Saturday , June 10 2023

Bringing EU Entrepreneurs together through
Cross-border Services:
SPOCS – a Case Study

Doina BANCIU, Radu Marius BONCEA, Carmen Ionela ROTUNĂ, Monica ANGHEL
I C I Bucharest
(National Institute for R & D in Informatics)

8-10 Averescu Blvd.
011455 Bucharest 1, Romania;;;

Abstract: The work presented in this paper highlights the continuous improvement that has been made in terms of economic competitiveness of the European companies, with an emphasis on Small and Medium – sized Enterprises (SME’s) by enabling all businesses – national and European – to benefit from available, efficient and interoperable electronic procedures.

Keywords: Cross-border services, Large-Scale Projects, Small and Medium-Sized enterprises, Services Directive.

>>Full text
Doina BANCIU, Radu Marius BONCEA, Carmen Ionela ROTUNĂ, Monica ANGHEL, Bringing EU Entrepreneurs together through Cross-border Services: SPOCS – a Case Study, Studies in Informatics and Control, ISSN 1220-1766, vol. 21 (3), pp. 303-313, 2012.

1. Introduction

In the literature review (Adshead, 2002; Hooghe and Marks, 2004; OECD, 2005) ([1], [11], [4]) governance in an EU context is defined as a dense network of policy actors involved in the policy process to carry out social functions. Increasing emphasis on the principles of good governance has been associated with a strengthened role for regions in economic development. For entrepreneurship development this is particularly important since it is at the sub-national level that entrepreneurs are most likely to come into contact with the state. Two governance issues are particularly relevant to the promotion and facilitation of successful cross-border entrepreneurship. The first relates to the suitability of the governance structures, at different levels, in place to achieve this; the second to the nature and extent to which entrepreneurs my be involved in the policy-making process. In recent years, the EU has played an important role in the establishment of governance structures at national, regional and local levels and it has also encouraged a process of administrative restructuring and enhancing institutional capacity, involving more power being delegated to the regional and local levels, as well as shaping the relations between the public and private sectors, by promoting the creation of networks and partnerships.

In this context services currently represent two-thirds of the EU’s GDP and employment, only making up for around one-fifth of total intra-EU trade and only about 8% of European SMEs do business in other Member States. This lack of dynamism not only hampers choice for consumers, but also prevents small and innovative businesses to grow, develop their activities and become more competitive. In order to unlock this potential of the Single Market for services by 2012, the European Commission has adopted a set of targeted actions to tackle remaining problems.

The Services Directive aims precisely at removing unnecessary and burdensome obstacles to trade in services in the Single Market. One year after the implementation deadline, the Commission and the Member States have completed an assessment of how the Directive has been implemented on the ground. The results of this so-called “mutual evaluation” exercise conclude that, while much has been achieved so far, the Single Market for services is not yet delivering its full potential [17].

Given the potential for additional growth this represents, a more thriving EU services sector is a priority for the European Commission, as services are the driving force of the EU economy and statistics show that around nine out of ten new jobs are created in this sector. As identified in the Commission’s Annual Growth Survey, the EU will only meet its ambitious Europe 2020 targets for sustainable and inclusive growth if urgent structural reforms are prioritized in services and product markets to improve the business environment.

Nevertheless, the EU Single Market for services is still not functioning properly and needs further attention – this is the outcome of an extensive evaluation of the Services Directive.

A number of legal and administrative barriers still make it difficult for businesses and consumers to buy and sell services in and from other EU countries. They also make it difficult for SMEs and the self employed persons to start new activities or to expand at home or abroad. In some cases, SMEs are required to carry out burdensome time-consuming formalities and registration procedures before they can cross the border to provide a service [12].

The Service Directive adopted at the end of 2006 has been a crucial milestone in improving the legal framework for services in Europe. It aimed at removing a large number of obstacles to service trade, requiring EU Member States to remove unjustified or disproportionate legal and administrative barriers to the setting-up of a business or the provision of cross-border services in the EU. Also, it aims to dismantle barriers affecting service recipients wanting to have access to services from other Member States. The Directive had to be transposed and implemented in all EU countries by 28 December 2009. It highlights that further improvements need to be made to make EU markets work better and create the growth and jobs the EU desperately needs and it also identifies key priority actions to carry out to move towards a better functioning Single market for services.

The Directive applies to two main situations:

  • The permanent establishment of businesses, i.e. cases where an individual entrepreneur or business wants to set up a permanent establishment (such as a company or a branch) in its own country or in another EU country;
  • The cross-border provision of services, i.e. cases where a business already established in an EU country wants to supply services in another EU country, without setting up a permanent establishment there, or cases where a consumer living in one EU country wants to buy services from a provider established in another EU country. Examples: a painter established in France is commissioned to paint a house in Germany, or a consumer from Finland wants to use an architect established in Estonia [12].

The Services Directive obliges each EU country to set up a “Point of Single Contact” – e-government portals for businesses that are now operational in most Member States – allowing businesses to complete all administrative steps online; obliging national administrations to cooperate with administrations in other EU countries to avoid duplication of controls on businesses and significantly reduce the administrative burden on business entities.

Furthermore, the Directive brought about the creation of a comprehensive network of administrative cooperation to facilitate the free movement of services, which now links up over 5 000 authorities across the EU.

A multilingual electronic tool, the Internal Market Information system or “IMI”, is used to allow a fast and efficient exchange of information between these authorities.

It also gives consumers wider choice, better value and easier access to services across the EU: consumers will get better information on service providers and their services, such as information on after-sales guarantees and redress or the fact that consumers should suffer no discrimination based on their nationality or place of residence.

In economic terms, conservative estimates predict that the implementation of the Services Directive has the potential to bring about economic gains of up to €140 billion, representing up to 1.5% growth of EU GDP [4].

SPOCS is a three-year large-scale pilot project launched by the EC in May 2009 which aims to significantly facilitate life and increase transparency for SMEs and consumers when they want to provide or use services in the single market. Businesses are invited to test-drive the new services using SPOCS that will support travel agents, real estate agents and master builders in establishing a presence and doing business in other EU countries (e-practice).

Run largely with and/or by Member States, the LSPs develop practical solutions tested in real government service cases across Europe. These practical solutions will ensure that government administrations of different countries in the EU can speak to each other digitally despite different national technical specificities and languages [15]. The project consortium is composed of 34 partners, from 16 member states, including Romania, comprising of national public administrations, representatives thereof, local authorities, industries and universities, thus covering all walks of life.

Building on compliancy with the Services Directive (CE/2006/123) , SPOCS has been set up on the basis of the 2008 CIP ICT PSP Programme (project reference: 238935). The implementation of the SD concerns a large variety of economic activities (about 70% of EU GDP and total employment) and requires important legislative changes in all Member States (MSs) and the undertaking of a number of ambitious projects, such as setting up the national “Points of Single Contact” (PSCs) – e-Government portals for entrepreneurs active in the service sector and citizens.

For example, if a person wishes to open or extend a business abroad he/she has to travel to the city where he/she wants to expand his/her business, go to City Hall, the Trade Register, etc.. This means a waste of time and money and a lot of bureaucracy – applying for licenses, permits and completing other administrative procedures. With SPOCS, the entrepreneur can complete the formalities from his office, on-line, quickly and efficiently, only by filling-in the necessary forms and loading documents in electronic format.

In order to fulfill the administrative obligations and formalities in a uniform manner, SPOCS and its contributors, reuse key building blocks from other EU projects (such as STORK – Secure idenTity acrOss boRders linKed and PEPPOL – Pan-European Public Procurement OnLine) and build upon existing, interoperable standards, frameworks and national solutions to improve cross-border administrative processes.

SPOCS will, therefore, be carried out in a transparent way to facilitate consensus by public administrations, their suppliers and partners, industry and standardization bodies without replacing national systems.

The simplification measures foreseen by the SPOCS project should enhance the quality of completing electronic procedures for cross-border activities. The implemented project results will lead in reducing bureaucracy by electronic means, increasing transparency in the public sector, improving on-line services and generating benefits for global economic growth.


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