Euractiv: Published: Friday 15 January 2010   

The EU executive is planning to open a string of new offices across the world to help small businesses expand into new markets, but Brussels is wary of stepping on the toes of national agencies and private organisations which already provide such services, according to European Commission documents seen by EurActiv.

Millions of euro will be pumped into overseas advice centres to help European companies grappling with the legal and cultural challenges of working in new markets.

Funding has already been provided for the establishment of offices in India and China, although the latter has yet to open its doors due to wrangling over which organisation should run it.

A European Business and Technology Centre in New Delhi, India, has been open since late 2008 with a total budget of €14.5 million to be spent over an eight-year period. The Indian operation will also expand into three more Indian hubs.

The planned SME Centre in China, which was officially agreed at an EU-China summit in 2009, will run for up to five years and has a budget of €5 million.

Bangkok and Moscow next on the list

Later this year, a similar office will open in Bangkok, Thailand, with a budget of €2.2 million for its first three-to-four years. Its mandate is to cover Thailand and the other south-east Asian countries that make up the ASEAN group.

The EU is also conducting a feasibility study to see whether it would be worth opening an 'EU Business and Technology Centre' in Moscow, Russia. Support for similar privately-run services is envisaged for Hong Kong, Malaysia and Singapore.

In addition to emerging markets, business support programmes already exist in Japan and South Korea.

The EU is currently reviewing the purpose of such offices to ensure their mandate is clear amid concerns that promoting European SMEs abroad might encroach on the work done by national embassies and enterprise promotion authorities.

Similarly, there have been fears that publicly-funded business advice centres could overlap with the existing work of business organisations or private consultancy firms.

Brussels reluctant to compete with member states and private sector

An internal paper produced by the EU executive warns against duplicating services that have already been developed by locally-established organisations, whether public or private.

"Where there is ad-hoc risk of overlapping or competition, care must be taken that the EU-funded support does not compete unfairly," the document states.

Publicly-backed services should be limited to those where there is a "market failure," according to the European Commission.

While most European governments already promote businesses overseas, several smaller member states in Central and Eastern Europe have a less developed network of embassies, leading some to suggest that Brussels could play a role in helping their companies.

Policy review under way

The EU executive is in the midst of crafting a coherent policy on how to use funding earmarked by the European Parliament for overseas business support.

The diversity of what is needed is making it difficult to set out a one-size-fits-all policy in this area, and a number of ad hoc efforts have already been made to solve market-specific problems facing SMEs.

For example, the Intellectual Property Rights Helpdesk in Beijing helps companies navigate China's fraught patent system. These kinds of services could be integrated into a single one-stop-shop for SMEs, according to the paper drafted by EU staff.

Another concern is getting value for money, with officials conscious that the European Court of Auditors in Luxembourg will be looking over their shoulder to ensure public funds are well spent.

While EU money will be used to establish the centres, they are expected to become self-financing over time, potentially using fee-based services and membership fees to generate revenue over time.