Small and medium-sized companies (SMEs) from across Europe that service the public sector in France are rejoicing at a measure rushed through Parliament recently. Citing the USA as an example to follow, the new measure aims to ensure that a larger slice of public contracts goes to SMEs, whether French or from elsewhere in the EU.
In the United States, SMEs are guaranteed 40% of the value of public contracts while in France, SMEs struggle to capture 10%, according to the Federation of French Builders. While European and French constitutions would not allow such overt positive discrimination as in the US, the French government is attempting to force open this lucrative market as part of its drive to foster SMEs.
Slowly but surely, France is putting together the building blocks necessary to promote smaller companies and encourage new business start-ups.
France has long lagged behind in this domain and awoke to the benefits of SMEs only in the 1990s. This month sees the merger between the French Bank for SMEs (the BD-PME) and the National Agency for Research (Anvar). The latter’s sister agency, the National agency for Business Creation (Apce) will work in close cooperation.
The new entity, which will go under the cumbersome abbreviation Anvar-BDPME, is modelled deliberately on the US Small Business Administration, which is largely credited to have been the single most important ingredient in promoting small US companies.
The first task of Anvar-BDPME is to redesign their loan offer. It will now propose three types of loans differentiating start-up needs from development and research funding needs. For companies looking to gain a slice of large public sector contracts, the new bank will offer an insurance guarantee for work completion in the case of bankruptcy - apparently a major stumbling block in the past for SMEs to get large contracts.
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