The European Commission will ask the Parliament to earmark a substantially increased budget for the fledgling Erasmus for Young Entrepreneurs programme by the end of 2011, with officials suggesting that a "tenfold" expansion of the scheme would be needed to help it boost cross-border entrepreneurship.
A meeting in Brussels, hosted by the Commission, revealed a range of teething problems but reinforced the EU executive's commitment to pushing for additional funds.
The pilot initiative currently has a budget of €5 million per year and has completed 80 exchanges since its launch in February 2009. An independent review said it is helping to create sustainable new businesses but would need significantly more resources to have a long-lasting impact.
Advocates of the project, which piggybacks on the success of the Erasmus student exchange programme, believe up to 10,000 would-be entrepreneurs could eventually take part in the programme every year.
However, the pilot scheme already faces considerable difficulties in finding established entrepreneurs to give their time and resources to mentoring people with new business ideas.
The project also relies heavily on business organisations in member states to help match young people with host entrepreneurs. These intermediaries have also complained that the level of support on offer is unsustainable.
A survey of participants revealed broad satisfaction among new entrepreneurs benefiting from the programme, although it remains too early to tell whether the legacy of these exchange visits will be new cross-border business ventures.
Exchange programme faces marketing problem
While the small number of businesspeople who have availed of the project have usually gone on to start their own business, critics said Erasmus for Young Entrepreneurs has a "marketing problem".
Some countries – notably Spain and Italy – managed to attract vastly more applications than others, suggesting that most member states failed to get the message across to young people with business ideas.
The programme builds on the established 'Erasmus' brand, which instantly helps with indicating that its focus is on mobility – but this association has a downside. Business groups worry that the business community will think the scheme is merely an extension of the student exchange initiative.
Several stakeholders want to see the name changed, at least to remove the word 'young' from the title, as this could be off-putting for first-time entrepreneurs who already have some real-world work experience.
Other criticisms of the pilot phase raised by participants and intermediary organisations included the degree of overlap with existing EU and other mentoring schemes, and the awkward question of whether most of the companies founded by participants would have been launched anyway.