/ Interview with Markus Beyrer, Director-General of BusinessEurope
- 2017 remains as the year during which the Commission unveiled its European Pillar of Social Rights. How do you think SMEs can cope with the legislative part of the Pillar? What are BusinessEurope’s views on the work-life balance package?
Whilst the principles and rights which are part of the European Pillar of Social Rights are not directly enforceable, we are concerned that they may become a justification for more EU social legislation in the future. And with the proposal for a directive on work-life balance for parents and careers this is in fact already the case. This catalogue of additional leaves ignores the reality of SME life and business needs in general. Leave-related costs will increase significantly, in particular in many countries where the compensation of workers on leave is currently below the level proposed by the Commission, i.e. sick pay level. Employers will have to finance the major part of the increased compensation either directly or indirectly, i.e. through social security contributions. This will undermine their capacity to create jobs. However, we do not believe that the proposal will increase women’s employment participation. This would be more effectively encouraged by investing in the necessary care infrastructures across Europe. More generally, the EU should focus on making sure that existing social legislation can be applied by companies and therefore achieve its objective of protecting workers without creating unnecessary bureaucracy. This is important for all companies, but SMEs in particular, who may lack knowledge or resources to implement the rules.
- The European Commission just published its 2018 work programme, which includes new initiatives on a wide range of issues such as the digital single market, taxation in the digital economy, or a social fairness package among others. What should be the focus of the European Commission as far as SMEs are concerned in order to ensure that they remain the backbone of the EU economy?
The Commission should focus on reducing the volume and improve the quality of regulation applicable to SMEs always taking into account the proportionality of administrative burdens that new EU legislation would generate. Any action on EU level should aim at enhancing SMEs capacity to innovate, to access new markets and to reach the optimal business dimension which is needed to compete at global level. To ensure full consistency between SME-relevant EU initiatives, the current EU SME definition needs to be revised. The SME definition that is currently used by the Commission to allow SME access to Research & Development and innovation support mechanisms can have a negative impact on access by SMEs to venture capital and/or on growth prospects once venture capital has been obtained.
The revision of the SME definition planned by the Commission in 2018 should correct the relevant provisions in the definition. Furthermore, legislative proposals with a disproportionate impact on competitiveness, with no real added-value to the (digital) single market and growth should be avoided. Any framework must be robust enough to remain relevant in a rapidly changing digital landscape. Tech-neutrality and level playing fields must be upheld to avoid steering technological development.
- The unavoidable digitalisation of the economy is often seen as an opportunity for all economic sectors, although it raises some challenges. There is currently an important debate in Europe about how to regulate online platforms in order to ensure that they produce benefits for all actors of the economy. What are your views about it?
To "go-digital” is not an option but a necessity for Europe in order to remain globally competitive. We agree that grasping this 4th global industrial revolution has become an extensive challenge but it also presents great economic and social opportunities. No matter the size, origin or sector of the company, the opportunities on offer are huge. This is not just relevant for tech companies but all sectors. In fact, 75% of the value added by the digital economy comes from traditional industries. Many of them rely on platforms to help match their offers with demand. This is no new concept, buyers and sellers have been brought together through intermediaries since commerce began. Online intermediaries continue to enable traders (especially SMEs) to improve sourcing strategies and access to wider markets, enabling them to expand to an extent that is not possible without the use of an online intermediary. Therefore, potential legislation should be fully assessed, especially if it is to have cross-sectoral consequences, including the possible need to define at the national level how people working in platforms stand in relation with the existing definitions of work and self-employment. Due to the vast use of platforms by a variety of sectors, and the diversity of business models chosen by various platforms, it is difficult to address issues with a single action.