Can Europe become an entrepreneurial society?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Entrepreneurial capability is not confined to business; it is just as important for non-profits, for health, education and even for public services. Hence, we need to form and educate entrepreneurs, and we must cultivate a deep and systematic understanding of the discipline of entrepreneurship, says Dr Richard Straub.

Dr Richard Straub is director of EU Affairs and Corporate Services at EFMD (European Foundation for Management Development).

"In his landmark book Innovation and Entrepreneurship, published in 1985, Peter Drucker described the tectonic shift that he perceived in its early stages – the move from an employee society toward an entrepreneurial society.

This shift was, and still is, being driven by unstoppable forces such as changing demographics and ever-hastening advances in information and communication technology.

As Drucker lays out what this new society should look like, he builds upon another great thinker of Austrian origin, Joseph Schumpeter, who had positioned the entrepreneur at the heart of capitalism – as the life force of a market-based, competitive, dynamic and wealth-creating economy.

The question for Europe is: Has this sea change happened? Have we seen enough “creative destruction” to meet Drucker’s vision? Have we seen enough new companies and industries emerging from Europe during the past 50 years and taking leading positions in global markets?

Regrettably the answer is a resounding “no.”

With an overblown social protection system and a state that has become in a number of countries obese and suffocating, it has become more difficult for entrepreneurs to develop and sustain their businesses.

France provides a sad example of a nation that adheres to an anti-business and anti-entrepreneurship attitude, with a president who does not like those who were successful and hence may have made some money; “les riches” are despised and insulted by media and large parts of the public.

In a recent seminar for the Board of the European Institute of Technology and Innovation – the first broad-based entrepreneurial venture to receive seed funding by the European Commission – the challenges for an entrepreneurial Europe were laid on the table.

Broad consensus appears to have emerged that the way beyond the current financial crisis will not be achievable only with austerity.

Something positive and constructive is needed. And this is where entrepreneurial attitudes and capabilities come in, be it starting up new businesses, “intrapreneurship” in large organisations, new ways of independent working such as freelancing and contract work- in short everything where individuals take responsibility for their lives and pursue opportunities to create value.

In order to move toward a new paradigm where entrepreneurs are appreciated, celebrated and supported two major areas must be addressed.

First, man-made obstacles for entrepreneurial action must be eliminated. Among them: crippling tax regimes, rigid labour markets, absurd laws where bankruptcy is treated as a criminal offence of sorts, excessive red tape and lack of access to finance, again due to mistrust in risk-taking.

Interestingly enough, the Eastern part of Europe seems to be showing the way in the right direction while the Western European countries appear to be trapped in the anti-entrepreneurship and anti-business cultures.

Remember former US Defence Secretary Donald Rumsfeld talking about “old” and “new” Europe?

It’s important to note that entrepreneurialism does not mean abandoning social security. Rather, it requires finding better and more targeted ways to support and protect those who are truly in need.

The other fundamental area of change that’s required lies in the field of capacity building. While there may be quite a number of born entrepreneurs, Drucker rightly observed that there are just not enough of them.

This is all the more true given that the need for entrepreneurial capabilities is not confined to business; it is just as important for non-profits, for health, education and even for public services. Hence, we need to form and educate entrepreneurs, and we must cultivate a deep and systematic understanding of the discipline of entrepreneurship.

As a discipline, entrepreneurship must be taught in the classroom as well as learned from experience and enhanced constantly by research. Colleges and universities – and high schools, too – should make the study of management and entrepreneurship mandatory, and not only for those interested in pursuing careers in business.

Dan Shechtman, who won the Nobel Prize in Chemistry in 2011, has been a teacher for technology entrepreneurship over the past 25 years.

Like others who studied at Israel’s Technion (Dan received his doctorate in materials engineering from there in 1972), he was exposed throughout his education to a strong entrepreneurial spirit- one of the keys, undoubtedly, to Israel’s innovation miracle.

We have lost too many good years to make our European societies future-proof; unfortunately, more pain is on the way. But it is still not too late. We require lighthouses and role models.

The EIT, with its focus on the Knowledge Triangle (Education, Research and Business), seems to be a step in the right direction.

The huge challenge for European Governments and policymakers at all levels is to “get it.” One of the most important tasks is to enable entrepreneurship as a foundation for innovation, growth and as a consequence for employment.

This is the time to stand for values and principles that may not have the majority in the opinion poll of the day. Are our politicians ready for that?"

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