Europe’s population is ageing and the need for supporting SME-transfer initiatives in a systemic manner is increasing. One third of EU entrepreneurs, mainly those running family enterprises, are expected to retire within the next ten years. SME-transfers require a series of complex procedures which differ across EU member states. Very often entrepreneurs who went through an SME transfer face problems during and after the transfer phase. The problems are not necessarily related t the entrepreneurial strategy, but rather they stem from issues arising over the transfer phase.
Researchers have noted that in the past SME transfers relying on family transitions were going smoothly. Analyses of past successful SME transfers indicate that transfer of knowledge and experience from the older generation of entrepreneurs and their staff to the younger ones was a key to success. Today SME transfers within or outside the family have become rather difficult to pursue for various reasons. One reason has to do with the fact that young Europeans prefer to be employees rather self-employed entrepreneurs. Consequently, the most active age group in entrepreneurship is gradually shrinking.
It is well understood that “want-to-be entrepreneurs” do not take into consideration the advantages of SME take over, such as the existence of a functional production structure, a customer network, an established brand name, etc. Instead, they prefer to pursue an entrepreneurial career by establishing a new company. Under this circumstance, older worthy SMEs are driven to closure, with many jobs being lost.
The partners of TOK-TOC realize that there are few effective policies across European regions which reinforce and support “want-to-be” entrepreneurs in considering SME take over. We would all agree that if candidate entrepreneurs were directed toward investing in an already existing SME, everyone involved in the process would benefit. Both the ageing SME-owners and their staff could be actively involved in helping the younger generation of SME undertakers to carry on. The impact of SME continuation could definitely play a positive role in economic growth and employment. Existing data show that SMEs conserve five jobs on average, whereas start-ups generates on average two jobs. Also, the success rate of transfers is higher than that of start-ups.
The central issue of safeguarding business transfers is important for the policies and instruments of regional development in all partner regions despite the different regional requirements. TOK-TOC’s partners bring together partners with different competences while aiming at reaching similar objectives, creating synergies and benefits for all partners. The European Commission has been working on this theme since 1994; however, little progress has been made over the years. Initiatives facilitating SME transfer have taken place mainly when dealing with legal and fiscal issues.
We all know that family businesses conserve a certain entrepreneurial spirit inside the society and provide a natural incubator for young entrepreneurs. More importantly, family businesses with a long-term orientation provide an important element of stability in western economies. For this reason, local governments and communities of SMEs are collaborating in order to support the transference of the aged workforce’s knowledge to the newer generation of labourers. In other words, local authorities have not been enough involved in this procedure while it is increasingly recognized that national and European employment and growth objectives cannot be achieved without the active involvement of actors at the regional and local level. The project contributes to promote the use of new information and communication technologies by businesses; improve regional policies for employment, skills development, training and education; create the necessary framework conditions for regional economies to adapt to major socio-economic changes, notably globalization and demographic change. Investing in human capital through education is essential to improve the employment and the youth employment in times like nowadays where unemployment rate is 9.5%, youth unemployment is 20.6% and from the 22.7 million EU businesses only 9% employ more than 10 people.
The project idea of TOK-TOC has been based on data highlighting the adaptability of regional economies to recent socio-economic changes in EU, a major issue for sustainable economic development and employment. TOK-TOC’s partners are aware of the fact that national and European objectives for economic growth cannot be achieved without the active involvement of local and regional actors. The positive results observe under concrete economic development and employment policies, with special attention being given to SME transfer, has led TOK-TOC’s partners to the development of the project idea. Thus, the 6 partners of TOK-TOC are examining how transfer of knowledge and transfer of human-capital will be entrenched in national and regional policies enhancing life-long learning opportunities. Thus, TOK-TOC’s partenariat embraces 6 regions of gradient levels of experience in SME transfer which are matched for converging, phasing-out, phasing-in procedures conducive to competitiveness and employment. Special attention is given to cultural and contextual differences in instituted SME-transfer policies and practices. The actions and activities that are being carried out by TOC-TOC’s partners are reflected in the budget.
Through a thorough research process, TOK-TOC’s project-development team elaborated on the project idea and invited partners with relevant knowledge and experience to take an active role. Partners from the four EU zones were invited by the Athens Chamber of Small Medium Industries to become involved in designing, planning components and responsibilities. Today, the consortium of TOK-TOC constitutes a strong partnership that covers the North-South, East-West axes of the socio-cultural map of Europe. It allows maximum coverage of Europe with regards to activity testing, dissemination of project results, and exploitation of outcomes. It accommodates also regional cultural differences, thus, providing a greater opportunity to compare and contrast the success of a test activity and assess attitudes toward business succession and management of human capital across Europe.
The project idea has been based on the elements that give emphasis to the adaptability of regional economies during the recent socio-economic changes in EU, an important matter for sustainable economic growth and the employment. The partners of TOK-TOC know the fact that the national and European objectives for economic growth cannot be achieved without the active participation of regional and local stakeholders. The positive outcome that results from economic growth and employment policies as well as additional attention given to the transfer of the small and very small enterprises has led the partners of TOK-TOC to the development of the project idea. Consequently, the 6 collaborators of TOK-TOC will examine how the transfer of knowledge and the transfer of human capital will be entrenched in national and regional policies that are related to lifelong learning. In addition, the partnership of TOK-TOC embraces 6 regions with different levels of experience in handling entrepreneurial transfer in relation to convergence, progressive change, competitiveness and employment. Additional attention is given to cultural differences that affect established transfer policies and practices in small to medium-sized enterprises. The actions and the activities that allocated among the partners of TOK-TOC are portrayed in the budget.
Through an elaborate research process, the project development team of TOK-TOC created the idea and invited partners with relative knowledge and the experience to take an active role. Partners from the four quarter areas of the EU were invited by the Athens Chamber of Small Medium Industries to participate in the planning process in order to define the actions and responsibilities of management. Today, the partners of TOK-TOC represent a powerful collaboration that covers the North-South & East-West axes of the socio-cultural map of Europe. As a matter of fact, TOK-TOC’s partnership covers a wider area of Europe, allows the pilot testing of the actions, facilitates the dissemination of the results, and ensures the use of the outcomes. More importantly, it takes into consideration regional cultural differences, thus, providing a wider opportunity for comparing and contrasting the success of pilot testing as well as assessing attitudes toward the entrepreneurial and the human resources management in entire Europe.