Research Paper (undergraduate) from the year 2006 in the subject Business economics - Company formation, Business Plans, grade: 64 %, University of Lincoln (Business School of Lincoln), language: English, abstract: In the EU we have 23 million of small medium-sized enterprises (SMEs) providing 79 millions of jobs. It will be explained shortly by the author what the relevant sizes are of defining an SME correctly. 99 % of all enterprises in the EU are SMEs. This means, that they are the backbone of the European economy, acknowledged as a constant source of ideas, innovation, entrepreneurial skills, the principal providers of existing jobs and the main source of new employment. But as they only have limited human and financial resources, they often are caught in their particular environment and are not able to expand their business to other countries. This means, that they can not act internationally like all the big and global oriented companies. Things like bureaucracy burdens, getting their innovated products duplicated by the big companies, not having the knowledge about opportunities to enter new markets, lack of finance, etc. are making it very hard for them to survive. And making the step from local to international, national or even regional can turn out in big issues as well. That's why the European Commission has already done and will do even more in future to protect Europe s SME economy and support them to get bigger and prosper. When SMEs are growing they will be able to provide more jobs and therefore our economy will be able to keep pace with the dynamic economy of the 21st century. Policy needs to provide the right business environment. They have to improve the framework in which SMEs operate. The Policy has to focus on helping the different types of small business thrive and prosper, whether they are start-ups, high-growth companies, traditional family firms, artisans or professionals working by their own.