Focus on boosting entrepreneurship at informal Competitiveness Council
European Commission - MEMO/12/582 19/07/2012
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Brussels, 19 July 2012
Focus on boosting entrepreneurship at informal Competitiveness Council
Entrepreneurship and Research and Innovation will be the focus of an informal meeting of EU Ministers of Competitiveness and Research to take place in Nicosia this Thursday and Friday. Ministers will discuss the role of entrepreneurship as an engine for economic growth, with particular reference to Small and Medium-Sized Enterprises. The meeting will be led by Cyprus Minister of Commerce, Industry and Tourism, Neoklis Sylikiotis, and attended by European Commission Vice President Antonio Tajani. Friday's meeting will focus on Research and Innovation issues. Cyprus Minister of Health Stavros Malas will chair and attendees will be research ministers of the EU and European Free Trade Area countries, as well as the EU's Commissioner for Research, Innovation and Sciences, Maire Geoghegan-Quinn.
European Commission Vice President Antonio Tajani, responsible for industry and entrepreneurship, will present ideas and proposals on following issues to promote entrepreneurship:
Female entrepreneurship probably the greatest unexploited source of economic growth
Female entrepreneurship is probably the greatest unexploited source of economic growth and job creation in Europe. Women currently only represent 34.4 % of self-employed workers in the EU, 20 % of self-employed workers in industry and 30 % of start-up owners. But an increase in female entrepreneurship has a direct effect on the growth of our economies. In 2008 in Sweden women managed more than 131,000 businesses, representing turnover of more than EUR 35 million, 358,000 employees and more than €6 million in salary payment; the equivalent of 19 % of employees and 33 % of SME turnover.
While European women are at least as well-educated as men, only a few decide to set up a company in the fifteen years following their graduation. Lack of take up can partly be explained by the difficulties in reconciling family and professional activities. The current business setup support systems are not always adapted to the specific needs of women. Concerns faced by potential female entrepreneurs include greater difficulty accessing financing and training, possible lack of confidence, and the following tendencies: to take calculated risks; to focus on creating companies in familiar areas and for which they can benefit from family support; to not take advantage of their networking opportunities and to only grow their businesses if their family situation allows them to work long hours with the certainty of success.
The Commission is currently working on a number of actions to overcome these issues. To promote awareness and motivation, a European network of female Entrepreneurial ambassadors and mentors aims to provide positive role models and support during the initial start-up phase. We also focus on access to finance and entrepreneurial training, child-minding services, maternity leave for self-employed female workers and the use of supportive, knowledge-sharing internet platforms. The Commission is also preparing an Action plan for entrepreneurship which will include new measures aimed to encourage female entrepreneurship in Europe.
Entrepreneurship education makes a difference for young people and for the economy
The development of a sense of initiative and entrepreneurship is a key skill recognised at EU level. Entrepreneurship is an individual’s ability to turn ideas into action; therefore it is also a universal competence. But Europeans are reluctant to take up opportunities for entrepreneurial activities. Only 45% of European citizens would like to be self-employed, while in the US 55% of the population would like to be their own boss, and 71% in China.
Research shows that entrepreneurship education makes a difference for young people and for the economy. Young people who went through entrepreneurial programmes display more entrepreneurial attitudes and intentions, get a job more easily, can innovate more and start more companies. Surveys conducted on students running a mini-company in secondary schools show that between 15% and 20% of participants will at one point start their own company. This figure is much higher for entrepreneurship education alumni than for the general population.
The acquisition of entrepreneurial attributes and skills will also enhance young peoples' employability. According to a recent study, young people who followed an entrepreneurship course at university find their first job more easily: 78 % of them started their first period of employment directly after graduation, against 59 % of a control group.
While more data about the effects and impact of entrepreneurship education are needed, available evidence calls for the importance of introducing as soon as possible entrepreneurship in the curricula of school and higher education in all EU Member States. Entrepreneurship education is being increasingly promoted in most European countries: so far eight countries have launched a specific strategy, while 13 others include it as part of their national lifelong learning, youth or growth strategies. However, there is still a long way to go to ensure that all young people have access to this type of programmes.
The Commission is working in close cooperation with national authorities to foster the entrepreneurial mindsets and skills of young people. Current efforts focus on the challenge of preparing and training teachers.
Innovation: Workplace innovation, design and boosting demand for innovations
The crucial role of innovation in creating a new generation of globally competitive industry and services and high-quality jobs in EU is clearly shown in various studies. The Commission would like to highlight three innovation policy tools that have a huge potential, but that are under-used in Europe; workplace innovation, design and boosting demand for innovations.
Workplace innovation is a concrete example of non-technological innovation. It boosts business productivity and improves their employees' wellbeing. This is achieved by developing the workforce's innovative capacity and by optimising production facilities. In Belgium, Finland and Netherlands, there are already many successful programmes that promote workplace innovation in SMEs and large companies. They make the best combinations of technologies and people. As a first step, the Commission will launch a learning network in December on workplace innovation. It is hoped this network will inspire companies to use workplace innovation and encourages knowledge sharing between policy makers to support SME workplace innovations.
We also need to promote design as a tool for innovation. Design is not merely a 'nice to have' for companies. Great design pushes up sales of products. Production design leads to greater resource efficiency. Our designers are Europe's unique selling point. There is great potential for improving use of design by SMEs, for promoting open design in enterprises and for using design to improve public services. For example, hospitals already use design lightning to create a peaceful environment in which patients recover sooner. But design can also be used to simplify the healthcare pathway of patients, for example in optimising breast cancer treatment.
Finally, we have invested a lot in research and development in Europe. We badly need these innovations to cut our energy bills, to improve quality of life and increase our labour productivity. But we need to ensure that demand is also in place. What incentives can be put in place for business, consumers and public sector to buy innovations? How can we use public procurement, standards and pro-innovation regulation to drive sales of European innovations?
In March, the European Council called for "putting demand-led innovation as a main driver of Europe's research and development policy”. In response, the Commission will announce an Action Plan to boost sales of European innovations in the global market in the Revised Industry Policy of September. This Action Plan should be based on our common understanding on what policies should be put in place.
Second chances for entrepreneurs
Second chances involve giving an opportunity to honest entrepreneurs to try again if their first attempt to create a successful business fails. A key aspect is simplified bankruptcy procedures.
It is essential for the EU to put in place an environment which helps entrepreneurs take risks and start new businesses. Failed entrepreneurs remain entrepreneurs, and are a precious resource. Due to experience gained by repeat entrepreneurs the failure rates of second start up attempts are lower than for initial efforts. We should therefore support entrepreneurs and give them a second chance.
A secondary and stronger reason to promote second chances is to avoid missing economic opportunities. Numerous potential entrepreneurs never create their own business for fear of the consequences of bankruptcy. As a result, each year thousands of enterprises fail to be created in the EU.
The EU must clearly confirm that bankruptcy does not impose a "life" sentence for entrepreneur's failed business efforts. A complete acquittal is without a doubt the most powerful tool to encourage second attempts. In the 2020 Entrepreneurial Action Plan the Commission asks Member States to reduce the duration of the "bankrupt" status for honest entrepreneurs to a maximum of two to three years, so that they can start afresh more quickly.