Commission{BUDG}Committee on Budgets</Commission
OUTCOME OF THE HEARING ON
Erasmus for Young EntrepreneursThursday, 11 July 2013
9h00 - 11h00
Room: JAN 6Q2
European Parliament
Brussels
Rapporteur: Paul Rübig
- EXECUTIVE SUMMARY
The Committee held a hearing on Erasmus for Young Entrepreneurs (EYE) with MEP Paul Rübig as Rapporteur. Started as a pilot project, EYE will be part of the COSME programme as of 2014, as outlined by the ITRE Rapporteur Jürgen Creutzmann. Mr Christian Weinberger from the European Commission (DG ENTR) presented how EYE works in practice. BUDG then heard testimonies of persons involved as entrepreneurs (Ms Mikaela Bandini and Mr Rimvydas Butkus) or as support organisations (Mr Arnaldo Abruzzini from Eurochambres and Ms Anne-Maria Mäkelä, Project Manager at the Seinajoki University of Applied Sciences). A Q&A session with Members followed.
- PRESENTATIONS
MEP Paul Rübig (EPP), Rapporteur for this hearing, introduced the session by recallingthe rationale for the creation of Erasmus for Young Entrepreneurs (EYE), which was established as of 2008 with strong support from the EP.
- Erasmus for Young Entrepreneurs: achievements and ongoing developments
ITRE Rapporteur MEP Jürgen Creutzmann(ALDE)presented the COSME programme on which a compromise has recently been found and for which over 2 billion Euros are set aside for 2014-2020. COSME will fund Erasmus for Young Entrepreneurs in the future as part of the "mobility programmes" explicitly mentioned in the text.Against the background of a high rate of young unemployed, he called on the EP to fully use its budgetary powersin order to make sure that the Erasmus for Young Entrepreneurs scheme is implemented every year.
Mr Christian Weinberger, Senior Advisor for Entrepreneurship & SME Policy at the European Commission (DG ENTR)recalled the strategic objectives of EYE: making youth start a business successfully; bringing internationalisation and innovation to existing businesses; overall, increasing competitiveness of SMEs and creating new jobs. He outlined how it works in practice: "new entrepreneurs" (NE) apply to the scheme; an intermediary organisation (IO) checks the application and helps searching for a host entrepreneur (HE) abroad; a contract is agreed upon; eventually, the new entrepreneur stays between 1 to 6 months in the host entrepreneur's company. The Commission ensures the overall coordination, policy development and financial management.
Mr Weinberger went on presenting facts and figures about EYE in the past years, notably showing a steady increase of NE-HE relationships (1400 completed and 280 in execution). EYE has now reached cruising speed, with around 50 registrations per week on average (both HEs and NEs). Given the limits set by the budget available to it, an annual target of 500 to 700 exchanges per year can be achieved, with a final goal of 10 000 exchanges in total in 2020. He noted a strong interest for the UK, mostly due to language, followed by Germany. A wide variety of sectors are represented but the services sector is the most attractive one.
In qualitative terms, he underlined the positive feedbacks received from the entrepreneurs and the positive initial evaluation report carried out in 2011. He however pointed to a big variance of efficiency of IOs doing the matching and acknowledged that critical mass requirements are not yet attained in certain respects. More synergies between IOs, skills development and a Code of conduct will be considered.
A major future development will be the externalisation of the management to the Executive Agency for Competitiveness and Innovation (EACI). Nevertheless, the EU-wide support office will be maintained and EYE will not be merged with the Enterprise Europe Network (EEN). An EYE 2020 task force will be set up and should deliver a report by mid-2014.
- The added value of Erasmus for Young Entrepreneurs on the ground: views from the entrepreneurs
Ms Mikaela Bandinipresented her experience as host entrepreneur. She said she was initially hesitant to engage in EYE because she did not see an immediate benefit for her company. However, she started one year and a half ago and hosted three young entrepreneurs from the Netherlands, Hungary and Sweden.
Ms Bandini mentioned a few success factors linked to her own activity. Based in Matera, Italy, she noted that the low cost of living made it possible for the new entrepreneurs to cover their costs during their stay with the EYE allocation (around 800 EUR a month). The fact that it is a small town provided an opportunity to integrate easily in its social life. Being a small company (3 persons in the office, plus 12-20 outsourced staff on each project), NEs were able to be closely involved.
Her company deals with several marketing projects such as Viaggi di architettura, an online travel company for architects, as well as Can't forget Italy and Milan Expo Tours. Two NEs worked on the two latter projects. One of them concluded a contract with the company after his stay, while the other one learned - inter alia - how to build up and position a new website successfully.
On a more critical note, she underlined that a one-month stay (as it happened once in her case) is definitely too short. She regretted that professional travels are not properly insured by the EYE scheme itself.
Her assessment of EYE is that it is a win-win situationgiventhat young entrepreneurs coming from the outside were able to see things that established co-workers didn't see, to help find defaults and improve, and to convey their know-how. This is particularly useful in niche marketslike in the travel business. Based on the EYE experience, Ms Bandini will open next month a new digital co-working space to host EYE exchanges but also exchange students from all over the world.
Mr Rimvydas Butkus leads a bike courier company in Klaipeda (Lithuania) and took part in the EYE programme in 2009 after hearing about it in a conference. He found that getting in touch with the right persons was a challenge - especially because it was the beginning of EYE - and he multiplied the contacts with intermediary organisations and potential host entrepreneurs before finally concluding an agreement for a stay in another bicycle courier company in Graz, Austria. A success factor was the goodwill and like-mindedness of the host entrepreneur, since having a new entrepreneur on board was both a help and a burden for him.
EYE provided Mr Butkus with an opportunity to familiarise with the provision of bicycle courier services that he had discovered in 2001 in Hamburg, Germany. Thanks to the financial support provided by EYE, he was able to look at a business model from the inside, without "reinventing the wheel", and he got inspiration and motivation for developing his own business. Afterwards, his company was able to expand its services and he is now considering expanding to other towns.
As for the host entrepreneur, EYE enabled him to look at his company from a new angle. A new entrepreneur can provide some help, give his or her advice and exchange business ideas. Mr Butkus maintained contacts with his host entrepreneur afterwards.
Mr Butkus said he considered it necessary to promoteEYE by presenting it in schools, universities and labour agencies. He also recommended developing closer contacts between entrepreneurs and local coordinators.
A recent TV news report broadcasted by Euronews about his experience as new entrepreneur was shown during the hearing.
- Making it work: views from the support network
Mr Arnaldo Abruzzini, Secretary General of Eurochambres, said his organisation had contributed to EYE ever since its inception, both as EU-wide coordination office and through those individual Chambers of Commerce members of Eurochambres who have acted as intermediary organisations.
He described the development of EYE in several main phases, from its engineering (building on on Erasmus students' mobility programme) to a quantitative phase (recruiting potential candidates and host entrepreneurs and building up a network of IOs throughout Europe) through to today's qualitativephase,where it is about not only increasing the number of exchanges but also improving the quality of the network, of the procedures, of the applicants and of the exchanges themselves.
While confirming the very positive feedbacks received, he said EYE could improve if it achieved a critical mass of exchanges, by increasing its budget and/or by increasing its efficiency. Its inclusion in COSME is already a step forward but would allow, according to him,a maximum of 1500 exchanges per year - Eurochambres considers that more exchanges should be carried out. One could therefore work on the cost efficiency side: spending an average of 8.000 to 10.000 EUR is a lot given that roughly 50% of it relates to promotional, organisational and administrative costs. Procedures for the management of EYE could therefore be simplified.
Further recommendations would be: to ensure a better connection with Enterprise Europe Network operators on the ground; to increasethe number of IOs (especially in certain countries) to ensure a tighter geographical coverage; to develop the EYE brand (it is misleading to talk about "young" entrepreneurs only). Finally, given that giving people a chance to create their own business is also a way to alleviate youth unemployment, resources should be found outside the COSME programme (e.g. in national budgets) in order to develop comparable schemes in the Member States.
Ms Anne-Maria Mäkelä, Project Manager in charge of Erasmus for Young Entrepreneurs at the SeinäjokiUniversity of Applied Sciences (Finland) described her region of origin as well as her university as a "cradle of entrepreneurs" in Finland, making EYE a very relevant project in this context. Her organisation is the lead IO in the European partnership "TourEurope". Her IO focuses on tourism-related SMEs, a sector which needs to develop its management practices and to bring an international perspective and outsiders' views in its operations.
EYE is for her a fantastic programme with very concrete objectives which bring tangible benefits for entrepreneurs.She mentioned a couple of success stories where one new entrepreneur is now the representative of his host company in China while another one expanded his business to Spain after his stay in this country. She noted that there were various categories of entrepreneurs: self-initiators who know exactly what they want; motivated entrepreneurs but needing support in their action-planning; and entrepreneurs who expect everything to be provided to them. IOs target their work on the two first categories.
In a quick survey carried out before the hearing among her counterparts in other IOs, Ms Mäkelä found that the biggest challenges for project managers like her is to attract the host entrepreneurs and to evaluate the impact of the exchanges. Problems raised by the IOs are among others technical or learning problems with the common IT tool (now being improved) and the budgetary constraints which lead IOs to explain that no more exchanges can be supported once the envelope under the ongoing cycle is used up.
On the basis of her experience with EYE, she recommends to intensify collaboration between IOs at country level, notably in terms of promotional activity, as well as collaboration with other entrepreneurs' organisations (EEN, chambers of commerce). She would also wish to be able to transfer money from one IO to another within the same European Partnership and to take past performance into account so that best-performing IOs can support more exchanges. She also underlined the possibly misleading EYE name which seems to target "young" entrepreneurs only. She finally spoke in support of a geographical expansion of EYE-like schemes outside Europe.
- QUESTIONS & ANSWERS
MEP Edit Herczog (S&D) recalled the wide support given by MEPs to Erasmus for Young Entrepreneurs and praised the Europeanization of SMEs resulting from this project. She inquired about the possibilities to improve the promotion of the scheme and to achieve efficiency gains.
MEP Angelika Werthmann (ALDE)asked the Commission if there were figures showing how many new entrepreneurs are still active several years after taking part in the scheme. She also wondered how this action could help in the countries most hit by the crisis and by youth unemployment.
MEP Helga Trüpel (Greens/EFA) inquired whether the frontloading of appropriations under the EU budget for youth employment could also lead to step up Erasmus for Young Entrepreneurs; and what could be done in terms of better promotion of EYE, especially in certain countries.
Rapporteur Paul Rübig (EPP) asked how much budget would be needed in 2014 to carry out this action successfully.
MEP Andrej Plenković (EPP)underlined the importance of EYE for the integration of Croatia in the European market, mentioning the recent designation of the Chamber of Economy as contact point, and pledged to promote this scheme in order to attract Croatian entrepreneurs.
MEP Ingeborg Grässle (EPP) asked the representative of the European Commission to verify which article of the Financial Regulation prohibited transfers of money as mentioned during the hearing.
MEP Salvador Garriga Polledo (EPP) asked for the implementation rate of EYE.
Mr Weinbergerprovided replies to the Members, acknowledging that the number of exchanges in the future would be dependent on the amount set aside for EYE in the EU budget. Given the limited funding capacities, he wondered whether additional promotional activities would be really necessary, and considered that going global was not the priority. He noted that both IOs and the Commission were subject to human resources constraints which prevented it from stepping up significantly their activity. He also pledged to forward additional information on the Financial Regulation in writing to the relevant Members. On other issues, he pointed to the excellent performance of Spanish and Italian entrepreneurs in benefiting from the scheme; and he informed the Members that the impact of EYE on the entrepreneurs would be part of the upcoming evaluation.
- CONCLUDING REMARKS
MEP Paul Rübigconcluded the hearingby thanking the participants and by underlining how Erasmus for Young Entrepreneurs has been a success story in Europe's attempt to be on the edge of support to SMEs, and takes particular relevance with the current EU's efforts to fight youth unemployment.
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