assistance to meet the needs of an ever changing economic climate. We
    do this in a fluid and transparent way and incorporate private as well as public sector
    expertise all with aim of growing Glasgow SME companies and the Glasgow economy.
    All our economic development strategies are available to clients and stakeholders alike and
    monitoring is carried out to ensure we strive to meet our targets.
    The main economic development strategies and goals to meet the challenges addressed in the
    COSME Programme themes of are encompassed in the following aims of COSME:
    strengthening competitiveness and sustainability of the union’s enterprises including tourism,
    encouraging an entrepreneurial culture and promoting creation and growth of SMEs
    especially amongst target groups improving access to finance for SMEs, and improving
    access to markets inside the union and globally are set out in our policy documents listed
        1. A Step Change for Glasgow: Glasgow’s Economic Development Strategy.
        2. Glasgow’s International Strategy.
        3. The Glasgow Economic Commission Reeport – established by the Glasgow Economic
            Partnership to address the local, regional and global economic crisis.
        4. Glasgow’s Tourism Strategy, working in partnership with Scottish Enterprise and
            Glasgow City Marketing Bureau and Visit Scotland.

  Compared to the CIP, COSME places a greater emphasis on overcoming the direct obstacles which SMEs face
  when setting up a business, accessing foreign markets or looking for business information and advice. The
  programme's five key actions are: (1) Access to finance for SMEs through dedicated financial instruments; (2)
  Enterprise Europe Network: a network of business service centres; (3) Entrepreneurship (supporting transnational
  networks and knowledge sharing); (4) Improving framework conditions for the competitiveness of enterprises
  and policy development; (5) Internationalisation of SMEs.
  More information at: http://ec.europa.eu/cip/cosme/
Glasgow City Council is currently tackling the goals set out in the COSME document through
partnership with all the major economic stakeholders in Glasgow and is willing to share our
knowledge and expertise with our partner nations which we will do so through our
involvement and role as co-chair of the EU Entrepreneurship Working Group.

9) Do you wish to share your experiences (please indicate: title of the project/policy action,
brief description, source of funding, if the action is carried out in partnership with other levels
of government, obtained results, website and any other element you deem useful) on the
above issues and/or add any further comments or suggestions? If so, please include your
comments here. Please send us any additional relevant reports/policy papers which you may
have available.

                                         Background information

 Although Europe 2020 remains the EU's long-term strategy of structural reforms for smart,
 sustainable and inclusive growth, the European Council set out a number of short term
 priorities in the first quarter of 2012 to help boost growth and jobs. One of these priorities is to
 ensure the business continuity of SMEs and to strengthen them in view of the key role they
 need to play if the European economy is to return to a path of growth and job creation. .

 To this end, the main action undertaken by the EU institutions include:
    Small Business Act 6 - a set of 10 principles which should guide the design and
       implementation of policies both at EU and national level. This is essential to create a
       level playing field for SMEs throughout the EU and improve the administrative and
       legal environment so as to allow these enterprises to unleash their full potential to create
       jobs and growth;
    Improving access to finance, delivering top-quality business support services and
       promoting entrepreneurship through the COSME Programme for Competitiveness of
       Enterprises and SMEs, which will have a budget of EUR 2.5 billion from 2014 to 2020
       and replace the current CIP (2007-2013). Compared to the CIP, COSME places a greater
       emphasis on overcoming the direct obstacles which SMEs face when setting up a
       business, accessing foreign markets or looking for business information and advice. The
       programme's five key actions are: (1) Access to finance for SMEs through dedicated
       financial instruments; (2) Enterprise Europe Network: a network of business service
       centres; (3) Entrepreneurship (supporting transnational networks and knowledge
       sharing); (4) Improving framework conditions for the competitiveness of enterprises and
       policy development; (5) Internationalisation of SMEs7.
    Promoting the development of an effective EU-wide venture capital regime, through
       an "EU passport" (to allow venture capital fund managers to grow and to market their
       funds across the EU using a single set of rules) and a "fund of funds" (to provide cross-
       border risk capital and a financing scheme to support innovative SMEs).
    Making more effective use of pre-commercial public procurement to support
       innovative and high tech businesses.
    Reducing administrative and regulatory burdens at EU and national level.
    The European Entrepreneurial Region (EER) award label, identifying and rewarding
       EU regions with outstanding entrepreneurial visions).

6 http://ec.europa.eu/enterprise/policies/sme/small-business-act/
  More information at: http://ec.europa.eu/cip/cosme/

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