More entrepreneurs are needed to boost growth and employment, the European Commission said yesterday (9 January) in unveiling an action plan to "revolutionise entrepreneurial culture in Europe".
The Entrepreneurship 2020 Act, launched by the Commissioner for industry and entrepreneurship Antonio Tajani, stresses the role of education and training to nurture new generations of entrepreneurs.
Measures to help entrepreneurs will target specific societal groups, such as young people, women, seniors, migrants and the unemployed.
Tajani said the Commission seeks to make entrepreneurship "an attractive and accessible prospect" for Europeans.
"Above all we are talking about getting across a strong political message on the part of the EU Commission. As part of the re-launch of the industrial policy we want to focus on entrepreneurs, come up with new ideas and new ways of looking at entrepreneurship," Tajani said at a news conference.
The Commission's communication aims to improve access to finance, reduce bureaucracy, and encourage second chances for bankruptcies that occur due to late payments.
"We have tried to come up with a proposal to remove obstacles to allow our economy to grow and therefore to effectively fight the crisis," the Italian commissioner said.
Getting more people interested in becoming entrepreneurs shouldn't be the biggest obstacle. Almost four out of 10 Europeans would like to be their own boss if they could, according to a Eurobarometer survey.
If this potential were realised, the Commission believes that millions of new businesses could be added to the almost 21 million small and medium-sized enterprises in the EU.
Better access to finance
However, access to finance continues to be one of the most significant constraints for entrepreneurs, especially in the early stages of their businesses.
The Commission wants to back programmes aimed at developing a market for microfinance, and make resources for microfinancing available to member states and regions.
Through the development of an EU regime for venues specialised in the trading of share and bonds issued by SMEs, the Commission also wants to facilitate a direct access for SMEs to the capital market.
"There will be direct access for SMEs to capital markets for shares and bonds which are directly aimed at SMEs so that they have access to a market of financial instruments. We are not talking about local exchanges for SMEs, but a step in that direction with what we can call mini-shares and mini-bonds," Tajani told reporters.
The 27 EU states are urged to amend national legislation to facilitate new alternative forms of financing for start-ups. They are also invited to make use of EU structural funds to set up microfinance support schemes.
Tajani said he hopes that in the next EU budget (2014-2020), there will be €80 billion for innovation and research and €2.4 billion from the Competitiveness of Enterprises and SMEs project for SMEs to utilise money.
Entrepreneurial education for students
Tajani stressed that the EU also wants in particular lessons of entrepreneurship introduced in schools in all countries.
The Commission is currently working with the Organisation for Economic Co-Operation and Development on guidelines so that lessons and training on entrepreneurship can be introduced in universities and how students can get work experience in companies.
Studies have shown that between 15% and 20% of students who participate in a mini-company programme in secondary school will later start their own company. This figure is about three to five times of that of the general population.
“Too many Europeans are reluctant entrepreneurs, not through some genetic characteristic, but because they have been conditioned to aspire to a ‘safe’ employment position,” said Arnaldo Abruzzini, secretary-general of EuroChambres.
“The Commission is right to emphasise that national education systems must promote entrepreneurship as an appealing and viable alternative and prepare young people to take this career route.”
Enterprise Policy Director Luc Hendrickx at UEAPME, the European craft and SME employers’ organisation, said:
"The action plan unveiled today by the Commission has to potential to put entrepreneurship back at the top of the agenda and must be implemented as soon as possible. Faced with the crisis, policymakers have realised the importance of a thriving private sector and of removing unnecessary burdens. Europe will not recover without more entrepreneurs.
"Today’s plan covers many key priorities in this respect. It is a loud call to action towards member states, which must do more on several issues, starting with more modern labour markets. Other chapters are also spot on, for instance on business transfers and on the importance of entrepreneurial learning, not only for prospective entrepreneurs but for all young people. Continuous training is another key aspect, as it is a precondition for all successful entrepreneurial activities,” Hendrickx added.
Anna Darmanin, vice president of the European Economic and Social Committee, said in a recent op-ed:
"Despite the economic malaise that has gripped both Europe and the world in recent years, it could be argued that there has never been a better time in history to be an entrepreneur and start a company.
"The web makes it possible, with virtually no infrastructure, for products or services to gain immediate access to international markets. The tools that large corporations used to pay large sums to develop - such as internal communications, supply chain management and relationship management software - can now be obtained from web- based providers from as little as some €15 per month."
“In this globalised world where adaptation and creativity are vital to the survival of businesses, ACCA fully supports the European Commission’s call on member states to create the right supportive environment to enable the millions of Europeans willing to start a business to do so,” Rosana Mirkovic, head of SMEs policy at the Association of Chartered Certified Accountants (ACCA) said.
“We acknowledge, however, that this will require a real cultural change in the mentality of EU decision-makers and citizens, accompanied by solid concrete bold measures. It is surprising to see that whilst only 11% of European citizens are entrepreneurs, 45% aspire to be their own boss. The EU lags behind its competitors in entrepreneurial attitudes,” Mirkovic concluded.
The President of the European Small Business Alliance (ESBA) David Caro said:
"The Entrepreneurship Action Plan reflects many of today's obstacles to business, as signalled by the industry. A return to a prosperous European economy can only be achieved if we succeed in creating a true entrepreneurial culture in Europe. Too often brilliant and viable plans are not materialised due to a lack of knowledge, sub-standard support mechanisms and a harsh insolvency regime, which curbs healthy entrepreneurial risk-taking. To foster Innovation and job creation, we need to cherish our entrepreneurs."
Since 2008 Europe has been suffering the effects of the most severe economic crisis it has seen in 50 years: For the first time in Europe there are over 25 million unemployed.
New companies, especially smaller firms, represent the most important source of new employment: they create more than 4 million new jobs every year in Europe, according to the European Commission.
- Press release: Unleashing Europe's entrepreneurial potential to bring back growth
- Press release: Entrepreneurship as a main driver for economic growth
- Eurobarometer: 37% of Europeans would like to be their own boss
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