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Small Business Act

The Small Business Act (SBA) was adopted in June 2008 and was a milestone in the European policy for small and medium-sized enterprises. It recognises the central role of microenterprises and SMEs to the promotion of growth, innovation, social inclusion and employment in the European economy. 

The ‘Think Small First’ principle is at the core of the Small Business Act. It places SMEs at the forefront of policy-making and should ensure that new regulations don’t add to the burdens faced by businesses.

The European Commission is constantly monitoring the implementation of the Small Business Act and, when it deems it appropriate, puts forward proposals to review it. In 2011, the European Commission adopted a Review of the Small Business Act, which took stock of the progress and suggested possible actions to improve its application.

In spite of various policymakers’ statements, European laws are still far from a punctual application of the SBA principles. Given its non-binding character, without a genuine respect of its principles the Small Business Act will remain a mere demonstration of good will. 

The SBA has to be a strong inter-institutional agreement for a concrete application of the Think Small First principle at the European and national levels, with a real inclusion of SMEs and their representatives in the legislative processes.

Small Business Act's principles

The Small Business Act establishes a set of 10 principles to steer the drafting and implementation of policies to benefit SMEs both at EU and national level:

  1. Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded
  2. Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance 
  3. Design rules according to the “Think Small First” principle 
  4. Make public administrations responsive to SME’s needs 
  5. Adapt public policy tools to SME needs: facilitate SMEs’ participation in public procurement and better use State Aid possibilities for SMEs 
  6. Facilitate SMEs’ access to finance and develop a legal and business environment supportive to timely payments in commercial transactions 
  7. Help SMEs to benefit more from the opportunities offered by the Single Market 
  8. Promote the upgrading of skills in SMEs and all forms of innovation 
  9. Enable SMEs to turn environmental challenges into opportunities 
  10. Encourage and support SMEs to benefit from the growth of markets

Small Business Act governance structure

With the SBA Review, the Commission launched an annual SME Assembly to mobilise all relevant stakeholders in the implementation of the SBA. Member States and the European Commission also appointed an SME Envoy, an official representative in charge of coordinating SME issues across different administrations. Together with representatives of EU-level SME business organisations, the Network of SME Envoys makes up the SBA advisory group.


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