What is Early Warning?
The overall objective of Early Warning Europe is to promote entrepreneurship and growth of SMEs across Europe. A key element is to create strong framework conditions for entrepreneurs and businesses across sectors that can help them face key challenges, including managing a crisis, dealing with bankruptcy and getting a second chance.
The project Early Warning Europe is providing advice and support to companies in distress. Such interventions can help prevent bankruptcies and its negative consequences such as job losses, increased economic risk for suppliers in the company value chain, and a potential economic, social and personal deroute for the company owners and their families.
An early intervention will increase the likelihood of a turnaround of the company resulting in a stable economic situation for the company and even sustainable growth. Moreover, if a company in distress is closed down at an early stage of the crisis, the intervention can help avoid an unsurmountable debt for the company owner thus giving him or her the chance to start a new venture (2nd Chance).
In 2016, 15 organisations from seven European Member States formed a partnership to develop and submit an application for the call “European Network for Early Warning and for Support to Enterprises and Second Starters“ under the EU COSME programme. The call is an integral part of the European Commission’s efforts to improve framework conditions for SMEs and entrepreneurs across Europe.
The partnership was selected in July 2016 to manage the implementation of Early Warning mechanisms in four target countries in Europe and to establish the European Network. The kick-off meeting was held on 9th-10th February 2017 in Holstebro, Denmark. During 2017, the partnership was focused on launching the European Network and establishing Early Warning mechanisms in selected regions in the four target countries.
The partnership will also engage with other regions and EU Member States to support the establishment of Early Warning mechanisms, so that companies in all EU Member States may eventually be offered support and advice on how to deal with a crisis situation.
This project is focused on:
First of all
Establish Early Warning mechanisms in four EU Member States: Poland, Spain, Italy and Greece. The Early Warning mechanisms in these First Wave countries will provide support to 3500 companies in distress in 2017-2019. We will also support the preparation and establishment of Early Warning mechanisms in at least five additional EU Member States in 2017-2019 – the Second Wave countries. The ultimate goal of the project is to establish Early Warning mechanisms in all EU Member States.
Establish a European Network of experts, public authorities, industry associations and chambres of commerce that are interested in issues relating to Early Warning and 2nd Chance. The Network will meet 12 times in 2017-2019 to discuss state-of-affairs and key issues as well as develop policy recommendations for improved framework conditions for SMEs and entrepreneurs across Europe. A key objective of the project is to transform this network into a permanent organisation that can contribute with policy inputs to policy makers and take lead on the establishment and further development of Early Warning mechanisms in all EU Member States after the finalisation of the project in December 2019.
Develop and test an innovative, data-driven method to identifying companies in distress. The ambition is to present a Next Generation monitoring and early warning method based on machine learning and big data, e.g. combining a wide range of data sources to be able to identify companies that are in risk of a bankruptcy. Relevant data sources can include basic information on geography and business sector, management structure of the company, public accounts, financial information, etc. The implementation of this innovative method will need to take into account the availability and quality of data in a specific region or country.