An EU-wide startup visa should make it easier for entrepreneurs to set up businesses and hire talented employees, writes Lenard Koschwitz.
Lenard Koschwitz is director of European affairs at Allied for Startups.
Europe needs to do more to attract talented people and the growth of boost startups. Right now, Europe is bleeding talent, but governments can reverse that trend.
The European Commission will propose changes to the blue card visa for highly-skilled workers tomorrow (7 June). Let’s hope the executive listens to what member states called for at the Competitiveness Council last month: to “boost cross-border expansion of startups and EU’s attractiveness for innovators”.
“Reviens Leon” is a campaign to bring back French talent that left the country. The Eurozone loses nearly 120,000 post-secondary educated workers each year to jobs elsewhere. As a result, more EU countries are trying to attract high-potential entrepreneurs to start businesses in Europe.
This is a huge opportunity if we get it right because the more startups we have in Europe the more innovation, jobs and growth will follow. Outside of the zone we see huge growth in places like India, where there are around 2.75 million software developers now and 5.2 million by 2018.
A healthy mix of market, talent, density, culture, capital and an attractive regulatory environment will ultimately be the recipe for success in Europe. An EU-wide startup visa should attract the best and brightest to start building their businesses in Europe. Here’s some pro-innovation advice for startup-loving policymakers.
- Increase attractiveness for the entire European economy
A good startup visa will never ‘attract’ huge numbers of high potential entrepreneurs, but a bad one (or no visa at all) will certainly deter them. Of the eight existing startup visa programmes in EU countries, most fall short of their goals. Ireland, for example, has a great ecosystem for entrepreneurs, but received only 50 applications in three years.
Looking at the EU as a whole–the digital single market promises a harmonised market of 510 million people–the rules to obtain a visa should be all the same across the whole EU.
- Entrepreneur-focused public-private collaboration
How should administrations decide whether an entrepreneur has potential to succeed or a company is actually a “startup” at all? The answer is easy: they shouldn’t.
Ideally, approving a visa should be a business-driven decision to back and invest in projects and governments ensure that public order and security are not endangered. The French tech ticket is a great example: 50 entrepreneurs are chosen by 10 incubators based on their regular business models. The public administration makes sure that entrepreneurs have both the means and necessary insurance for their stay and don’t pose a risk to public security.
- Giving room to innovators so good things can happen
Some national programmes, like the Spanish entrepreneurial support and internationalisation act from 2013, try to channel innovation toward specific sectors and industries. But changing directions and even sectors is part of the startup DNA! Startups are mobile and often go through transformations until they find the right product to market. Famous examples like Youtube, Yelp, Twitter and Flickr underline how changing direction can lead to success.
To avoid policies that deter innovation from the outset a European visa should not be limited to certain sectors. But a visa programme should identify real innovation and high-growth potential.
- Easy and fast-tracked procedures
High-potential entrepreneurs and talented individuals pick the EU because of the right mix of market size, capital, culture, talent, density and regulatory environment. So policymakers have to be reminded that it’s not the visa that is attractive but the ecosystem. The ideal visa for high-tech and high-growth entrepreneurs is one they obtain with little friction. Or at least without delaying the creation of their business.
In the Netherlands, for example, the application process can go on while an entrepreneur is already in the country. This is great but not necessary if applications are processed in a timely fashion. Spain and Slovakia manage it in 10 days on average while France and Denmark drag the process on for 10 weeks or more.
- Embracing Failure for everyone’s benefit
In contrast with other visa holders, it is hard to say whether a startup will succeed. But regardless of the economic success of a startup, the process of building a company positively affects not only the founder but also the entire surrounding economy. Fifty percent of all Silicon Valley startups have at least one immigrant as a key founder, which contributes substantially to the cultural diversity, openness and creativity of the ecosystem. In the EU only 10% of founders are migrants and just three out of 10 startup employees come from a different country than where the startup is located.
Looking across the board at existing schemes, a healthy timeframe for a visa is at least two years with an easy possibility for renewal. In the Netherlands, a continued endorsement by the initial facilitator is enough. In other countries founders have to demonstrate the growth and development of their startups, sometimes including the ability to create jobs.
- Thinking about the next step
A visa for founders is a great first step to achieving the digital vision for Europe. The bigger part of this vision is allowing scaling companies to stay in Europe. Spotify warned the Swedish government it might leave the country because of inflexible rules. Salaries and housing show how much governments can do to keep successful companies. In the UK, where around 40 % of the EU’s scale-ups are located, companies cannot take on new clients because they lack talented employees. The European app economy alone will create four million jobs between 2014 and 2018.
Europe should not only introduce rules for people who plan to create startups, but should also ease migration for anyone working at one of the European tech companies. The same should happen for investors, so money can go where the startup is instead of the other way around.