SME Chamber

Vince Farrugia calls for greater support to SMEs to generate employment opportunities

 GRTU Director General and EESC employers' representative Vincent Farrugia has this week chaired the second EESC study group on the Commission Communication on Youth Opportunities Initiative, issued at the end of last year. Mr Farrugia argued that SMEs are the largest employers and within SMEs exists the capacity absorb the largest number of unemployed. They must however be supported, with access to finance, financial incentives and schemes for employment, in order to provide them with the capacity to employ.


The Youth Opportunities Initiative builds upon the EU 2020 flagship initiatives 'Youth on the Move' and 'New Skills for New Jobs', as well as on the June 2011 Council Conclusions on youth employment and the Council Recommendations on early school leavers. Although both education and employment policies are primarily the responsibility of Member States, the European Commission can make an important contribution. One of the key elements of the Youth Opportunities Initiative is that the European Commission will help Member States to use the European Social Fund (ESF) more efficiently, in particular knowing that 30 billion euro within the ESF is still uncommitted to projects.

Between 2008 and 2010 youth unemployment has increased by one million reaching the unacceptable level of more than 5 million unemployed young people. This means that on average one in five young people on the labour market cannot find a job and in certain Member States it is almost every second young person willing to work who faces this problem. The youth unemployment rate is twice as high as for the whole working population and nearly three times as high as the rate for the adult active population.

In most European countries there is an ageing society. Europe's development will not be sustainable if millions of young people are lost for society. Between now and 2020, it is estimated that there will be 73 million job openings due to retirement of the baby-boomer generation of workers. These will need to be filled with appropriately qualified new staff. If no action is taken to better integrate young people in the labour market, and especially the early school leavers, millions of them will risk facing persistent difficulties and marginalisation over time.

Vince Farrugia presented his comments as follows:

  • Individual support to young people for an easier access to the labour market


Support to entrepreneurship

  • Access to finance and tax relief for young entrepreneurs as well as fiscal incentives for business transfers
  • Implementation of an unemployment insurance free of charge during the first years for all business founders who start their own business directly after having finished education
  • Fostering entrepreneurial thinking in schools and universities, introducing mandatory courses on setting up business plans, i.e. getting involved with the idea of self-employment
  • Specific training and mentoring measures (including on legal aspects) for young people willing to become entrepreneurs

Support to tackle skills mismatches

  • Providing early orientation and guidance services to young people in order to opt for disciplines where job offers are in demand, notably sciences and mathematics but also for more traditional craft and trades in partnership with Crafts and SMEs representative organisations
  • Offering competence assessment and further training in view of full qualification


Support to companies to foster the recruitment of young people

  • Financial incentives for micro-companies to hire young people
  • Administrative and financial incentives to increase the number of apprenticeship places for young people and apprentices recruitment in micro-companies
  • Specific support programme such as the "Apprenticeship and handicrafts trades"




Support to Member States to adapt education and training systems

  • Introducing or extending alternating education and training systems such as apprenticeship and work-based systems all over Europe
  • Creating partnerships between education and businesses for higher employability of youngsters
  • Setting-up bridges between crafts businesses and higher education
  • Providing second chance education for early schools dropouts
  • Fostering initial and continuous Vocational Education and Training for a higher employability
  • Supporting transnational learning mobility for young people in Vocational Education and Training including apprentices.

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