Economy and Growth

As the backbone of the European economy, small and medium sized (SMEs) firms have a crucial role to play in helping Europe recover from the economic recession and develop its competitiveness in a challenging global market. Not only do they make up almost 99% of all businesses, they also provide two out of three private sector jobs in the EU.

Europe will only meet its goal of 75% employment – as envisaged in the recently-launched 2020 strategy – if the Brussels institutions, member states and regions work together to tap into the innovative potential of SMEs.

AER broadly welcomes Europe’s 2020 strategy, the follow-up to the much-vaunted but highly criticised Lisbon agenda for growth and jobs, but is concerned that it fails to recognise the need for a bottom-up approach when it comes to implementation. Without the involvement of Europe’s regions, the strategy will fail in its bid to create a smarter, greener economy.

It is one of AER’s aims to support regions, which provide practical help and financial backing to recognise and foster innovation at a local level. With this in mind, AER launched its innovation award, which is now coming into its fifth year and aims to recognise the hard work of regional authorities in developing innovative projects. AER can also provide much-needed support for regions in developing schemes for budding entrepreneurs, and help to enhance cooperation between private organisations and public actors – who must work together at a local and regional level to promote employment opportunities.

As research shows, regions with greater competencies perform better economically than their more centralised counterparts.

Policymakers must recognise the clear link between economic growth, innovation and decentralisation and put regional governance at the heart of Europe’s economic future.