EU funding to small businesses advances e-commerce and now needs a greater performance focus
A report published today by the European Court of Auditors (ECA) finds that support from the European Regional Development Fund (ERDF) to small and medium-sized enterprises (SME) in the field of e-commerce - buying and selling goods on the internet - has contributed to increasing the availability of business services online. However, shortcomings in the European Commission’s monitoring instruments made it impossible to assess to what extent ERDF support has contributed to the achievement of national and EU information technology (ICT) goals as well as to SMEs’ own business plans. Moreover, weak selection procedures by Member States mean that many projects are unlikely to provide value for money.
"E-business is still business, and business needs planning, clear objectives and ways of measuring them,” commented Oskar Herics, the ECA Member responsible for the report. “Too many of the projects we audited did not have these elements. The Commission should make sure that Member States monitor the actual impact of their grants on small business development and, wherever possible, link payments to results. It’s good to be on the Information Super-Highway, but we have to know where we are going.”
The EU's auditors found that Member States’ operational programmes (OP) served as a good basis for providing support to SMEs in the field of e-commerce but not for performance measurement. Managers of the programmes focused more on using the money (outputs) than on achieving results at both the selection and monitoring stages. Overall, SMEs implemented the projects smoothly but the results achieved were not always apparent. The auditors therefore recommend that the Commission:
-ensure that it obtains consistent and reliable information from the Member States on the progress of the OPs, not only in financial but also in performance terms, with a particular emphasis on result indicators and targets;
-insist that the selection criteria and procedures put in place by the Member States ensure the selection of projects that maximise added value among applicants in terms of fostering e-commerce development in SMEs and achieving the targets set by the Digital Agenda for Europe (DAE);
-require managers of the programmes in the Member States to put management tools in place to monitor the impact of the grant on the business development of the SMEs supported.
The Commission accepts most of the recommendations but admits that linking ERDF payments for e-commerce with results would be challenging.