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Digital Single Market barriers continue limiting the SME’s potential for growth – conclusions from the debate of the Union of Entrepreneurs and Employers

Brussel, December 05, 2023


Digital Single Market barriers continue limiting the SME’s potential for growth – conclusions from the debate of the Union of Entrepreneurs and Employers.


The advancement of digitisation has significantly benefited the European economy. Despite this, the Digital Single Market has yet to transition from an aspiration to a tangible reality. Over the forthcoming years, both European institutions and Member States must enhance their efforts to remove all regulatory barriers and establish a favourable digital environment for the growth of European SMEs – was the conclusion of the Working Lunch titled “Digital Single Market Future & Opportunities for SMEs”, that took place on December 5th in Brussels.

This year, we celebrated the 30th anniversary of the EU’s Single Market as a catalyst for growth, bolstering Europe’s economic and political influence on a global scale. While European member states’ political backgrounds may differ, we hold a unified vision for a Single Market that fosters increased business opportunities through trade, generating new jobs. The European Commission projected that eliminating barriers within the Single Market for goods and services could result in a potential gain of €713 billion by the end of 2029.

Technological advancements have created the need to broaden it and build the European Digital Single Market. The strategy officially outlined in May 2015 focuses on unlocking digital perspectives for individuals and businesses while strengthening Europe’s position as a global frontrunner in the digital economy.

Digital Single Market Future & Opportunities for SMEs

Now more than ever, digitalisation plays a crucial role in building Europe’s economic resilience. This is why The Union of Entrepreneurs and Employers (ZPP), in partnership with Member of the European Parliament Kosma Złotowski, brought together European institutions representatives and leading organisations to showcase and brainstorm on the Digital Single Market strategy and its role in developing the SME sector.

The discussion featured a group of speakers that included Dr Horst Heitz, Executive Director, SME Europe. Chair of the European Steering Board, SME Connect; Maria Grapini, Member of the European Parliament, S&D Group; Michał Kanownik, President, Digital Poland Association; Karol Kasiński, Public Policy Manager, Amazon; Vincenzo Renda, Associate Director for Digital Transformation Policy, Digital Europe and Filip Świderski ECR Advisor.

The discussion began with opening remarks from MEP Maria Grapini, who highlighted that the full potential of the Digital Single Market has yet to be delivered. She underlined that the Single Market is far from being completely in place in many areas, limiting its growth due to regulatory burden. 

MEP Kosma Złotowski highlighted in commentary to the report the crucial importance of small and medium-sized enterprises to the Polish economy. He focused on the main challenges the Digital Single Market imposes from the SME’s perspective.

“The SME sector in Poland has been struggling for years with excessive bureaucracy, overregulation, and restricted access to financing from EU funds. The crises that have hit Europe in recent years  and the unreasonable pace of the energy transition imposed by Brussels have burdened companies with additional costs.  In addition to the chaos it has caused in the economy, the pandemic  has become an accelerator of digital transformation and made businesses face the need to adapt to the demands of this revolution. It is this vulnerability to crises and the crucial importance  of small and medium-sized enterprises to the Polish economy that makes the SME sector require special treatment when creating new laws and regulations in all areas’’ commented ECR MEP Kosma Złotowski,  on the report “The Digital Single Market and its Future in the Context of Development Opportunities for the Polish SME Sector”

During the event Paulina Szkoła, Digital Forum Director presented the key findings from the report published by the Union of Entrepreneurs and Employers, “The Digital Single Market and its Future in the Context of Development Opportunities for the Polish SME Sector”. The report discusses the strategic, regulatory and economic scenario that the European Digital Single Market has been generating for small- and medium-sized companies and the barriers that hindered it from growth.

As the report states, the advancement of the Digital Single Market has driven favourable regulatory changes, stimulating cross-border business expansion and benefiting consumers. Though Polish SMEs are tapping into its potential, obstacles endure. Despite progress in unified trans-border e-commerce laws, companies face multiple challenges due to overregulation, inconsistent implementation of common regulations and impediments to exchanging services and goods. A unified, comprehensive strategy is essential to fortify the EU’s digital economy.

‘’The establishment of the Single Market is undoubtedly one of the most outstanding achievements of a united Europe, although it remains an unfinished project in practice. Technological advancements, new economic sectors, business models, and sales channels, such as the dynamically evolving e-commerce sector, introduce new barriers and associated regulatory challenges. These challenges are particularly burdensome for SMEs, which constitute 99% of all entrepreneurs in the EU, providing two out of every three jobs in the private sector while accounting for over half of the total value added’’ – commented on the report Mariusz Mielczarek, Regional Director CEE, Public Policy, Amazon.

The report also aims to inspire the Polish Government to push for an ambitious Digital Single Market agenda during its presidency in the Council of the European Union, which will be held in the first half of 2025. Michal Kanownik, President of the Digital Poland Association and Board Member of Digital Europe, shared his recommendations with the Polish representatives:

The actions of EU countries, including Poland, in developing the Digital Single Market should primarily support achieving goals set by the European Commission in the policy programme “Path to Digital Decade”, whose foundation is the digital transformation of businesses. According to the framework, by 2030, more than 90% of SMEs should reach at least a basic level of digital intensity, and 75% of EU companies are expected to use Cloud, AI, or Big data. While these are highly ambitious goals, they are achievable under one condition – EU-designed regulations should support the development of modern technologies rather than create unnecessary barriers. Over-regulating certain areas related to digitisation poses a risk of limiting innovation potential, making it challenging for Europe to compete in this field with the United States or China. It will be a significant challenge for the upcoming Polish presidency in the EU Council to maintain the right balance between regulating the digitalisation sector and addressing the needs of innovative businesses and citizens“.

The full report is available HERE

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