SME Assembly 2025: The Critical Reforms Europe Needs for Competitiveness
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“Skills Mobility Is Central to SME Competitiveness” –Prof. Dr. Dr. h.c. Friederike Welter
Reducing bureaucracy is key to unlocking SME potential. Experts highlight the role of regulatory sandboxes to test new rules and encourage innovation without risking business operations.
The SME Assembly 2025 convened in Copenhagen under a banner that left little doubt about its priorities: “Successful SMEs, Competitive Europe.” The motto, adopted as the event’s guiding theme, framed every panel, masterclass, and corridor conversation across the three-day conference hosted in tandem with the Danish Presidency of the Council of the European Union.
Against that explicit backdrop, the flagship “Competitive Enterprise” panel focused less on slogans than on a blunt question: if Europe is serious about keeping its SMEs successful, what concrete choices must policymakers and business leaders make now?
Facilitated by Gerardo de Luzenberger, the panel turned from diagnosis to prescription. De Luzenberger kept the discussion tightly focused on implementable steps, insisting speakers move beyond strategic frameworks to proposals that could be tested, funded, and rolled out within a mandate.
That shift mattered: the Assembly’s theme was not merely rhetorical—participants repeatedly returned to it as a litmus test for every idea offered.
Prof. Dr. Dr. h.c. Friederike Welter (IfM Bonn) opened with a concise assessment drawn from long-running SME surveys: four problems persist and have hardened over years—
- skills shortages,
- increasing competitive pressure,
- the demands of digitalisation and AI,
- and rising bureaucracy.
More alarmingly, she said, many firms have deprioritised investment in innovation and business development in favour of short-term survival.
Welter did not stop at diagnosis. Under de Luzenberger’s prompting, she proposed a shortlist of measures: regulatory simplification, the wider deployment of regulatory sandboxes to pilot new rules before full implementation, a strict “SME-first” regulatory assessment for new legislation, and concrete steps to simplify recognition of professional qualifications and ease cross-border mobility of skilled workers.
“Skills mobility is not a fringe issue. It is central to ‘Successful SMEs, Competitive Europe,’” she argued.
Emilie Prouzet: Simplify, Innovate, Integrate
Emilie Prouzet,, director for Europe at the French Federation of Commerce and Distribution and president of the Single Market, Production and Consumption (INT) section at the European Economic and Social Committee (EESC), brought a structured, actionable vision to the debate.
She framed the EESC’s contribution around three pillars—Simplify, Innovate, Integrate—translating the Assembly’s theme into practical policy steps.
Simplify: Prouzet stressed the need to cut red tape and make EU regulations more accessible to SMEs. She advocated interoperable digital platforms to harmonize procedures across member states and closer monitoring of consistent Single Market rule enforcement.
Innovate: Expanding access to finance for technological and green projects was a priority. Prouzet called for scaling European digital innovation hubs to enable SMEs to harness AI and sustainable technologies, transforming compliance and adaptation into strategic advantages.
Integrate: Finally, she highlighted the importance of integrating SMEs into European value chains, helping firms move from subcontracting roles to leadership positions in strategic sectors. She also emphasized using cohesion funds to strengthen local industrial infrastructure and build a supportive ecosystem for regional growth.
Her intervention was widely praised for connecting EU ambitions to concrete measures.
As she summarized, “For Europe’s SMEs to truly compete, it is not enough to declare intentions. We need instruments, funding, and coordinated implementation.”
Entrepreneurial voices anchored the discussion in practice. Keylany Hassine, CEO of Istya, described how his firm leveraged EU-supported standards—the Smart Readiness Indicator among them—to win clients and improve margins after a decarbonisation project.
Hassine called for better dissemination of open-source and EU-funded technologies to SMEs and for aligning funding instruments with Europe’s industrial priorities, allowing strategic sectors to attract long-term investment rather than chasing short-term venture capital trends.
From Ideas to Action: Shaping a Competitive Agenda for SMEs
The participatory format of the Assembly transformed the audience into a policy laboratory, generating proposals that were immediately actionable and closely aligned with the Assembly’s theme.
A recurring theme was bridging the gap between policymaking and SME realities. David Caro, president of the European Small Business Alliance, questioned whether Brussels’ regulatory apparatus sufficiently understands SME realities, asking how many regulators have actually run a business.
He advocated for **immersion programmes—an “Erasmus for Policymakers”—**to allow legislators to spend extended periods inside SMEs and better calibrate rules to operational realities.
Collaboration and capacity-building emerged as other priorities. Panelists proposed measures to encourage SMEs to form consortia for public procurement, with consortium bids receiving preferential treatment. They also suggested entrepreneurial training for public servants to better identify and remove administrative bottlenecks that hinder SME growth.
Another urgent topic was succession planning. Regional data show that up to a third of SMEs risk closure within the next decade due to lack of business transfers. Experts stressed immediate action on advisory services, incentives, and matchmaking to prevent a potential “succession cliff” that could hollow out regional economies.
Innovation and talent development were central to ensuring long-term competitiveness.
Panelists argued for fewer, strategically located innovation hubs to attract global capital and specialized talent, more entrepreneurship education in schools, targeted support for female founders, and streamlined mobility rules for international talent.
Financing mechanisms were discussed as a linchpin for implementation. Proposals included a dedicated “Horizon for SMEs” funding stream, simplified application procedures, and better alignment of public funding with venture and equity instruments to support industrial SMEs and decarbonisation projects.
“If Europe wants its SMEs to remain competitive, these measures cannot remain theoretical. They must be piloted, measured, and scaled with clear accountability,” emphasized one panelist.
Collectively, these interventions formed a coherent operational agenda: reduce regulatory friction, boost workforce mobility, strengthen innovation ecosystems, secure SME succession, and align financing with strategic priorities.
De Luzenberger’s facilitation ensured this list did not remain a laundry list of wishes. Instead, the session concluded with a set of priority items that could be piloted at EU and national levels—actions fully aligned with the Assembly’s theme, “Successful SMEs, Competitive Europe.”
The mood in Copenhagen was pragmatic rather than pessimistic. Panelists and participants agreed on one overriding point: Europe possesses the instruments—funds, strategies, standards, and networks—to deliver results.
What it lacks is consistent implementation, political ownership from member states, and a cultural shift in how regulation is conceived and enforced.
If the Assembly’s theme is to be more than a slogan, the next step must be clear: translate the three-pillared policy approach into binding implementation plans with measurable targets and accountability across national capitals.
That, delegates argued, is the only path from policy ambition to the everyday competitiveness of Europe’s SMEs.
By Dorothée Oké, journalist
