Innovating, Gaining Market Share and Fostering Social Inclusion Success Stories in the SME Development

Micro- and small and medium-sized enterprises (MSMEs) play a key role in the economy, accounting for more than 90% of the number of companies in the region. Depending on the area of the economy, their contribution varies widely —from significant in terms of employment, to far less so in production and very small in terms of exports. The fact that they contribute more to employment than to output is indicative of relatively low levels of productivity. Their limited contribution to exports shows their marked orientation toward the domestic market and their dependence on the dynamics of domestic demand. Their output is therefore determined to a large extent by employment and wage levels in the economy as a whole.

Within the industrial structure, small and medium-size  enterprises (SMEs) account for a relatively larger proportion of production and sales in the larger countries of the region because the indivisibility of some productive activities increases the minimum efficient plant size. In smaller economies, then, large enterprises usually produce a significant proportion of the consumer goods that carry the most weight in the industrial structure.

The countries can be divided into three groups, based on the  relationship between the size of their economies and the sectors in which most SMEs operate. In the larger countries with the most highly developed industrial structure (Argentina, Brazil and Mexico), SMEs are concentrated in the food, textile and garment-making, chemicals and plastics and metallurgical industries. In medium-sized economies (Bolivarian Republic of Venezuela, Chile, Colombia, Ecuador and Peru) SMEs operate principally in the food and chemical industries.  Unlike the first group, they have only a scant presence in  the metallurgical sector. In the smaller countries (Costa  Rica, Nicaragua and Uruguay), SMEs tend to be clustered  in the food industry.

The large proportion of SMEs operating in the food industry  reflects their tendency to specialize in labour-intensive sectors  with natural competitive advantages and small economies of scale. Because these activities are chiefly oriented toward domestic markets, direct exports are small.

Adding microenterprises as a policy focus has expanded the  universe of small players and made it more complex and diverse, encompassing both subsistence microenterprises and dynamic medium-sized enterprises that sometimes venture into the export markets. This diversity can be seen in the low relative productivity of smaller enterprises compared with large ones. While microenterprise productivity in the countries of Latin America is barely 3% of the level posted by larger enterprises, in advanced countries such as France smaller enterprises are 70% as productive as large companies (ECLAC, 2010, table III.7).

The productive environment in which SMEs operate  has also been made more complex as economies have become more open and international competition has  increased, alongside high prices for primary goods and heavy demand for imported products. In 2002-2008 the region’s exports rose at an annual rate of 1.5%, while the annual rise in imports was 15.5%, outpacing the rate for any other region and exceeding GDP growth as well.  These shifts in trade flows are closely linked to trade liberalization which has advanced with the signing of free trade agreements and the deepening of subregional 

trade integration schemes.

Such diverseness has made it very difficult to fashion relatively homogenous policies and apply them to such a varied group of agents. There is therefore a need for programmes, instruments and intervention modalities that take these differences into account.

This document was prepared by officers of the Division of Production, Productivity and Management, the Economic Development Division, the Social Development Division and the Special Studies Unit of the Economic Commission for Latin America and the Caribbean (ECLAC) and the ECLAC office in Washington, D.C.; staff members of the Department of Economic Development, Trade and Tourism, the Department of Sustainable Development, the Department of Social Development and the Trust for the Americas of the Organization of American States (OAS); and officers of the Integration and Trade Sector, the Inter-American Investment Corporation, the Multilateral Investment Fund and the Science and Technology Division, the Financial Markets Division, and the Meso-America Project of the Inter-American Development Bank (IDB). Work on the document was coordinated by the Division of Production, Productivity and Management of ECLAC with assistance from the ECLAC office in Washington, D.C. 

Innovating, Gaining Market Share and Fostering Social Inclusion Success Stories in the SME Development

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Logistics as a Competitiveness Factor for Small and Medium Enterprises in Latin America and the Caribbean

International trade has experienced substantial changes in the past decade. The opening of world markets, as reflected in the reduction of tariffs and the elimination of non=tariff barriers in the 1990s, has given rise to remarkable changes in trade activities. Nowadays, it is common practice for companies to source, manufacture, and market their products beyond their own country’s borders.

The logistics industry is one of utmost relevance and principally serves as a motor of private sector development and growth of the economic sectors of a country or region.A logistics industry that is efficient and accessible to everyone is a key element for companies in a country or region in general, and its small and medium sized enterprises (SMEs) in particular, to successfully compete in this new global context.

Despite improvements in Latin America and the Caribbean (LAC) in recent years, structural logistics problems persist, creating obstacles to exports for firms in the region, particularly SMEs.

This paper emphasizes the main challenges faced by the logistics industry and proposes interventions to address these challenges. Moreover, on the basis of case studies the region, the paper analyzes what measures can be taken by SMEs to improve their logistics capacity, thereby improving their export potential-

Carlos Kirby and Nicolau Bros.Inter-American Development Bank Capital Markets and  Financial Institutions Division DISCUSSION PAPER No. IDB-DP-191.November 2011

Logistics as a Competitiveness Factor for Small and Medium Enterprises in Latin America and the Caribbean

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IFC Helps Uzbekistan’s Financial Organizations Expand Lending, Supporting Entrepreneurs and Small Businesses

Tashkent, Uzbekistan, December 1, 2011. IFC, a member of the World Bank Group, is helping financial institutions in Uzbekistan to improve their credit underwriting practices, facilitating lending to entrepreneurs and businesses, especially the small and medium enterprises that drive the country’s economy. IFC, in partnership with SAIPRO Information Rating Agency, launched a two-day seminar on how banks can use automation, scoring, and credit bureaus in their loan operations. Industry experts, including representatives from Italy’s CRIF and Iceland’s CreditInfo Solutions, discussed best practices in credit information exchange. Over 80 participants from the financial industry attended the seminar.

“This initiative is an important next step following Uzbekistan’s new law on credit information exchange, which was adopted in October 2011 with IFC’s support,” said Ravshan Djuraev, General Director of SAIPRO. “The training will enable participating financial institutions to expand their financial services for small and medium enterprises, and individual clients, and help leading international credit bureaus who are interested in Uzbekistan’s market identify potential partners.”  This initiative is part of the IFC Azerbaijan-Central Asia Financial Markets Infrastructure Advisory Services Project, implemented in partnership with Switzerland’s State Secretariat for Economic Affairs, SECO. The IFC project is working to strengthen financial markets in the region by improving credit information systems, risk-management practices, and training, as well as by facilitating distressed loan resolution.

“Effective scoring and automation tools enable financial institutions to increase volume while decreasing expenses and non-performing loans,” said Fabrizio Fraboni of IFC’s Global Credit Bureau Program. “Adopting best international practice in credit underwriting helps banks to improve operational efficiency and enhance the quality of their loan portfolios.” Uzbekistan became a member of IFC in 1993. As of July 2011, IFC has committed $77 million of its own funds and mobilized an additional $12 million to support private sector development in Uzbekistan.

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit www.ifc.org

For more information about SECO, visit www.seco.admin.ch. In Tashkent:Tatyana Kraynova. +998 71 238 59 25. E-mail: tkraynova@ifc.org

 

For more information about Projects in Uzbekistan see Central Asia Projects

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New EU fundraising rules:boosting venture capital for SMEs and easing access to credit

European Commission. Press release.Brussels,07 December 2011. Access to finance is essential to enhance the competiveness and growth potential of SMEs. In the context of the current crisis, marked by a fall in lending to the real economy, it is increasingly difficult for such companies to access loans. For this reason the European Commission is presenting a strategy to promote better access to finance for SMEs with an EU Action Plan (see MEMO/11/879) which includes increasing financial support from the EU budget and the European Investment Bank and a proposal for a regulation setting uniform rules for the marketing of venture capital funds.

The new regulation will make it easier for venture capitalists to raise funds across Europe for the benefit of start-ups. The approach is simple: once a set of requirements is met, all qualifying fund managers can raise capital under the designation "European Venture Capital Fund" across the EU. No longer will they have to meet complicated requirements which are different in every Member State. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger.

In addition to the measures presented last week, including €1.4 billion of new financial guarantees under the Programme for the Competitiveness of Enterprises and SMEs (COSME (2014-2020) - IP/11/1476), the European Investment Bank will keep its SME loan activity at a sustained pace, close to the 2011 level of €10 billion.

European Commission Vice President Antonio Tajani, responsible for Industry and Entrepreneurship, said: “Easing access to finance for SMEs is priority number one to get out of the crisis. Our Action Plan underlines that Europe is doing its utmost to improve SMEs' access to finance. We aim to strengthen our EU financial instruments for SMEs and to improve their access to finance markets.”

Internal Market Commissioner Michel Barnier said: "We need more venture capital in Europe. By helping companies become more innovative and competitive, venture capital will create Europe's companies of the future. In order to support the most promising start-ups, venture capital funds must become bigger and more diversified in their investments. Today's proposals will help develop this emerging market."

SME Action plan

Europe's economic success depends largely on the growth of small- and medium- sized enterprises (SMEs) achieving their potential. SMEs contribute more than half of the total value added in the non-financial business economy and provided 80% of all new jobs in Europe in the past five years. The European Commission is presenting in an Action Plan the various policies that it is pursuing to make access to finance easier for Europe's 23 million SMEs and to provide a significant contribution to growth. Proposed regulatory and other measures aim at maintaining the flow of credit to SMEs and to improving their access to capital markets, by increasing the visibility to investors of SME markets and SME shares, and by reducing the regulatory and administrative burden.

Venture capital for SMEs

Venture capital, which provides early finance to start-ups, forms an important source of long-term investment to young and innovative small- and medium-sized enterprises (SMEs). However, small fund sizes and only being able to provide low levels of capital have prevented them from playing a more important role in start-up financing. As a result, SMEs continue to depend on short-term bank loans. But in the context of the current crisis, marked by a fall in lending to the real economy, it can be very difficult for such companies to access this type of loan.

Evidence examined by the Commission shows that a company with long-term venture capital investors is more successful than a company that needs to rely on short-term finance from banks. This is commonly attributed to the rigorous screening that a venture capital fund undertakes prior to investing in a company. But the average European venture capital fund is small and far beneath the optimal size necessary for a diversified investment strategy to make a meaningful capital contribution to individual companies and thereby produce real impact. While the average venture capital fund in the European Union contains approximately €60 million, a U.S. counterpart has a fund size of €130 million on average.1 Economic studies show that venture capital funds can make a real difference for the industries they invest in once their size reaches approximately €280 million.2 Furthermore, U.S. venture capital funds invested around €4 million on average in each company; whereas European funds could only muster investment volumes of €2 million on average per company. Early-stage capital investments in the U.S. were on average €2.2 million per company while early-stage capital contributions in the EU were on average €400 000 per company. 

Bigger venture capital funds mean more capital for individual companies and will give the funds the ability to specialise in particular sectors such as information technology, biotechnology or health care. This is turn should help SMEs have a more competitive edge in the global marketplace.

See also MEMO/11/879
More information: http://ec.europa.eu/enterprise/policies/finance/index_en.htm

Key elements of the proposal on venture capital:

The proposal lays down a uniform "single rule book" governing the marketing of funds under the designation "European Venture Capital Funds". A "European Venture Capital Fund" is defined by three essential requirements: 1. It invests 70% of the capital committed by its sponsors in SMEs; 2. it provides equity or quasi-equity finance to these SMEs (i.e. 'fresh capital'); and 3. it does not use leverage (i.e. the fund does not invest more capital than that committed by investors so is not indebted). All funds that operate under this designation must abide by uniform rules and quality standards (including disclosure standards to investors and operational requirements) when they raise funds across the EU. The "single rule book" will ensure investors know exactly what they get when they invest in European Venture Capital Funds.

The proposal creates a uniform approach for the categories of investors which are eligible to commit capital to a "European Venture Capital Fund". Eligible investors will be professional investors as defined in the 2004 Markets in Financial Instruments Directive (MiFID - see IP/04/546) and certain other traditional venture capital investors (such as high net-worth individuals or business angels). The uniform rules on venture capital investors will make sure that marketing can be tailor-made to the needs of these investor categories.

The Regulation will provide all managers of qualifying venture capital funds with a European marketing passport allowing access to eligible investors across the EU. This is a marked improvement over the existing rules in the area of asset management, in particular the 2011 Alternative Investment Fund Managers Directive (AIFMD - see MEMO/10/572) as the existing passport provided under AIFMD is only applicable to managers whose assets under management are above a threshold of €500 million. In addition, the rules of the AIFMD create a legal framework typically aimed at hedge funds and private equity firms, and are less suitable for the typical venture capital fund which would get a tailor-made regime.

Next steps:

The proposal on Venture Capital now passes to the European Parliament and the Council (Member States) for negotiation and adoption under the co-decision procedure.

See also MEMO/11/880.

Proposal for a Regulation on European Venture Capital Funds

The proposal sets out a new “European Venture Capital Fund” label and includes new measures to allow venture capitalists to market their funds across the EU and grow while using a single set of rules. Every fund using the label will have to prove that a high percentage of investments (70% of the capital received from investors) are spent in supporting young and innovative companies. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger. Bigger venture capital funds mean more capital for individual companies giving them the ability to specialise in particular sectors such as information technology, biotech or life-science. This is turn should help SMEs have a more competitive edge in the global marketplace.

Citizens’ summary

FAQs

Proposal of the Commission(Provisional version. The final text will be available soon)

Impact assessment:

• Full text(Provisional version. The final text will be available soon)
• Summary(Provisional version. The final text will be available soon)

More information:

http://ec.europa.eu/internal_market/investment/venture_capital_en.htm

Contacts :Chantal Hughes (+32 2 296 44 50)
Carlo Corazza (+32 2 295 17 52)
Carmel Dunne (+32 2 299 88 94)
Sara Tironi (32 2 299 0403)

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Eight year SBIR/STTR Reauthorization heads to House on the National Defense Authorization Bill

WASHINGTON.Dec 2011 – Following the Senate passage of the National Defense Authorization bill, Chair and Ranking Member of the Senate Committee on Small Business and Entrepreneurship Mary L. Landrieu, D-La. and Olympia Snowe, R-Maine, along with Committee Members, John Kerry, D-Mass., Scott Brown, R-Mass., Jeanne Shaheen, D-N.H., and Kelly Ayotte, R-N.H., made the following remarks in regard to Amendment #1115, reauthorizing the Small Business Research Innovation (SBIR) and Small Business Technology Transfer (STTR) programs for another eight years:

“We’ve won the battle, but we have more work to do to win the war,” Sen. Landrieu said. “The fight is not over; we must make sure our colleagues in the House do not strip this crucial legislation as with years past.

“You may think this bill will easily pass the House with bipartisan approval given the overwhelming bipartisan support in the Senate and from groups such as the National Small Business Association, the National Federation of Independent Businesses, the U.S Chamber of Commerce and BIO. The Senate version has the most support and we hope the House will join us in getting a long-term SBIR/STTR reauthorization across the finish line. However, I encourage everyone to call your member of the House and urge them to speak to their colleagues who will be involved in final negotiations before the National Defense bill is sent to the President. We must stress the importance of this legislation; we must make sure they understand the necessity of these programs to keep our nation on the forefront of defense technology and scientific innovation,” Sen. Landrieu concluded.

“The SBIR and STTR programs have been front and center in improving our nation’s capacity to innovate, and SBIR-backed firms have been responsible for roughly 25 percent of the nation’s most crucial innovations over the past decade, including countless technologies that make our nation’s military more efficient, effective, and safer,” said Senator Snowe. “Long-term reauthorization of these programs will provide certainty and stability so that our nation’s small businesses have undisturbed access to this critical seed funding. I thank my colleagues for including this critical amendment on the National Defense Authorization Act, and hope that the House and Senate can quickly achieve a compromise. We simply cannot squander this opportunity.”

“This is a vote of confidence for small businesses,” said Senator Kerry. “These programs have helped turn ideas into reality and everyone in America benefits from the resulting advances in medicine, cleaner energy sources and stronger economy. But our entrepreneurs can’t do it without resources, that’s why it makes sense to reauthorize these programs and keep America on the cutting edge of innovation.”

“After many years of negotiations and short-term extensions, I am proud that the Senate came together to pass legislation to boost small businesses and increase job growth. Our next challenge is to work with House members to preserve this long-term extension of SBIR in conference committee so the president can sign it into law. The SBIR program is of critical importance to Massachusetts and the country as we try to create an environment where small businesses can grow, take risks, and create jobs,” said Senator Brown, a member of the Senate Committee on Small Business.

“Getting this extension included in the defense authorization bill was an important step forward in securing a long-term extension for the Small Business Innovation Research program,” Shaheen said. “In order to continue to create jobs in America and ensure our economy remains competitive in the global marketplace, we must focus on entrepreneurship and innovation—which is exactly what this program supports. Long-term authorization of this program will provide participating agencies and companies the stability and predictability they need to take full advantage of this successful program.”

“SBIR provides tremendous opportunities to America’s small businesses, generating increased growth and supporting their innovative contributions to our national security,” said Senator Ayotte. “I’m pleased that the Senate has approved reauthorization of this important program.”

The SBIR and STTR programs are the largest federal research and development programs for small businesses. The programs allow small businesses to compete for a portion of federal research dollars in order to help the agencies meet their many missions from areas of health and environment to national defense and agriculture, and move the ideas from lab to market, whether for the government or commercial purposes.

The SBIR/STTR Reauthorization Amendment #1115 on the National Defense Authorization bill includes the following:

• Reauthorizes the programs for eight years;

• Increases the SBIR program allocation by one percent, from 2.5 to 3.5 percent, over 10 years, and increases the STTR program allocation from .3 percent to .6 percent over six years;

• Makes firms majority owned and controlled by multiple venture capital firms eligible for up to 25 percent of the SBIR funds at National Institutes of Health, National Science Foundation and Department of Energy and up to 15 percent of the funds at the other eight agencies. The authority is in effect for five years, as modified by Sen. McCain;

• Allows 3 percent of the SBIR allocation to go to administrative, oversight and processing costs if there is an allocation increase; and

• Increases the award guidelines for SBIR and STTR awards from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II, allowing for one sequential Phase II.

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House Passes Small Business Committee Bill To Address Regulatory Burdens

Washington, Dec 1. WASHINGTON, DC— House Small Business Committee Chairman Sam Graves (R-MO) today issued the following statement after the House passed the Regulatory Flexibility Improvements Act of 2011 (HR 527) by a vote of 263-159:

“According to an October Gallup poll, small business owners cited compliance with government regulations as the most important problem facing them today, and according to a 2010 Small Business Administration study, small firms bear a regulatory cost that is 36 percent higher than the cost of regulatory compliance for large businesses. Economic recovery begins with our small businesses but this will not happen unless we rein in the mass of regulations coming from Washington.

“The federal government has gone too far on many nonessential regulations that are harming small businesses. It is our responsibility to remove these barriers and make sure the government carefully considers regulatory consequences on our most robust job creators before finalizing them. That’s why our Committee brought the Regulatory Flexibility Improvements Act of 2011 to the floor for a vote. This bill will help small companies by forcing federal agencies to fully examine the impact of their proposed regulations on small businesses and consider less burdensome alternatives if those impacts are significant. I hope the Senate will put politics aside and take up this legislation, and the more than 20 other House-passed jobs bills, so that we can give small businesses the certainty and relief they need to help our economy grow.”

On February 8, 2011, Small Business Committee Chairman Sam Graves joined House Judiciary Chairman Lamar Smith (R-TX) to introduce the Regulatory Flexibility Improvements Act of 2011 (HR 527). The Small Business Committee held hearings on the Regulatory Flexibility Improvements Act of 2011 on March 30, 2011 and June 15, 2011 and marked up the bill on July 13, 2011.

CLICK HERE to view the video of today's floor debate and Chairman Graves' floor speech.s

Issues Facing Small Businesses in Combating Cyber Terrorism

Washington, Dec 1.WASHINGTON, D.C.— House Small Business Healthcare and Technology Subcommittee Chairman Renee Ellmers (R-NC) today held a subcommittee hearing to examine the issues faced by small businesses in combating cyber security threats, including the role of the federal government and best practice solutions. “For small businesses, a cyber attack can be catastrophic, leaving them paralyzed and unable to recover from the loss of their intellectual property and resources,” said Ellmers. “Unlike larger firms, most small companies cannot afford to purchase security software or hire staff to specifically monitor their security systems, leaving them as an easy target for cyber criminals. In fact, Symantec reports that 40 percent of all targeted cyber attacks were directed at small businesses. Statistics also show that nearly 60 percent of small businesses will close within six months after a cyber attack. Given the fact that small companies are our nation’s best job creators and economic drivers— this is greatly alarming.

“There is no one-size-fits-all solution for combating cyber attacks— it will take partnership from both the public and private sectors to protect against these threats. As Congress moves forward in considering legislation and modernizing cyber security laws, we must ensure that small companies are not burdened with more costly regulations. Congressman Mac Thornberry (R-TX) and our witnesses today provided great insight on what role the federal government should play in helping the private sector combat cyber terrorism, and I am confident this will lead to viable solutions.”

Fast Facts on Cyber Security:

• In 2010, the average annual cost of cyber attacks to small and medium-sized businesses was $188,242.

• The Office of the National Counterintelligence Executive released a report on October 11, 2011 stating that tens of billions of dollars in trade secrets, intellectual property, and technology are being stolen each year from computer systems in the federal government, corporations and academic institutions.

• U.S. Department of Justice recorded 303,809 cyber security related complaints in 2010. This is an increase of over 1700 percent from the year 2000 (16,838 reported complaints).

For additional hearing documents, click here.

Notable Witness Quotes:
U.S. Congressman William M. “Mac” Thornberry (R-TX), Chairman of the House Cybersecurity Task Force, said, “The first area the Task Force believes that Congress should act upon is to promote a series of incentives to help raise the level of cyber security generally and increase awareness. Estimates are that 85 percent of threats in cyberspace can be eliminated with proper cyber security “hygiene”… The second area is to address the more sophisticated attacks from large groups and state actors by increasing information sharing between the federal government and private businesses as well as getting companies to share more with each other.” 

David Beam, Senior Vice President of the North Carolina Electric Membership Corporation in Raleigh, NC, said, “The scope of any proposed legislation should be limited to those assets and systems which are realistic targets of a cyber threat and which could have significant impact on the security of the BPS. Casting too wide a net would bring entities like distribution co-ops and other small businesses under potentially very burdensome regulatory requirements with little or no benefit to grid security.”

Michael Kaiser, Executive Director of the National Cyber Security Alliance in Washington, DC, said, “[Our] data shows that we need to not only reach individual small businesses and help them build a better-defended environment, but also that the entire small business ecosystem is at risk… Cybercriminals know, as our data suggests, that small businesses are less defended and more vulnerable.”

Phyllis Schneck, Chief Technology Officer Public Sector at McAfee, Inc. in Reston, VA, said, “[T]here are two schools of thought on the government’s role in achieving a desired outcome: one that posits that regulatory mandates are the best way to incent good behavior (in this case, strong cyber security measures); and, alternatively, one that asserts that positive outcomes are best achieved via positive incentives… However, the heavily regulatory approach would not necessarily make organizations more secure- just more compliant. [P]ositive incentives have a higher probability of success…”

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Honduras.Financing small rural producers and business units of high value chains

The project will support FUNDER in expanding its working capital and investment financing to small enterprises on financial terms they can afford

IDB.HO-S1021: Financing small rural producers and business units of high value chains in Honduras

Unprecedented tool developed for small businesses to find and compare health insurance plans

U.S.Department of Health and Human Services.FOR IMMEDIATE RELEASE. November 18, 2011 A greatly expanded website to give small business owners an unprecedented detailed review of their health insurance plan choices was announced today by the U.S. Department of Health and Human Services.

Just in time for 2012, this powerful new tool allows small business owners to compare the benefits and costs of health plans and choose those that are best for their employees. For the first time ever, it will allow small businesses to research locally available products in an unbiased manner and foster a more transparent and competitive marketplace.

“This new information will help business owners navigate what has traditionally been a complicated and confusing decision,” said HHS Secretary Kathleen Sebelius. “Both owners and their employees can feel more confident that the plans offered will be the best to suit everyone’s needs.”

In addition to the market being difficult to analyze, small businesses do not fare as well large employers when negotiating health care prices, on average small businesses spend 18 percent more for the same health insurance coverage. This new tool brings needed transparency to the marketplace, which will help ensure insurance companies will compete for business on the basis of price and quality.

The tool is located on www.HealthCare.gov, which was created under requirements contained in the Affordable Care Act, the new health care law of 2010. The website is the first of its kind to bring information and links to health insurance plans to one place, and to make it easy for consumers to learn about and compare their insurance options. The Centers for Medicare & Medicaid Services worked to define and collect detailed benefits and premium rating information from insurers across the country to develop the site.

The new information added gives small business owners access to the following:

• Insurance product choices for a given ZIP code, sorted by out-of-pocket limits, average cost per enrollee, or other factors.
• A summary of cost and coverage for small group products that shows the available deductibles, range of co-pay options, included and excluded benefits, and benefits available for purchase at additional cost.
• The ability to filter product selection based on whether the plans are Health Savings Account eligible, have prescription drug, mental health, or maternity coverage, or allow for domestic partner or same sex coverage.

More than 530 insurers have provided information for more than 2,700 coverage plans across all states and the District of Columbia.

“Tens of thousands of small businesses from across America have already logged-on to www.HealthCare.gov to see what health coverage options are available to them,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight. “The new, unprecedented ability to search at this level of detail will bring the marketplace into better balance by giving insurance purchasers the power of information.”

In addition, the website provides extensive information about consumer rights, tips for how to navigate the market’s complexities, and details on how the Affordable Care Act provides new protections for beneficiaries.

To access the small business Insurance Finder, go to the home page of www.HealthCare.gov and click on the blue tab at the top of the page.

For more information, visit www.HealthCare.gov, or access the HHS Facebook page or Twitter account. To download a www.HealthCare.gov Insurance Finder widget visit www.HealthCare.gov/stay_connected.html.