EUROPEAN COMMISSION

Brussels, 8.11.2021

COM(2021) 685 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

COSME





2014-2020 Programme for the Competitiveness of Enterprises and SMEs










2018 Monitoring Report

Table of Contents

1.    Introduction    

2.    Activities and results 2018    

2.1 Objective A: Access to finance    

2.2    Objective B: Access to markets    

2.3    Objective C: Improving framework conditions and competitiveness    

2.4    Objective D: Promoting entrepreneurship and entrepreneurial culture    

3.    Support measures and administrative expenditure    

4.    Contribution to the climate mainstreaming objective    

5.    Conclusion    

6.    Annex    

1.Introduction 

COSME is an EU programme to improve the competitiveness of enterprises, especially small and medium-sized enterprises (SMEs). It builds on the 2007-2013 entrepreneurship and innovation programme (EIP) established under the competitiveness and innovation framework programme. It seeks to optimise links with other EU spending programmes, in particular the European Structural and Investment Fund and Horizon 2020, which includes the innovation activities that were previously part of the EIP.

COSME adds value by addressing transnational issues and market failures in four key areas:

1.Improving access to finance for SMEs in the form of equity and debt (at least 60% of the total budget);

2.Improving access to markets inside and outside the EU (21.5%);

3.Improving framework conditions and competitiveness for businesses, including SMEs (11%);

4.Promoting entrepreneurship (2.5%).

In addition to the 28 1 EU Member States, the following countries participated in COSME in 2018: Iceland, Albania, Bosnia & Herzegovina, Kosovo*, Montenegro, North Macedonia, Serbia, Turkey, Armenia, Moldova and Ukraine.

The Commission is responsible for the overall implementation of COSME. The first objective is implemented through the financial instruments entrusted to the European Investment Fund (EIF). Actions under Objectives 2, 3 and 4 are mainly delegated to the European Innovation Council and SME Executive Agency (EISMEA) (formerly ‘EASME’). Indirect management by international organisations is also envisaged for certain analytical and benchmarking activities.

This report gives an overview of the COSME budget implementation in 2018, as required by the regulation. Given the multiannual nature of many projects, the decision was taken to delay the publication in order to allow the inclusion of comprehensive results and data in the report. The report includes support measures, administrative expenses and the activities of projects launched in both 2017 and 2018 as indicated in the relevant project fiches 2 .

2.Activities and results 2018

The overall planned budget for COSME in 2014-2020 (7 years) is EUR 2.3 billion including administrative costs. The financial commitments are planned to increase progressively up to 2020 (the programme’s final year). An annual work programme with accompanying support measures is agreed each year.

The COSME budget is implemented through four budget lines with appropriations specified by the corresponding revised financing decision for 2018 3  and the financing decision for support measures 4 . After adding contributions from third countries, unused appropriations from the previous programming period and miscellaneous transfers, the budget available for 2018 was:

(a) budget line 02 01 04 01 for administrative expenditure: EUR 4 441 204

(b) budget line 02 01 06 01 for the functioning of the EASME agency: EUR 9 914 421

(c) budget line 02 02 01 for all other operational expenditure: EUR 143 007 469

(d) budget line 02 02 02 for access to finance operational expenditure: EUR 277 117 505

The financing decision for support measures 5 provides for a contribution of EUR 8 538 223, included in the budget line 02 02 01 of the EU’s general budget for 2017.

On average, 81% of COSME’s activities under the operational budget (exception: access to finance) were delegated to EASME 6 .

In total, 97% of the EUR 434 million euros available were committed. For payments, the implementation rate was on average 82%.

2.1 Objective A: Access to finance 7

The COSME Regulation specifies that at least 60% of the total budget (EUR 1.4 billion) should be allocated to the financial instruments for 2014-2020.

In 2018, access to finance represented 64% of COSME’s financial envelope.

EUR 277 million was available for the financial instruments and accompanying actions, including EFTA and third countries’ participation.

EUR 220 million was committed for the Loan Guarantee Facility (LGF) and EUR 28 million for the Equity Facility for Growth (EFG).

In 2017, EUR 0.9 million was committed for accompanying actions, including a survey on SMEs’ access to finance (EUR 570 272,46), information to SMEs about access to EU financing (EUR 149 607.50) and workshops on the Banking Union and Capital Markets Union (EUR 15 000).

Equity Facility for Growth (EFG) 

Number of operations: 7 signed by EIF (3 in 2017, 4 in 2018), mostly to establish growth and expansion funds, but also including multi-stage funds, reaching a total of 15 operations at the end of 2018 (10 for growth and expansion stage funds, 4 for multi-stage funds operating with the InnovFin Equity Facility for Early Stage set up under Horizon 2020).

Total expected amount of investments for eligible final recipients: over EUR 771 million (by the end of 2018, 38 eligible final recipients in 12 countries had received EUR 289 704 756). During this period, the EFG also contributed to the pan-European Venture Capital (VC) fund-of-funds programme (VentureEU) that was launched to tackle bottlenecks in the field of VC financing in EU. The main recipient was Axon Partners Group.

Textbox 1. Highlight of the EFG project – BCB Medical: data-life-wisdom (Turku, Finland)

Loan Guarantee Facility (this information covers 2017 and 2018) 

By the end of 2018, 117 guarantee agreements had been signed with 93 financial intermediaries (23 new agreements signed in 2017, 24 in 2018) in 28 countries (24 EU and 4 third countries) for a total of EUR 1.2 billion, and the LGF had already provided around EUR 22.8 billion to 414 739 SMEs in 27 countries. For the 117 operations signed by the end of 2018, more than EUR 36 billion is expected to be made available to SMEs.

Textbox 2. Highlight of the LGF project - Opus Online (Tallinn, Estonia)

Accompanying actions (this information covers 2017 and 2018)

The SAFE survey  gathers information on the financial situation, financing needs, access to financing and expectations of SMEs. The results are published online and can be used by Member States, analysts, academia and others. A total of 17 532 firms across 34 countries were surveyed in 2017 and 17 848 firms across 36 countries in 2018.

The Commission also continued to update and promote the  Acces2Finance website that provides information to SMEs on how to access financing from 10 different EU programmes in 42 countries. It also helped SMEs look for EU financial support for clean tech and climate, in line with COSME’s climate change objectives. The number of webpage views stood at 640 000 in 2017 and 631 000 in 2018.

Finally, the workshop on the Banking Union and Capital Markets Union held in 2018 was deemed a success. It was attended by more than 20 experts who helped formulate a list of recommendations.

2.2Objective B: Access to markets

The COSME Regulation specifies that 21.5% of the total budget should be devoted to easing access to markets.

In 2018, EUR 75 million was dedicated to the internationalisation of SMEs.

Enterprise Europe Network (EEN) (this information covers 2017 and 2018)

Objective: provide integrated business support services to companies who seek to innovate, grow and explore opportunities in the single market and third countries

Results:

·Network partnering services helped SME clients from all network countries form over 5 700 international partnership agreements with foreign companies

·Network advisory support services helped around 4 000 clients improve their competitiveness and innovation at European level

·Services provided to over 200 000 SMEs per year

·Digital services reached 16.8 million SMEs

·Improved quality, efficiency and relevance of services for European SMEs

Next steps: Cement progress made so far; prepare for next phase under the post-2021 framework.

Textbox 3. EEN success story – SiMAX

Other activities (this information covers 2017 and 2018)

Over 400 SMEs have already benefited from services related to IP pre-diagnostics and improving access to patent protection for innovative EU SMEs through the IPA4SME project. One such service is free IP pre-diagnostics with a verified IP expert who provides a customised report on IP business strategy and recommendations on how to efficiently and securely exploit the assets. This is available to SMEs registered in Austria, Denmark, France, Germany, Greece, Ireland, Italy, Latvia, Netherlands, Spain and Sweden. Around 90% of the SMEs that benefited from this service said that the IP pre-diagnostic report is a useful resource for defining and implementing their IP protection and valorisation strategy, and more than 90% said they would recommend the service to other innovative SMEs.

To support the creation of an innovation-friendly business environment and the overall competitiveness of the European economy, the InnoBroker project developed an Innovation Procurement Broker (IPB) business model that facilitates the procurement of innovative goods and services by bringing together contracting authorities, suppliers of innovation (with a special focus on SMEs and start-ups), investors, and researchers. The IPB business model and the main findings from the pilots were presented online on 30 July 2020. The recording is available at:

è www.innobrokers.eu and

è https://innovation-procurement.org/innobrokers/ .

Intellectual property helpdesks (this information covers 2017 and 2018)

Intellectual Property (IP) is vital for the international competitiveness of EU businesses. Intellectual Property Rights (IPR)-intensive industries account for most of the EU trade with the rest of the world and generate a trade surplus for the EU economy. The international IP SME helpdesks achieved the action’s goals by running a very successful IP helpline (answering 3 202 questions), developing and updating a wide range of business-friendly IP publications, running a successful training programme with the help of Chambers of Commerce and other business intermediators, and providing IP support to EU SMEs for company field trips and trade fairs.

EU-Japan Centre for Industrial Cooperation

This Centre was set up to encourage industrial, trade and investment cooperation between the EU and Japan and to help guide and implement EU economic diplomacy with Japan. The action aims to improve market access, competitiveness and entrepreneurship for European SMEs. In 2018-2019, it organised 17 seminars in Japan and the EU, 34 technology support webinars, 21 support missions, and 2 EU-Japan business roundtables. It produced recommendations and reports on business opportunities for EU SMEs in the Japanese economy. It also ran a 12-month traineeship in Japan attended by 60 European students. The Centre has over 35 000 companies registered in its database.

The Commission funds the Centre’s activities through a new grant agreement, which runs from 1 April 2020 to 31 March 2022.

Public procurement of innovation

As the public sector can play a major role in helping companies - particularly SMEs - find customers for their innovative products and services, the co-financed projects should significantly increase the proportion of European SMEs that have access to the EU’s Public Procurement of Innovation (PPI). They should also help raise awareness about the advantages of procuring innovation for a constantly increasing greater number of public buyers. The two ongoing grant agreements started on 16 January 2020 and will last 40 and 42 months respectively.

2.3Objective C: Improving framework conditions and competitiveness

The COSME Regulation specifies that 11% of the total budget should be devoted to improving framework conditions and competitiveness.

In 2018, EUR 33 million was allocated to this objective.

SME performance review

This is one of the Commission’s main tools to monitor and assess countries' annual progress in implementing the Small Business Act (SBA). In line with the measures set out in the SBA action plan, the review gathers comprehensive information about the performance of SMEs in EU countries and other partner countries. It consists of a general report and country fact sheets with up-to-date information on SMEs’ resource efficiency and green products. The outcomes of this action are made available online on DG GROW portal here .

Clusters

Developing more world-class clusters in Europe would help improve the competitiveness, sustainability and resource efficiency of enterprises, notably SMEs. The European cluster collaboration programme aims to intensify cluster collaboration across regions and sectors and facilitate SMEs’ access to clusters and internationalisation activities by creating a hub that includes a discussion forum, a collaboration platform, matchmaking events, capacity building webinars, policy events, information on good practices and policies, etc.

The programme also aims to improve collaboration, networking and learning between cluster organisations and their members to make the specialised and customised business support services provided or channelled to SMEs more professional. This will help strengthen ties between regions and sectors to enable sustainable, inter-regional partnerships and strategic collaboration in specialised areas linked to industrial modernisation and improving the business environment.

Light Industry Innovation and Technology Project (ELIIT)

The ELIIT project helps create successful partnerships between SMEs from textile, clothing, leather and footwear (TCLF) industries and providers and owners of novel technologies. The goal is to promote the use of technology-ready solutions to improve productivity, value chain integration, resources efficiency and to create new high added-value niche-market products and services. It comprises a platform and website with an active community (204 SMEs from 28 countries and 180 tech providers from 24 countries are registered). It has helped support 15 partnership projects by providing financial support and tailored advice, and the success of these partnerships has exceeded expectations.

Artificial intelligence: critical industrial applications

This project aims to identify an optimal mix of industrial policy measures (business, financial, investment, etc.) to enable the development and uptake of – and ultimately the financial benefits by European SMEs, of AI applications. It reached more relevant stakeholders than expected, for example by increasing the number of participants at the final conference (held in Brussels on 18-19 February 2020) from 100 to 190 (with more than 300 registrations) with no impact on the budget. Three project reports are available here:

→  Market analysis, critical AI applications and rollout  

→  Foresight scenarios  

→  Policy measures and recommendations  

Tourism

The call for proposals to support thematic tourism and exploit the links between tourism and cultural and creative industries has resulted in seven projects being co-financed. These projects have faced challenges related to the COVID-19 crisis, which has invariably led to changes and deviations. The executive agency is in constant touch with the project partners and has facilitated adjustments (where realistic and viable). The coordinators will submit the final reports at the end of the co-financing period.

Textbox 6. Highlights of the projects on tourism products

2.4Objective D: Promoting entrepreneurship and entrepreneurial culture

The COSME Regulation specifies that 2.5% of the total budget should be devoted to promoting entrepreneurship and entrepreneurial culture.

In 2018, EUR 12 million was allocated to this objective.

Social innovation networks for social entrepreneurship

This project looked at the role of social networks in promoting social entrepreneurship and helped social entrepreneurs access funding. It was slightly modified in line with the priorities of the new Commission and due to the COVID-19 crisis, to better address the social economy aspects of the recovery. The project resulted in: 12 draft papers from recognised international social economy scholars; input into the social economy action plan be adopted by the Commission in the second half of 2021; a large virtual network of academic scholars, social entrepreneurs, venture capitalists, policymakers, and practitioners across Europe; and the social economy scientific conference (24-25 November 2020) linked to the European Social Economy Summit.

The Commission also supports social considerations in public procurement through the action on Collecting Good Practices and Raising Awareness on Socially Responsible Public Procurement and the project on Promoting Social Considerations into Public Procurement Procedures for Social Economy Enterprises. A pdf with 22 good practice examples from 12 EU countries can be downloaded here: Buying for social impact - Good practice from around the EU .

Erasmus for young entrepreneurs

This scheme allows a potential or newly established entrepreneur to collaborate with an experienced entrepreneur in another COSME participating country. In 2017-2018, 32 projects took place (through 10 specific grant agreements and two calls for proposals), through which between 1000 and 1500 novice entrepreneurs were matched with more experienced ones. The exchanges were deemed a success by more than 90% of participants. See success stories and testimonials at  www.erasmus-entrepreneurs.eu .

3.Support measures and administrative expenditure

COSME support measures are financed under budget line 02.0201. In 2018, EUR 7 million was allocated to support measures.

Conferences and meetings were organised with stakeholders to discuss the challenges facing different industrial sectors. For Phase II of the project on Substitution of chemical substances of potential concern, recommendations fed into the ‘SME strategy for a sustainable and digital Europe’ (10 March 2020) and the analysis for ‘Safe and sustainable-by-design in chemicals strategy for sustainability’ (14 October 2020).

The Integration and Competitiveness Report 2018 was another key support measure. It analysed drivers and obstacles to competitiveness and integration in the single market, focusing on the business environment for SMEs, and reviewed Member States’ microeconomic performance. It provided input for several European Semester background documents, available here . The related background studies are published here .

The WEGate Platform for Women Entrepreneurship  is another notable action. It aims to revamp the WeGate e-platform to help facilitate networking and the sharing good practices among women entrepreneurs. The community comprises 1814 members from 43 countries. Most of them work in the services and ICT sectors, but there are also some from the production sector (e.g. textile and food processing). Five inspirational stories about the work of female entrepreneurs during the COVID-19 crisis are currently available on the platform. 

Administrative expenditure represented 3% of the budget in 2018. It covered studies, expert meetings, and information and communication actions, as well as the Commission’s (DG GROW’s) expenses (amounting to EUR 4 million) linked to IT networks and other technical and administrative assistance. The budget for the functioning of EASME amounted to EUR 9.9 million.

4.Contribution to the climate mainstreaming objective

The COSME programme’s contribution to the climate mainstreaming objective, set for all Commission programmes, has been estimated at EUR 23.8 million representing 5 % of the financial allocation in 2018.

For several COSME actions, such as the Loan Guarantee Facility, it is difficult to track the contribution to climate mainstreaming without imposing an additional administrative burden on financial intermediaries and the participating SMEs who are the final recipients. However, the Enterprise Europe Network (EEN) – while not having any formal climate-related deliverables, actively helps SMEs become more sustainable. Expert groups focusing on sustainable construction, intelligent energy, environment and the circular economy include more than 200 EEN staff members and many EEN achievements (e.g. partnership agreements and advisory service outcomes) relate to these subjects. The budget for these activities is estimated at around EUR 14.5 million.

In the 2018-2019 SME Performance Review, Member State factsheets include regularly updated indicators on the link between SMEs, resource efficiency and green products. Also, for the Regional Cooperation Networks for Industrial Renaissance and Modernisation (RECONFIRM) project, it is estimated that up to 40% of the action helped achieve climate change objectives, because the collaboration also focused on green technologies and on regional strategies linked with the Commission’s Green Deal strategy.

The action on Substitution of chemical substances of potential Concern (Phase II) was also 100% dedicated to climate mainstreaming.

5.Conclusion

A full 97% of the programme’s operational budget, supporting access to finance, access to markets, a favourable environment for businesses, competitiveness, and entrepreneurship was executed. Monitoring ensured that the budget was reallocated to the most successful and oversubscribed activities, such as reserve list projects, and in particular to the financial instruments.

Access to finance was a key action area in 2018. Under the Loan Guarantee Facility (LGF), 24 new agreements were signed in 2018 (and 23 in 2017), for a total of EUR 1.2 billion. The financial intermediaries were located in 28 countries. 414 739 SMEs in 27 countries received around EUR 22.8 billion in financing. More than EUR 36 billion is expected to be made available to SMEs. The market demand for COSME LGF guarantees and counter guarantees continues to rise and its 2019 budget is expected to increase, partly by reallocating the COSME EFG budget and partly by increasing the EFSI top-up. Agreements for the EFG take longer to sign, as equity entails more complex due diligence and fundraising processes. At the end of 2018 the EIF had invested in 14 funds through the Facility for a total of EUR 163.5 million 8 .

Enterprise Europe Network (EEN) played an essential role in 2017-2018, supporting over 220 000 SMEs per year with intensive, high added-value services and reaching 16.8 million SMEs through its digital service offer. In 2018, the network facilitated around 75 000 business cooperation meetings between small businesses, resulting in 2 611 international partnership agreements. Its support services helped 1 796 SMEs improve their competitiveness and innovation. EEN scale-up advisers were put in place, in line with the Commission’s initiative 9 , helping scale-ups in 56 EU regions overcome barriers to growth. The EEN built on the good results made under the first 2 years of COSME support, and further improved the quality, efficiency and relevance of its services for European SMEs 10 .

The framework conditions for EU SMEs were enhanced by several cluster actions. Thanks to the ‘Cluster Go’ initiative, 25 EU cluster partnerships were established in 2018, supporting SMEs across Europe. This initiative encourages participating clusters and small companies to access global value chains and find strategic partners beyond Europe.

The European cluster collaboration platform 11  has brought together more than 930 organisations and reached out to about 100 000 small businesses. It took part in over 1 100 international matchmaking meetings between 48 clusters in 2018, becoming a key EU instrument in supporting the internationalisation of SMEs.

Textile, clothing, leather and footwear (TCLF) SMEs were also supported through the ELIIT project, and another project was launched to create favourable conditions for the development and uptake of AI applications by European SMEs.

In 2018, Erasmus for Young Entrepreneurs reached 7 000 exchanges between new and experienced entrepreneurs across Europe since the start of the programme. A two-year pilot project also began in April 2018 to trial the scheme in new destinations outside Europe.

The COSME programme is on track to reach its objectives by the end of 2020, and its actions continue to be relevant for fostering economic growth and creating employment opportunities, while being aligned to the evolving needs of SMEs.

6.Annex

		Commitments				Payments
		all fund sources				all fund sources
Budget Line		Initial budget	Budget implemented	Execution		Credits available for payments	Payment executed	Execution
				%				%
02 02 02	Access to finance	277 107 505	275 981 370	99.6%		198 306 271	160 618 512	81%
	delegated to other DGs (IT support)	10 000	10 000	100%		9 127	9 127	100%
	total	277 117 505	275 991 370	99.6%		198 315 398	160 627 639	81%
02 02 01	Access to markets, business environment & entrepreneurship
	implemented by GROW	23 437 457	16 000 219	68%		20 592 358	11 592 266	56%
	delegated to EASME	116 192 675	116 078 182	100%		64 731 306	64 474 334	100%
	delegated to other DGs	3 377 337	2 846 549	84%		2 668 790	1 302 596	49%
	of which carry over to 2019	60 586 298	59 252 550	98%
	total	143 007 469	133 591 202	93%		87 992 453	77 369 196	88%
02 01 04 01	Administrative budget	4 441 204	2 991 875	67%		4 441 204	403 273	9%
02 01 06 01	EASME - administrative (operating) budget	9 914 421	9 500 072	96%		9 914 421	9 500 072	96%
	Total budget	434 480 599	422 074 520	97%		300 663 475	247 900 181	82%

(1)

EU-27 + UK, with UK being part of the European Union at the time of the project execution.

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.

(2)

  Programming, monitoring and evaluation | Internal Market, Industry, Entrepreneurship and SMEs (europa.eu)

(3)

C(2018)6983 DocsRoom - European Commission (europa.eu)  

(4)

C(2018)578 DocsRoom - European Commission (europa.eu)

(5)

C(2016) 60 final.

(6)

SEC(2013) 493 final.

(7)

The same projects are repeated from the 2017 monitoring report due to combined reporting for 2017 and 2018.

(8)

  http://www.eif.europa.eu/what_we_do/equity/single_eu_equity_instrument/innovfin-equity/index.htm

(9)

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Europe’s next leaders: the start-up and scale-up initiative, COM(2016) 733 final, 22.11.2016 - https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2016%3A733%3AFIN

(10)

89% of surveyed SMEs think that the support will help improve their market situation, nearly half that it will help their competitiveness, and nearly 60% that it will help them preserve or create jobs.

(11)

  European Cluster Partnerships | European Cluster Collaboration Platform