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Top-tech entrepreneurs present manifesto for start-up success

European Commission - IP/13/989   23/10/2013

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European Commission

Press release

Brussels, 23 October 2013

Top-tech entrepreneurs present manifesto for start-up success

Some of Europe's top tech entrepreneurs and startup community pioneers are today presenting EU leaders with their manifesto on how Europe needs to adapt for the digital age. This contains ideas for how decision makers – at every level in every country – can improve the climate for innovation and growth. On the eve of an EU Summit which focuses on completing the digital single market and digital economy, the Startup Europe Leaders Club (see IP/13/262), will present today their manifesto to Herman Van Rompuy, the President of the European Council, and discuss it in a round table with Mark Rutte, Prime Minister of the Netherlands and other national leaders and ambassadors.

The Startup Europe Manifesto has been drawn up by the 9 members of the Startup Leaders Club and draws on the combined experience of dozens of Europeans who have imagined, built and grown successful businesses. It contains 22 recommendations to the European Commission, EU Member States and EU companies in the fields of education and skills, access to talent, access to capital, data protection and thought leadership. For example:

  1. Companies and Member States should encourage university students to start a business before they graduate

  2. Member States and the European Commission could turn Europe into the easiest place for highly skilled talent to start a company and get a job by rolling out a pan-European Startup Visa

  3. That companies and EU governments should buy more from smaller businesses

  4. Asking the European Commission to remove the requirement for data providers to store information in any given country.

  5. Asking Member States Appoint a Chief Digital Officer for every country in the EU.

Taken together, the Leaders Club believe that the 22 recommendations will give European businesses the best chance of future success, all the same influencing and powering the growth in the EU.

Neelie Kroes, Vice-President of the European Commission for the Digital Agenda said "I think these are excellent ideas. We need to give a voice to the entrepreneurs of Europe. I hope that all European leaders will take their suggestions to heart so that we can change mentalities about startups, entrepreneurs and global leadership."

In March 2013, Neelie Kroes invited the Leaders Club to develop a manifesto for economic growth. This was formally presented to the Vice President at the Startup Europe Forum in London in early September 2013. (SPEECH/13/668) Over the last six weeks, the manifesto has been endorsed by more than 5000 people including entrepreneurs, bloggers, and journalists who care about the EU startup scene

Background

The Startup Europe Leaders Club is an independent group of founders in the field of tech entrepreneurship, who act as role models for European web entrepreneurs and provide guidance to the Commission on how to strengthen the environment for web entrepreneurs to start in Europe and stay in Europe.

Its members are:

  1. Zaryn Denzel, (@Zaryn) founder of Tuenti, Spain's largest social network & mobile multiplatform

  2. Daniel Ek (@eldsjal) and Martin Lorentzon (@MartinLorentzon) – founders of online music streaming service Spotify

  3. Kaj Hed (@RovioHQ) – Chairman of Rovio (Angry Birds)

  4. Lars Hinrichs (@LarsHinrichs) – founder and CEO of HackFwd, a pre-seed investment company

  5. Joanna Shields (@TechCityUK) CEO and Chair of Tech City Investment Organisation

  6. Reshma Sohoni (@rsohoni) – partner of SeedCamp, a catalyst for Europe's next generation of entrepreneurs

  7. Boris Veldhuijzen van Zanten (@Boris) entrepreneur - founder of The Next Web

  8. Niklas Zennström (@atomicoventures) – co-founder of Skype, Kazaa, Joltid and Joost and Atomico

The Leaders Club is just one element of Startup Europe the Commission's plan to promote ICT and enable web entrepreneurs to start their business in Europe and to let them flourish in Europe

Useful Links

Startup Europe Manifesto

Startup Europe Leaders Club

Startup Europe

@StartUpEU

Hashtags: #startupmanifesto, #startupeurope

Neelie Kroes Follow Neelie on Twitter

Contacts

Email: comm-kroes@ec.europa.eu Tel: +32.229.57361 Twitter: @RyanHeathEU

ANNEX 1

Startup Manifesto Recommendations

Recommendation

Explanation

For who?

  • Skills and Education

  • Make teachers digitally confident and competent to rise to the challenge.

No longer confined to computers or telecommunications, digital technologies now underline every aspect of our lives, from history research to art education to advanced mathematics, geography studies and more. Our children are born into a digital world in a way their teachers weren’t. If we want the next generation to use digital technologies to build a better world, we need to ensure the individuals responsible for guiding and instructing them are as comfortable and capable using such digital technologies themselves.

Member States

  • Teach our children the principles, processes and the passion for entrepreneurship from a young age.

If we want our younger generation to start their own business we need to teach them how to do so. We need to excite them and instil in them the passion (and pride) to do so. We can’t expect every 12 year old to start their own company. But every 12 year old should know what it means to take an idea, validate it and make something they can offer to other people as a product or a service. The tools and the knowledge are all out there. We just need to make sure the passion is present

Member States

  • Encourage university students to start a business before they graduate

In the US many students start their business before they even graduate — 20% of the students at CalTech, Stanford and Berkeley. This gives students a taste of what it’s like to start and operate a business while remaining in a structured supportive environment that acts as a ‘safety net’ in case their plans fail. By the time most students leave university their willingness to take risks drops dramatically, and with it the likelihood that they’ll start or join a startup. Universities should create more entrepreneurship courses and set up a network of Student Entrepreneurship Centres / Incubators (through partnerships if needed) that can provide students with support and funding to translate their ideas into reality.

Member States

  • Prepare graduates for a radically different marketplace.

The skills required for thriving in today’s job market are very different from what they were even a decade ago, yet most universities have done little to change their curriculum or provide graduates with new tools and skills. In the short term (12- 24 months), EU countries should offer a ‘digital certificate course’ that will help graduates acquire the basic digital skills to make them more valuable to prospective employers. In the medium term (2-3 years) EU countries should ensure their universities add digital components to most of the subjects they teach. Greater consideration and structured support should also be provided to university students in finding part-time work experience, summer jobs and internships to supplement their academic qualifications. This will provide valuable experience of the workplace, enabling them to develop transferable skills and enhance their employability.

Member States

  • Encourage large companies to provide training for the general public.

While the skills shortage spotlight is focused on computer science and technology, companies aren’t built by programmers alone. There is an equal, if not greater shortage of management and communications skills across the EU. To build and grow a business, entrepreneurs need experienced managers, salespeople, HR managers, and other professionals who can help them to scale their businesses. Large corporations have become extremely adept at providing these skills and should be encouraged to open their training programs and facilities to greater numbers of people. Those who benefit from such training should then be encouraged to join rather than found startups (which the corporates might even fund). Companies can help much more effectively than the government can, because they own the environment in which people can learn how to manage by doing.

Companies

2. Access to Talent

  • Turn Europe into the easiest place for highly skilled talent to start a company and get a job by rolling out a pan-European Startup Visa.

This visa will make it easier for non-EU entrepreneurs to start a business in Europe and make it easier for EU companies to hire non-EUtalent to join their startup.

Member States and European Commission

  • Make it easy for companies to hire outside their home countries.

Europe has done much to make the labour market fluid – any European can now work in any other European country. But the hiring market — a company’s ability to hire and employ in an EU country outside their own – remains complex and expensive. This form of remote employment, where a company hires one or more people outside of their home market is set to increase. We need to make it simpler to hire people without setting up a local subsidiary.

Member State and European Commission

  • Make it easier for companies to let employees go

Businesses’ needs change. Market demand ebbs and flows. Employees don’t always fulfil their potential or deliver what is required of them. For European businesses to become truly competitive, we need to make it easier for them to let employees go and manage out and fire under- performers. For many businesses around the world considering starting a new office in the EU, a key constraint will be their hesitation of being left with a workforce that cannot be adapted to the realities of today’s and tomorrow’s markets

Member States

  • Bring the best brains back home

Virtually every country in the EU has watched helplessly as some of its best and brightest mindsleave for the US. This ‘brain drain’ has made a negative impact on all aspects of our economies, creating a vacuum in thought leadership, advanced research and basic academia, to name a few. EU countries must launch targeted campaigns aimed at bringing their talent back home, through research grants, logistical support and public recognition.

Member States

3. Access to Capital

  • Increase private and institutional investment in startups.

Offer a range of tax reliefs to investors who purchase new shares in high-risk companies, such as those introduced by the UK’s Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). At the moment, many European startups need to pursue funding outside of their own country (and often outside of Europe). When funding is raised successfully the team is in most cases required to move to the country where the funds come from. This means a talent drain in the short period and also capital loss in the mid-long term. In addition, steps should be taken to encourage business builders to recycle the wealth they have generated in growing successful companies into investments in the entrepreneurial success stories of tomorrow. Multiple options exist, ranging from following the Israeli example of allowing angel investors to recognise their startup investments as losses in the year of the investment effectively providing a tax break for those who have capital gains in other businesses/startups; through to allowing investors to offset wealth tax if they invest in a small EU company.

Companies and Member States

  • Make it easier for high-growth companies to raise capital through public markets.

Make such markets a more accessible and attractive source of capital for these businesses, similar to the London Stock Exchange’s High Growth Segment. In addition, given their relative contribution to the economy, we recommend the creation of a fully-fledged Internet and Mobile category in EU stock markets, reducing the incentive for successful European companies to go public in the US, throwing the spotlight on the sector’s profitability and helping counteract any investor reticence

Member states and European Commission

  • Buy more from smaller businesses.

Government subsidies are one way to help SMEs flourish. The other is ensuring the government itself procures more from these companies. Across the EU, the vast majority of government procurement contracts are filled by large, often multinational businesses. For many entrepreneurs, selling to the government is all but impossible — navigating the procurement process is complex and existing suppliers have become so entrenched that unseating them discourages many entrepreneurs from even trying. If EU governments want to kick start the engines of growth in their countries, they must commit to shifting a certain percentage of their procurement contracts to smaller firms.

Companies and Member States

  • Institute an E-Corp: a new type of cross- European corporation.

Setting up a company in each country in the EU presents its own set of barriers. Requirements that once made sense, from the minimum amount of money required to launch a business to not having access to shares to complex legal requirements for even the smallest business now simply impede on our ability to build new businesses. We recommend the creation of a new type of corporation — the E-Corp that has unified requirements across the EU and can be done by anyone in under 24 hours. This would simplify not only the creation of new businesses but make it easy for cross-border investments to flow from investors in one country to companies in another.

Member States and European Commission

  • Tax share options as capital gains, not income.

In Europe, individuals who receive share options in a company often have to pay ordinary income tax on these options, reducing their attractiveness as a mechanism for both attracting talent and rewarding risk-taking. We recommend that share options offered by companies in Europe be taxed as capital gains, not ordinary income.

Commission and Member States

4. Data Policy, Protection & Privacy

  • Revise and normalise data protection laws.

The lack of a unified data protection law in Europe erects unnecessary obstacles for companies wanting to transact with and across the region. This is partially why only 12 per cent of all internet transactions made by European consumers are transnational. As a whole, Europe’s laws are far more restrictive than the US, putting US companies and the US in general at an advantage on what otherwise should be a level playing field. We call for the adoption of a new EU data protection law by all EU countries.

European Commission

  • Remove the requirement for data providers to store information in any given country.

With so much information and so many systems moving from local server facilities to the Cloud, requiring companies doing business in an EU country to also keep their servers in the same country is an antiquated approach that heightens costs, increases barriers to free trade and reduces resilience

European Commission

  • Make government data public

The irony of public data in the EU is that so little of it is actually public. From transportation to treasury to tender information, opening up government data can increase transparency and trust, while increasing citizen engagement, empowerment and equality. In addition, unlocking public data from its shackles allows innovative companies to introduce new products and services that can further reduce the dependence on central government and create new businesses at the same time.

Member States

  • Make governments think digitally.

To stay relevant and effective at a time of decreasing budgets and public support, governments must use ‘digital thinking’ to reduce costs while improving the services provided to citizens. Governmental departments should operate on a single technology platform, following the same technology principles that are as good, if not better than the other platforms its citizens now interact with on a daily basis.

European Commission and Member States

5. Thought Leadership

  • Initiate a mentality shift across Europe in terms of how we define success.

Our cultures celebrate celebrities and athletes, musicians and actors. Entrepreneurs who make a real impact on peoples’ livelihoods need to be celebrated too. We need everyone to get excited about innovation and entrepreneurship, not just techies. This means promoting the path of entrepreneurship as a credible career alternative and celebrating successful business builders as heroes. It also means democratising the tools and processes of starting new businesses and offering them to anyone with the courage and willingness to start one.

Companies, Governments and European Commission

  • Appoint a Chief Digital Officer for every country in the EU.

The impact of appointing a Digital Champion by each Member State to help them promote the benefits of an inclusive digital society is already being felt — but we need to do more. Permanent, full-time CDOs will help to ensure digital innovation makes an impact on every industry and opens up the government to more transparency and more collaboration with its constituents.

Member States and European Commission

  • Create a ‘best practices’ repository

Provide a resource where local and national governments can share the best ‘hacks’ they found to achieve immediate impact.

European Commission and Member States

  • Establish a Digital European Forum.

Bring together leading entrepreneurs, politicians and policy makers for the purposes of establishing a common understanding and common set of goals in translating this manifesto into

European Commission and Member States


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