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Member of the European Commission responsible for Enterprise and the Information Society
Entrepreneurship in the e-Economy
European Forum on Entrepreneurship for the Future
Växjö, Sweden, 19-20 March 2001
Minister, Ladies and Gentlemen,
I must begin by thanking the Swedish authorities for organising this Forum, with its stimulating programme which has brought together some of Europe's best expertise on the issues before us.
The region of Småland has long been known as one of Sweden's most entrepreneurial areas and it is appropriate that we should be addressing the question of Entrepreneurship for the Future here.
Ladies and Gentlemen, our purpose at this Forum is to examine some important features of the emerging 'knowledge' economy and to see how public authorities can react, in terms both of broad policy and practical detail. Our aim is to achieve a clear insight into what it means to promote Entrepreneurship for the Future.
To achieve this aim, we have to start from a clear understanding of where we are with the 'knowledge' economy.
1) Economic prospects in the 'knowledge economy'
The discussion of the so called 'new' economy has received a lot of attention. Only a year ago, much of the coverage was of the exaggerated prospects and the extravagant life-style of the latest dot.com company. Now, in some quarters after the inevitable stock market corrections, the exaggeration is in the opposite direction and the story is all doom and gloom.
Here we must take a more balanced view of how the economy is developing and how new features are contributing to this development. We can afford to be confident, but we must also act decisively in order to seize the opportunities that are available to us.
In developing this theme, I should like first to comment on 1) the nature of the challenges we face and the general approach that has been agreed under the new 2) Multi-annual Programme for Enterprise and Entrepreneurship (2001-2005). 3) I shall then return to the issues that are the particular concern of this Forum.
In terms of the general environment, the European economy continues to show some of the most encouraging signs for a generation:
Next year, the euro - as a circulating currency in 12 countries of the EU - will bring greater transparency to markets across Europe and a further impulse for greater efficiency.
This favourable macro-economic situation has been created by a lot of effort by the European institutions and the Member States. It is an achievement of which we should be proud. But we cannot stop there. Now we need to make further progress on the detail. We need to bring about a parallel transformation of the micro-economy.
2) The Transformation of the Micro-economy
A year ago, the Lisbon European Council set us the goal of becoming " the most competitive and dynamic knowledge-based economy in the world" during the course of this decade. To achieve this it laid emphasis on preparing the transition to a knowledge-based economy and society by better policies for the information society and R&D, structural reform for competitiveness and innovation and by completing the internal market.
Since then, most recently at the informal ministerial meeting in Manchester, the message from Lisbon has been elaborated and emphasis placed on:
We expect that the Stockholm European Council will continue to develop and refine this strategy.
Our primary concern here is developing the framework for enterprise by gaining a good understanding of how to support those enterprises that are active in the knowledge economy. So, how is this to be done ?
The European Commission has responded to the challenge of Lisbon.
These 'Best Procedure' projects, as they are known, address areas where improvements can be made, principally by learning from existing good practice. They include:
This particular Forum is intended to make a distinctive contribution to the Best Procedure project on business support services. It will help identify good practice for those who are responsible for providing the modern and efficient business support services that will help the launch and subsequent growth of 'knowledge economy' enterprises.
To this extent, the Forum will be contributing to the creation of the 'top-class business support services' that is one of the objectives of the Charter for Small Enterprises, endorsed at the Feira European Council.
This is part of a continuing process that began in 1998 and that has already identified much good practice in the provision of business support services.
The intention with this Forum in Växjö is to help us face up to the challenges in supporting entrepreneurship in the future by looking at how policy and business support measures are responding to the requirements of to-day's 'knowledge economy'.
3) The 'Knowledge Economy'
As we are reminded in Charles Leadbeater's book on the knowledge economy, 'Living on Thin Air' :
"The knowledge-driven economy is not made up by a set of knowledge-intensive industries fed by science. This new economy is driven by new factors of production and sources of competitive advantage innovation, design, branding, know-how which are at work in all industries from retailing and agriculture to banking and software"
Central to this new economy, therefore, is the exploitation of human knowledge and skills rather than the exploitation of plant and machinery or physical labour that characterised earlier phases of economic development.
This change partly explains the growth and increasing importance of the service sector in modern economies, but it has also brought other changes that we must go on to consider.
These are among the themes that we have to address.
4) Elements of the ' Knowledge Economy' - ICT
To-day's economy is clearly being driven by developments in Information and Communications Technology. Already at the Helsinki Forum in September 1999 we were looking at the implications of these developments for the interaction of the public authorities and support organisations with both new and established businesses.
However, it is worthwhile reminding ourselves of some of the important features and opportunities presented by this technology.
We now need, in Europe, to quicken the pace of the exploitation of these new technologies and release their potential across the economy.
5) Elements of the ' Knowledge Economy' - Entrepreneurship
And then on EU entrepreneurship.
A recent Eurobarometer survey on this showed some very interesting results. It asked a number of questions on attitudes to risk-taking. These showed that our general attitudes to risk-taking are unfortunately still not as robust as those in the United States.
One question asked if people supported the statement "One should not start a business if there is a risk it might fail". In the E.U. 45% agreed with the statement, whereas in the U.S. only 27 % did so.
Similarly, in response to a question on whether people would prefer self-employment to being employed, two thirds of Americans said they would prefer self-employment. European responses varied quite considerably.
These are important indications that we are moving in the right direction. We need to quicken the pace and identify new opportunities. We know that one way for a society to increase its overall level of entrepreneurial activity is to increase the extent of female entrepreneurship.
This liberation of the entrepreneurial spirit in new social groups is vital for the creation of the entrepreneurial society.
6) Elements of the 'Knowledge Economy' Design and Intellectual Capital
Design has been defined as the difference between doing something and doing it well. Increasingly in practice, design is becoming the difference between doing something that is commercially successful and not being able to do it at all.
Furthermore, with Europe's rich cultural diversity, it is a competitive advantage that is susceptible to much further exploitation.
The significance of design and related creative activities, therefore, can only grow with the knowledge economy. New and effective ways to promote design go hand in hand with the other measures that are putting in place the building blocks of competitiveness.
However, generating value through knowledge-based and creative activities also brings with it new issues that have to be addressed.
7) Elements of the 'Knowledge Economy' - Intangibles
The third issue for our Forum is, therefore, how to respond to the question of intangibles. Here is a classic example of how we can learn from existing good practice.
The Commission has initiated a certain amount of work in this area which has produced some encouraging results, notably in the form of the report of the high level expert group on the intangible economy, which sets out a conceptual framework and a strategy for making progress with this issue.
But there have also been some imaginative initiatives at a national level which are already beginning to be transferred elsewhere, as will be seen in the workshop on this issue.
The issue of intangibles is clearly one that requires a response from the policy makers. It will increasingly feature across the economy and needs to be addressed. However, as the high level expert group noted in their report, regulation in this area is not appropriate, at least at this stage. The approach has to be to extend the adoption of existing good practice and promote further work on the questions that still have to be answered.
In bringing together some outstanding practice in this area, this Forum is playing an important part in encouraging its wider adoption.
Ladies and Gentlemen, we face a challenge in building the " the most competitive and dynamic knowledge-based economy in the world".
Europe's political leaders have set out what this means in terms of policy priorities and actions. We must, each of us, respond in our own way, in accordance with our own responsibilities.
For those who have a particular responsibility for business support measures, the challenge is to create 'top-class business support services'. We know this is an area where we face substantial change. The need now is to adapt existing structures and services to meet the challenges of the new environment.
Over the next two days you will be contributing to that process by identifying clear examples of good practice that will guide our individual response. I wish you every success in your ambitious task.