Do you agree with this doom-and-gloom statement regarding the measure of support for business owners? Perhaps it is just the financing of entrepreneurs which is lacking due to factors such as the Euro crisis, rather than an overall lack of support for high quality entrepreneurs.
Entrepreneur Country speaks to a collection of entrepreneurs across Europe to hear their views on the article’s controversial statements. Read the full article here and feel free to post your comments below and join the debate http://www.economist.com/node/21559618
Joe Haslam is Vice President at Stratemic Capital, a boutique VC firm specialising in Disruptive Innovation investments. He reports to Entrepreneur Country live from Madrid.
The article reinforces Schramm´s Law, the only thing any politician needs to know about economic growth and job creation.
"The single most important contributor to nation’s economic growth is the number of start ups that grow to a billion dollars in revenue within 20 years.”
Unfortunately legislators respond to this message the way children respond when they are told to eat vegetables and not ice cream. They want to hang around money and power, neither of which most entrepreneurs are particularly interested in. Yes, really. Jobs come from small companies getting big. Big firms mostly reduce, not add workers. So legislation and public contracts should favour start-ups not more established firms. Then there is this line, which is absolutely true:
"Nothing governments offer by way of assistance, say entrepreneurs, is as helpful as simply removing the hindrances they currently impose."
Anyone who has even started a company will rattle off limited liability, start up visas, social security holidays, co-investment schemes, affordable and reliable energy and communications, timely VAT returns as priorities for any government interested to reducing unemployment. Introduce these and watch entrepreneurship grow, there is no great mystery to it.
Peter Czapp, founder of national accountancy firm The Wow Company, comments on the article in light of the current Olympic celebrations.
If politicians seeking to foster economic growth in the Eurozone can learn anything from Friday’s spectacular Olympic opening ceremony, it is that if you are looking to create the next generation of entrepreneurs, you need to inspire them, as well as creating the right environment for them to thrive. Who is in charge of fanning the flame of European enterprise, in the same way that London’s Olympic bid was led by Lord Coe. Does Europe even have a cohesive plan to inspire the next generation of entrepreneurs? Without this, there will not be a place on the podium for Europe as it competes with the rising business stars around the globe.
Vivi Friedgut is the Director of Blackbullion, an education company offering a range of financial programs and tools. She sees the UK as a hub of optimism for the budding entrepreneur.
I believe the UK is a terrific place to start a business; registering the business is easy, setting up bank accounts, tax, VAT etc all fairly straightforward and can be accomplished with little fuss. Culturally though there is a tendency to slap down business failure more than there is a tendency to reward success (this is a problem in many big corporations too) so fewer will try as it is easier to just work the 9-5.
The success of Dragons Den and The Apprentice are moving us closer towards a society that rewards vision and guts and hopefully in the future we will hold entrepreneurship in the esteem we hold celebrities and recognise the truism of Thomas Edison - "I have not failed. I've just found 10,000 ways that won't work"
Charlie Mullins, founder and managing director of Pimlico Plumbers, believes that more needs to be done than complaining about the current state of affairs.
To say there is a ‘chronic failure to encourage ambitious entrepreneurs’ avoids 200 years worth of history and learning about markets and economies. Of course there is more to encourage ambition in Brazil or China, but that’s like wondering why in 1848 there was a gold rush in California, not Cardiff.
It’s all very well to have an idea, drive, enthusiasm...whatever, but that’s only part of it. A good idea is only good in the right place at the right time. In Europe corporations and economies are mature and have an awful lot to defend. Why would they queue up to change horses late in the race, by funding others to sneak up on the rail? So complaining about a lack of encouragement only gets us back to criticising the proverbial Turkey for not looking forward to Christmas.
Real talent will have the sense to go where it is wanted, and most probably already does. Generally speaking, those doing the complaining probably deserve to be where they are. And if you’re looking for a good example of this in Europe, look south.
Tim Rylatt runs a successful business coaching firm, as part of the ActionCOACH network and is author of ‘Business Battleships.’ Tim argues that rather than the environment being hostile, it is the culture that has shifted within the past few decades.
It’s fascinating to me to see the growth of businesses and business opportunities where previously none existed. Despite the economic environment the creative flair of the entrepreneur is alive and well, and those who really have the bug to succeed will eventually get there. The emergence of alternative funding options using a shared investor process (e.g. www.fundingcircle.com) is encouraging those with an interest in positive returns to connect with those who have an interest for business growth within a more challenging environment… and it appears to be growing as a trend!
Regarding the cultural differences and their effect on the entrepreneurial spirit, I believe there is a definite grain of truth to be explored here. Speaking from a British perspective, there is a much more cossetted approach to developing our children and our companies than existed many decades ago. The mind-set of ‘can’t climb trees without a safety helmet and ropes’ is certainly a challenging one for the up and coming business-person. As we are a product of our environment it means there is a desperate requirement to challenge the things we were taught along the path. If we do that, there’s the opportunity to engage our creative spirit and ‘who dares wins’ mentality. I hope that as time goes on the European stance shifts a little on this point as the litigious handcuffing and wrapping in cotton wool does stunt the growth of truly free and enterprising minds!
Robert Craven is a regular contributor to Entrepreneur Country and Founder of the Director’s Centre.
Start-ups are not where we should focus our efforts. Investing in start-ups is like betting on a horse race without getting a look at what the horses can do. (Clue: most do not win)
Real job growth is found in fast growth businesses (50% of all jobs in a 10 year period) - the top 4% of businesses. (Investing in fast growth businesses is like betting on horses after they have gone over the final jump!! If I could bet at any time that's when I would do it!!!)
Jannick Malling is CEO and Co-Founder of Tradable, a company 'reinventing the online trading platform.
I agree that "If Europe were more entrepreneurial .. it would not have been such a poor producer of big businesses. And it would have produced more successful new technology firms."
One of the key reasons that Europe is not excelling in the entrepreneurial arena is because a lot of businesses are internet based, as the article outlines. Skype, Spotify and others have done well, but what's really interesting is that once these companies decide to take what I call "the leap" - the point of no return where you take a lot of funds in and decide to go for world domination - many of the European companies move overseas. To Silicon Valley or more recently to New York.
Even though I think the tech scene for very early stage is doing well in Berlin, Dublin and others - we don't have that place in Europe where companies that are on the brink of not being considered early-stage but have done proof of concept, proof of business etc - go to. As the article says - you can easily get small funding, but 1.4-4m funding is exponentially harder. And that's not the case in the states.
Also, more than half of all Silicon Valley startups are founded by immigrants, one of the compelling facts in a new video on the importance of immigrant entrepreneurs
Which is exactly what I'm talking about when you look at how companies tend to move abroad to Silicon Valley or NYC when trying they attempt to get bigger.
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