Amid the corona crisis, digital SMEs call on European Council for a 50% SME quota in EU’s digital innovation budget

Digital SMEs and 48 national associations have written an open letter to President Charles Michel and the European Council. The core demand: 50% of the new Multiannual Financial Framework’s budget for digital innovation must go to SMEs

Europe’s small and medium businesses, which make up 99% of all companies, are expected to be hit particularly hard by the COVID-19 crisis.

The situation is serious. European DIGITAL SME Alliance and 48 national associations of digital SMEs have written a letter to the European Council ahead of its summit in late March. In the letter, the SME representatives asked for a strongly elevated consideration for SMEs in the EU budget 2021-2027. 

Even before COVID-19 threatened Europe’s economic stability, digital SMEs were faced with serious challenges. ICT small and medium businesses have insufficient resources to invest in Research and Development. They also suffer from a severe lack of digitally skilled labour force, for which they also compete with big tech enterprises, who in turn pay only a fraction of the taxes SMEs pay. Despite these challenges, digital SMEs are the drivers of Europe’s digital transformation in all other sectors. 

The core demand of European SMEs is to receive 50% of the EU budget for digital innovation. This budget includes programs like Horizon Europe, Digital Europe, the Connecting Europe Facility and other funding instruments. Currently, SMEs receive around 20%, whereas large enterprises, universities and research organisations share the remaining 80%.  

Upon sending the letter to President Michel, DIGITAL SME President Dr Oliver Grün remarked, “SMEs are the force that will jumpstart Europe’s economy after the Coronavirus crisis. As 99% of all enterprises, SMEs should receive at least 50% of the allocated EU funds for digital innovation.” 

Read the full letter here