Introduction

Small and medium-sized enterprises (SMEs) play a significant role in the economy of any country, providing jobs for people and the state with financial resources. Small businesses influence economic growth because they are more flexible and can respond faster to changes in the external environment than large companies. [22, С.701] In addition, small businesses contribute to the sustainable development of regional economies by making significant contributions to overall production and exports of goods and services that may not be available in nearby markets. Medium-sized businesses have larger resources and typically engage in more complex activities than small businesses. [23, С.21] Such companies often invest in the research and development of new technologies, products and services, which contributes to innovative economic development. Moreover, medium-sized enterprises actively participate in export operations, creating competition in the market.

Methodological basis of the study

In this article the authors used general scientific research methods such as methods of system analysis, synthesis, the method of comparisons and analogies, as well as formal logical, graphical methods and the transition from the general to the particular.

The criteria for classifying business entities as small and medium-sized enterprises

The criteria for classifying business entities as small and medium-sized enterprises in France were established by Decree No. 2008–1354 of December 18, 2008 “On criteria to determine the category of an enterprise for the purposes of statistical and economic analysis,” which, in turn, compiled taking into account the rules of the European Union. In accordance with Decree No. 2008-1354, four categories of enterprises are defined in France, differing in the number of employees, the size of trade turnover and the book value of assets:

— microenterprises (microentreprises or TPE) – up to 10 employees, turnover or book value of assets within 2 million euros;

— small and medium-sized enterprises (PME) – up to 250 employees, turnover – within 50 million euros or book value of assets within 43 million euros;

— enterprises of intermediate size (ETI) – from 250 to 5000 employees, turnover of less than 1.5 billion euros or assets within 2 billion euros;

— large enterprises (GE) — over 5000 employees, or up to 5000 employees, but with a turnover of more than 1,5 billion euros and a book value of more than 2 billion euros.

The activity of the SMEs in the European Union

According to Statista, the number of SMEs worldwide has grown from 274,1 million in 2012 to 340,9 million in 2023. The number of enterprises is growing every year, with the exception of 2020 (327,8 million), when the number of companies decreased due to the coronavirus pandemic. The growth in the number of SMEs over the past 12 years shows that they are effective and it highlights their role in the economy. Therefore, support for small and medium-sized businesses from the state and society as a whole is important for the development of the country.

The European Union (EU) has developed a strategy for small and medium-sized businesses to support and stimulate the development of this sector of the economy. The European Commission developed and presented the Strategy in a document called the “Small Business Act for Europe” (SBA) in 2008. This document sets out several principles aimed at improving the business environment for small and medium-sized enterprises in the EU. [1] These principles include improving access to finance, investment, support for innovation and digitalization, reducing bureaucratic barriers, reducing the tax burden and facilitating access to education and skills for entrepreneurs, as well as facilitating access to the European internal market. [2]

The activities of SMEs have a positive impact on GDP, providing employment to the population and replenishing the state budget. However, France ranks 15th and lags behind the top twenty European countries in terms of the contribution of SMEs to GDP (4,6%). [3] The leaders in this indicator are Ireland (8,9%), Luxembourg (8,7%) and Croatia (8,3%).

It’s worth mentioning that in 2018 a new record growth in company creation was fixed. In France, 691 000 companies were created, up 17% from 2017. Micro-enterprise registrations were particularly strong (+28%), followed by individual entrepreneurs (+20%). [4] In 2018, the share of micro-enterprises increased to 45% compared to 41% in 2017, while the share of individual entrepreneurs remained stable (26%). [5]

Governmental support of innovative SMEs in France

Small and medium-sized enterprises in high-tech industries are often the source of new technologies and innovations that help strengthen France’s competitiveness and innovation potential. The French government actively supports the development and stimulation of SMEs in high-tech industries through various programs and support measures: financing, tax incentives, training and consultations.

For example, in France, the national agency responsible for supporting the creation of enterprises is Bpifrance (Banque Publique d’Investissement). Bpifrance provides financial support and advisory services to small and medium-sized enterprises, helping them realize their business projects and innovative ideas. Among the financial products available in the arsenal of this bank, one can highlight such as a subordination loan, an advance to repay debt obligations, loans for the implementation of environmental projects, leasing of transport and technical equipment, loans for the development of export potential, etc. [6]

Let’s take a closer look at forms of support. The first way to support SMEs in France is a subordination (participatory) development loan designed to strengthen the financial structure of an industrial enterprise during the implementation of development and investment programs (purchase of premises, equipment, access to foreign markets, environmental protection measures, training, advertising costs etc.). [24, С.888] The program covers industrial enterprises that were created more than three years ago, are in a stable financial situation and whose annual growth is at least 5%. The maximum amount of the loan provided is up to 3 million euros (subject to the attraction of funds from other banks or the company’s own funds). The loan period is 7 years.

The second type of support for SMEs is the mobilization of funds to pay off debt obligations. The Agency’s clients are given the opportunity to receive funds in advance to make the necessary payments to government, public organizations and enterprises.

The third type — “Green” loan — is issued to SMEs to co-finance activities related to environmental protection, as well as the promotion of energy-efficient equipment to the market. Industrial enterprises established more than three years ago and in a stable financial situation can apply for a loan. The company’s own funds for the implementation of environmental projects must be at least 60%. The maximum loan amount provided is up to 3 million euros. The loan period is 7 years.

Fourthly, this is the purchase of equipment on lease, including commercial vehicles, computer equipment, machine tools, etc. The maximum amount is up to 40 thousand euros.

Fifthly, we note the acquisition of real estate on lease. The minimum amount provided is from 200 thousand euros.

Sixthly, there is also a loan for the development of export potential. This is a mechanism to provide access to credit for industrial enterprises that invest in expanding their production intended for export, as well as the production capacity of the enterprise as a whole, if it exports at least a third of its products. In particular, preferential lending covers such types of international activities of industrial enterprises as participation in exhibitions and fairs, training of personnel in foreign economic activity, market research, bringing goods into compliance with the technical norms and standards of the exporting and importing countries, and the creation of a subsidiary or a branch of a company abroad, etc. [25, С.608]

Seventh, it is necessary to allocate funding for the implementation of international-level communication projects (creation of a website in several languages, marketing and communication materials and translations associated with them). The amount of the loan provided is from 20 to 150 thousand euros for a period of up to 6 years.

In addition, French Minister of Finance and Economy proposed that BPifrance create a new investment instrument that would allow the French, along with the state bank, to invest in French SMEs and participate in the country’s economic strategy and company financing, which will allow them to increase capital. The amount that can be involved in this instrument is 10 billion euros. The French invest this amount in type “A” savings, and about 22,4 billion in “life insurance” deposits.

This mechanism was not invented for the first time — it already existed, but was intended to finance public infrastructure by attracting private investment in government bonds. At the moment, this method of attracting cash flow will not work, since interest rates are quite low and do not provide high returns for investors.

The GIANT Innovation Campus in Grenoble, Rhône-Alpes region, France: priorities of innovation growth and governmental support

The French government introduced a far-reaching and largely innovation-driven economic stimulus package in December 2009. To date 35 billion euro in grants have been allocated to projects in five priority areas deemed to stimulate economic growth and create jobs:

• Higher education and training;
• Research;
• The automotive, aeronautics and space, environmental, digital, and biotech industries, as well as small- to medium-sized businesses;
• Sustainable development;
• Digital technologies.

The French government’s economic stimulus program is administered through more than 30 financing instruments targeting a wide variety of projects. Applicants must present a strategy that explains how the different instruments will be leveraged in a cohesive manner. The GIANT campus came up with the following grant application strategy: Facilities (Equipex grants), which pay for international-caliber scientific facilities and equipment.

The Rhône-Alpes region, home to GIANT, saw Equipex facilities grants awarded to nineteen projects (nine of which are in Grenoble), second only after the Greater Paris area in terms of total funding. Five of these projects will be located on the GIANT campus — a number that illustrates the campus’ excellent grant application success rate, which is well above the national average. Four of these projects are in nanotechnology. The fifth is for the construction of a new-generation beamline at the ESRF. Work began in August 2020.

Let’s consider more closely the main of above mentioned projects, which, together, have been allocated 340 million euro in funding (Table 1).

Table 1

Main innovative projects of the GIANT Campus in France and their governmental support [7]

Going further, let’s mention Laboratories (Labex grants), which are intended to provide substantial resources to laboratories that have already earned international recognition so that they can hire senior scientists and purchase equipment to maintain a high level of scientific excellence.

Grenoble is home to eight of the laboratory projects that received grants, and three of these are primarily located at GIANT, covering the following fields of investigation — Nanotechnology, Biology & health and Energy (Table 2).

Table 2

Laboratory projects located in GIANT in the sphere of Nanotechnology, Biology & health and Energy [7]

So, according to the data in Table 2, we can see the strong pillar of the governmental support through various grants applying for research and development as well as the innovative decisions being developed by SMEs.

Conclusion

Thus, we can conclude, that SMEs in France are actively developing and producing high-tech products in industries such as automotive, aerospace, pharmaceuticals, electronics and information technology. They also invest in research and development of new technologies to remain competitive in the global market. Such companies have flexibility and the ability to quickly implement new ideas and technologies. In addition, they often operate in market segments where larger companies are unable or unwilling to compete, which contributes to diversity and competition in the market.