Enhancement of the

Business Environment

in the Southern

Mediterranean

Countries

A project funded by the European Union

Regional Seminar

on SBA Governance

Workshop

Amman– 17/02/2015

A project funded by the European Union

The aims of the Workshop:

1. to develop a proposal and an action plan to

improve the governance of SME policies

2. to prepare the presentation of the proposals

for the Barcelona meeting (17-19 March 2015)

The proposal and the action plan should focus on:

• Delegation of responsibility for enterprise policy

• Inter-governmental coordination

• Public/private dialogue

EBESM Project 3

4

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SME Policy Index

The Mediterranean Middle East and North Africa 2014IMPLEMENTATION OF THE SMALL BUSINESS ACT FOR EUROPE

SME Policy Index

The Mediterranean Middle East and North Africa 2014

IMPLEMENTATION OF THE SMALL BUSINESS ACT FOR EUROPE

Contents

Key fi ndings for the Mediterranean Middle East and North Africa region

The policy framework, methodology and assessment process

Economic and SME overview of the Mediterranean Middle East and North Africa region

Part I. Results of the assessment by Small Business Act for Europe dimension

Chapter 1. Education and training for entrepreneurship, including training for women’s entrepreneurship

Chapter 2. Effi cient bankruptcy procedures and “second chance” for entrepreneurs

Chapter 3. Institutional and regulatory framework for SME policy making

Chapter 4. Operational environment for business creation

Chapter 5. Support services for SMEs and public procurement

Chapter 6. Access to fi nance for SMEs

Chapter 7. Supporting SMEs to benefi t from Euro-Mediterranean networks and partnerships

Chapter 8. Enterprise skills and innovation

Chapter 9. SMEs in a green economy

Chapter 10. Internationalisation of SMEs

Part II. Mediterranean Middle East and North Africa Economy Profi les

Chapter 11. Algeria

Chapter 12. Egypt

Chapter 13. Israel

Chapter 14. Jordan

Chapter 15. Lebanon

Chapter 16. Overview of Libya

Chapter 17. Morocco

Chapter 18. PA

Chapter 19. Tunisia

Annex A. Assessment grid and weights

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The results of the evaluation exercise

5

Comments from SME Policy Index

• Policy co-ordination remains a relatively weak point

• The recent elaboration of the new National Entrepreneurship and

SME Growth Strategy 2014-2018 is a milestone in terms of

overcoming this weakness in the policy environment. The new

strategy creates the opportunity to rationalise legislation and

regulations affecting SMEs as well as creates synergies between

actions and programmes

• The introduction of regulatory impact assessment is at an early

stage. An Evaluation and Impact Assessment Unit was established

in 2012; pilot applications have been conducted

6

The selected topic

introduction of a coordination mechanism to detect the impact of

the Law/policy or regulation before or as

we design it

Multiple organizations co-ordination

Intergovernmental coordination

mechanisms, change management

Enhance and institutionalize public

private dialogue

Impact detection device: (ex ante and post) SME Test tool or mechanism

to implement

Impact detection device: (ex ante and post) SME Test tool or integrated

impact analysis

7

Key components of the project

introduction of a coordination mechanism to

detect the impact of the Law/policy

Inter-departmental/institutional

co-ordination

Impact detection device,

government legislation

Public and private

dialogue

8

1. Intergovernmental/Interinstitutional

coordination. Definition

Intergovernmental/interinstitutional coordination may be defined as an arrangement

between or among two or more government/institutional bodies for achieving

common goals, providing a service or solving a mutual problem.

Why

To clearly set out the role of different departments in SME development and the

mechanisms by which policies and programmes can be co-ordinated.

What

Strengthening existing coordination bodies?

Focus on change management?

9

Organisational approaches and options

Creation of:

• small business department or agency housed in a

particular government department (the one that

ensures a more powerful voice)

• separate department

• semi-autonomous agency and/or network of

regional and local agencies

10

Functions

• Examining the potential for deregulation;

• Developing appropriate processes of appeals against regulation;

• Initiating and reviewing new legislation;

• Setting up impact evaluation measures;

• Establishing appropriate forms of self regulation;

• Finding means of engagement of the informal sector.

• Defining voluntary schemes or codes of practice

11

EFFECTIVE POLICIES FOR SMALL BUSINESS

2. Public Private Dialogues/Consultations

Structured mechanisms aimed at facilitating the discovery process by involving a

balanced range of public and private sector actors in identifying, filtering,

accelerating, implementing, and measuring actions and reforms

Why

• Managing engagement with the SME sector: To find mechanisms for

managing the relationship of government with the private sector and

SMEs in particular, enabling the views of the SME sector to feed into

public policy in an effective manner over time

• Obtaining feedback, evaluating specific measures: To obtain feedback on

specific policies and programmes that have been introduced to stimulate

the SME sector and remove barriers to its development.

12

What: Typology of PPD actions/projects (dialogue or rent extraction)

13

Typology of PPDs: 7 inter-locking types

National

Economy-wide

Permanent institution

Public-driven

3rd party brokerage/support

General orientations/ Many goals

Many actors

Local Sector-specific Temporary initiative Private-driven Locally driven/sustained Specific changes / Specific goal Few actors

Area

Scope

Institutionalization

Leadership

Ownership

Focus

Participation

PPD TYPOLOGY

19 Herzberg , World bank Group, 2013

3. Impact detection device, monitoring the

impact of government legislation

Organisation delivering services like: laws and policies evaluation to provide

impact evidences, including Policy Review and Planning Process.

Why

• To obtain evidence on the problems faced by SMEs in dealing with government

regulation, indicating areas where amendment is needed

What

• Establishing truly independent procedures, responsibility for monitoring and

evaluation

• Defining a Level of feasibility and kind of provisions

• Short term and long term strategy

14

3.1. Strategy

15

• Economic wide

• Sector specific Scope

• General policy

• Policy measure/interlinked Object

• Present

• Past and future Perspective

• Permanent

• Temporary Institutionalization

• Independent/ P&P driven

• Public driven Leadership

3.2. Two complementary approaches

A. Regulatory Impact Analysis and SME Test

(related to a new Law or policy)

B. Impact Analysis integrated in policy making

process (study on effects-Lesson drawing, future

context-scenario analysis, and so on)

16

A. Ria and SME test

17

A.1. What is the SMEs Impact Test?

• The SMEs Impact Test process seeks to help

P&P assess the impact of new proposals on small

business.

• The test should help SMEs complete the cost

benefit analysis element of the Impact Analisys

that includes:

- Alternative approaches are appropriate for firms

with fewer employees;

- Quantifying the annual costs the policy will place on

micro, small and medium size businesses.

18

SME Test

•

Integrated Impact Analysis

•

The process

• A. Development and Options stage: An initial sounding of small businesses

and their representative bodies to identify/verify the likely impact and solutions

before formal public consultation.

• B. Consultation stage: Where the impact appears to fall more heavily on small

businesses – i.e. firms employing fewer than 20, a more detailed exploration of

the issues and solutions with representative bodies and small businesses

should be undertaken.

• C. Final Proposal stage: Assessing and reflecting the representations made

by small businesses during the consultation in the Final Proposal, including

making any necessary changes to ensure that the policy is properly targeted

and adapted to the needs of small businesses.

19

SME Test

•

Integrated Impact Analysis

•

Four challenges

20

SME Test

•

Integrated Impact Analysis

•

Four challenges

• First theme: to develop a political framework of better regulation with clear

responsibilities and the setting up of measurable goals. It must become an

overall government decision to assess new regulation likely to affect

businesses.

• Second theme: to develop mandatory guidelines and procedures in order to

move forward and strengthen the use and quality of the SME test: guidelines

describing how the SME test should be conducted in order to increase

consistency across government services.

• Third theme: control mechanisms can play an important role in the

dissemination of a culture of better regulation. Feedback through the control

system challenges operational units to integrate established practices (Impact

Assessment Board)

• Fourth theme: it concerns the ongoing challenge no matter the level of SME

test, namely the access to data that allows for e.g. quantification of the impact

on SMEs. Data is necessary to be able to carry out high quality SME tests.

21

SME Test

•

Integrated Impact Analysis

•

Integration in

policy making process

• Integration in policymaking process – in order to mainstream sustainability and

stimulate the take- up of Impact Analysis results by decision-makers, the IA has

to be integrated in the policymaking process – at an early stage and at a

strategic level – in order to contribute to policy formulation

• Proactive and strategic approach – a proactive approach will help develop

policy options that address structural and strategic issues (e.g. root causes), to

help avoid problems and generate benefits, rather than measures to mitigate

and compensate negative impacts

22

Integrated Impact Analysis

•

SME Test

•

The Integration of Impact Analysis in

Policymaking Process affects all Stages of

Policymaking Process and key elements to

identify the windows for the impact detection

device intervention

23

Integrated Impact Analysis

•

SME Test

•

24

Analytical functions and deliverable

1: Strategic framework and identification of key sustainability issues

Purpose: To identify key sustainability issues and associated indicators, as a basis for

setting the baseline, comparing options and monitoring impacts.

2: Analysis of current trends and scenarios

Purpose: Understanding the current situation and trends of identified key sustainability

issues and indicators, and their likely evolution without policy change, provides the basis for

predicting sustainability impacts.

3: Identification of opportunities and formulating alternative policy options

Purpose: To formulate alternative policy options that can generate results.

4: Assessment of impacts (risks and benefits) of policy options

Purpose: To compare proposed and alternative policy options by impacts’ assessment,

including risks and benefits, as a basis for decision making

5: Monitoring and evaluationPurpose: To monitor implementation of the policy and its

sustainability implications

25

Integrated Impact Analysis

•

SME Test

•

Workshop Conclusions

1. Interinstitutional coordination

1. The project should provide the establishment of a

coordination body/organization, whose profile should

be defined

2. It could play functions like (to be better defined in the next few days)

1. Providing Know How needed to support an Informed Policy

Making process

2. Assuring the participation of all Stake Holders

3. Delivering the Technical coordination for the

implementation of the Mechanism to detect the Impact of

Law/policies

27

2. Public/Private Dialogue- PPD

1. The PPD should characterize all processes, including the Project proposal/Action Plan

2. The kind of mechanism to implement has to be defined according to the object of the project and it will be coherent with the action selected. In a first stage it will be created a PPD to drive the SME Test. In a second stage a PPD will be created to drive and support the implementation of the impact detection mechanism monitoring the impact of government legislation

3. Impact detection device and mechanism

monitoring the impact of government legislation

To promote a coordination mechanism to detect the

impact of Law/Policy, the Project and the Action

Plan should expect to achieve:

1. RIA and SME Test (short term)

2. Impact Analysis Integrated in Policy Making

Process (middle/long term)

Project description

30

Selected topic

Implementation period

Main Objective

Stakeholders

Result/Impact

Risks

Approach

Resources

Thank you for your attention

Contact:

Paolo Federighi

Email :

federighi@unifi.it

Project implemented by:

EBESM Project 11