Per Werngren says that European policymakers need to think small first if SMEs are to reach their growth potential
Small and medium sized enterprises (SMEs) are the motor of Europe’s economy, and European SMEs look to policymakers in Brussels to keep it running. I believe the upcoming EU cloud computing strategy due later this year will be critical for SMEs across Europe in determining whether they thrive, or simply survive. Europe must establish a ‘pro-cloud’ framework that allows SMEs to fully realise the benefits of cloud and achieve growth in an effective digital single market. At the same time, this frame- work should reflect the unique circumstances and needs of SMEs, something I call “think small first”.
It’s well accepted that SMEs are significant drivers of growth. This is even more so in times of economic crisis. The fact they are small businesses is an advantage, rather than a burden, as they are innovative by nature and quickly adapt to changes. It’s estimated that 85 per cent of net new jobs in the EU between 2002 and 2010 were created by SMEs, so this community must be prioritised in efforts to boost the European economy. SMEs in the ICT sector are particularly well placed to benefit from the roll-out of cloud comput- ing across Europe. Indeed, technology SMEs are forecast to stimulate over 550,000 new jobs by 2014.
Cloud computing has numerous benefits which already change the way European SMEs do business. It provides access to software and infrastructure previously only available to large corporations, putting SMEs and start-ups on a level playing field for a fraction of the cost. It also enables businesses to reach wider markets faster, which is vital when demand peaks for an SME product or service.
However, some barriers are delaying the full uptake of SME access to cloud computing across Europe. For example, diver- gent national laws within the EU, such as those governing the retention of data, or who has
jurisdiction over it; unneces- sarily increase the costs of delivering cross-border cloud services. And the costs of developing and negotiating commercial agreements that comply with national regula- tions in multiple markets canbe disproportionately high for SMEs.
With the EU-wide cloud computing strategy, the European commission has a unique opportunity to help European SMEs grow their businesses and boost economic recovery. MEP Edit Herczog recently indicated that only 8 per cent of European SMEs do business across their national borders. To resolve this worrying statistic, a solid regulatory framework is needed to ensure the trustworthiness and adoption of cloud-based technology by European consumers and SMEs alike. The public sector must lead by example in this area and incentivise greater SME involvement in cross-border public procurement, through simplifying online procedures to access public tenders and developing model pan-European contracts for cloud- related services. This would send a clear sign to SMEs that migration into the cloud isn’t just encouraged- it’s expected. Large corporations have the budget and experience to navigate bureaucracy, which is why I emphasise the need for policymak- ers to “think small first”.
In light of the growth potential of SMEs, EU vice president Neelie Kroes’ vision for Europe to be “cloud active” rather than simply “cloud friendly” is commendable. This vision is also reflected in DG Connect’s new mission statement, specifi- cally highlighting cloud computing as an element of economic growth for the single market. Europe is on the right track and abiding by the “think small first” principle will turn the vision into reality.
Per Werngren is president of the international association of Microsoft channel partners’ European, Middle East and Africa region.