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Promotion of Economic Development and SMEs

Small and medium-sized businesses, including in particular the mid-size, mainly family-owned “Mittelstand”, dominate the German economy. BAFA is an important central coordination point for most SMEs, since it offers multiple support programmes to help these companies sharpen their competitive edge.

Construction site with cranes Source: © Fotolia.com/frenk58

BAFA is an important central coordination point for most SME, since it offers multiple support programmes to help these companies sharpen their competitive edge. Other programmes provide support for implementing essential structural changes in SME, or for helping institutional bodies that represent and promote the interests of SME.

The various support programmes managed by BAFA on behalf of and in agreement with the Federal Ministry for Economic Affairs and Energy target specific areas for future-oriented investments:

An important task is the promotion of advisory services. Financial aid is granted for start-up counselling and general advisory services, for example issues of business management, adjustment to new competitive conditions and environmental protection.

BAFA also renders administrative support to the participation of German companies from the old and new laender in selected fairs and exhibitions abroad. Taking part in the official participation of the government in trade fairs abroad means a considerable saving of expenses, good advertising and representation possibilities as well as organisational advantages to the exhibiting companies.

Furthermore, BAFA is in charge of important individual tasks of promoting the small and medium-sized companies by Federal Ministry for Economic Affairs and Energy: For instance, the Institut für Mittelstandsforschung (Research Institute for Small and Medium-Sized Companies) receives annual financial assistance in order to be able to fulfil its task to investigate the situation, development and problems of the small and medium-sized companies. In addition, BAFA supports the work of the Rationalisierungs- und Innovationszentrum der Deutschen Wirtschaft e. V. (RKW) (Rationalisation and Innovation Centre of German Industry) and of the Arbeitsgemeinschaft für wirtschaftliche Verwaltung (AWV) e. V. (Work Group for Economic Administration) by giving annual grants. The Deutsche Zentrale für Tourismus e. V. (Central Tourism Office) receives grants to support its activities aimed at the promotion of tourism, especially international and national placement of Germany as an attraction for tourists.

Together with the laender and the Zentralverband des Deutschen Handwerks (Central Association of German Handicrafts), the government, through BAFA, participates especially in the maintenance of the Deutsches Handwerksinstitut (DHI) e. V. (German Handicrafts Institute) in order to increase productivity in handicrafts. Its purpose is to conduct scientific studies on specific issues, mainly in the economic and technical area, in order to promote German handicraft trades. Furthermore, BAFA gives annual grants to the Federal Award for Outstanding Innovation Results on the occasion of the International Handicrafts Fair in Munich as well as for the annual Competition of the Young Handicraftsmen on national level organised by the Stiftung für Begabtenförderung im Handwerk (Foundation for Talents Promotion in Handicrafts) and the International Professional Competition organised every two years. In addition, BAFA is the accreditation agency and responsible for granting the attestation and certifying agencies the authority to check the procedures and methods of awarding contracts and issuing certificates within the area of application of the European Economic Community Guideline 93/38.

One of the projects supported by BAFA is the establishment, modernisation and equipment of vocational training centres above company level of the handicraft sector and of the manufacturing industry in in the Federal Republic. Of special importance in this respect is the modernisation and reorganisation of training facilities to become centres of specialised skill and technical competence and the equipment of technology transfer centres. In addition, the project is assisted by the laender, the Federal Ministry of Education and Research, trade corporations and the Chambers of Industry and Commerce as the local funding bodies.

In the case of the German industrial film award sponsored by the Federal Ministry of Economic Affairs and Energy, BAFA functions as an agency for the annual competition. The aim is to assist German films dealing with issues of the modern industrial and service society in the Federal Republic of Germany. In accordance with the provisions of the film promotion law, BAFA issues certificates for cinema films (certificate of origin). This certificate is the prerequisite for a film producer to get financial assistance by the Film Promotion Agency and to utilize their film rights abroad.

The objective of the new “INVEST – Venture Capital Grant” assistance measure is to provide greater and more sustainable access to capital for young, innovative companies. In addition, it aims to recruit more business-minded people to take risks and invest in young, innovative companies.

As a result of current demographic trends, small and medium-sized companies are finding it particularly difficult to source skilled labour. To meet their future needs, all options for securing and maintaining the supply of skilled labour must be deployed. In 2015, the Federal Ministry for Economic Affairs and Energy expanded existing programmes for this purpose and also initiated a number of new measures, which are being implemented by BAFA. Under the “Guidelines on vocational consultations to increase cross-border mobility of trainees and skilled young people”, which came into effect on 1 January 2016, businesses and trainees should already be encouraged during training to have an open-minded attitude towards professional mobility. With this goal in mind, mobility coaches are available to provide valuable advice on completing a stay abroad.The programme “Support for SME in arranging tailored placement for trainee positions and integrating foreign skilled workers” (or “Tailored placement” for short) is designed to provide active support to small and medium-sized businesses in ensuring a long-term supply of skilled labour for their future business needs.