Creating a favorable environment for innovative businesses and start-ups in the EU A revolution in innovative entrepreneurship will help the EU exit the crisis – by MEP Ioannis A. TSOUKALAS, for EP Today

In the midst of the financial crisis, the European Union underlines the need to boost entrepreneurship, especially by supporting young entrepreneurs. A reform in the institutional framework and a better coordination between European and national initiatives for the establishment of innovative businesses and startups is needed. In most cases, mainly in the south of Europe, this framework is not about steps that the states should take to help entrepreneurs. Instead it is about things that the states should not be doing anymore: obstacles to entrepreneurs that need to be removed, market barriers and monopolistic and protectionist policies that need to be abandoned.
Innovative entrepreneurship can be a remedy for exiting the crisis, mainly for the Member States, which are faced with high unemployment rates and brain drain of highly skilled workforce. What is needed is to create favorable conditions for entrepreneurs to flourish. We must not forget that growth is not a policy in itself but a result of policies.
It consists of the changes that are required to remove the barriers to entrepreneurship and enable sustainable economic growth. There should be a revolution of innovative entrepreneurship that will lead to the transformation of knowledge and high-quality skills into innovative products and services.To this end, emphasis should be placed on highly skilled jobs and competitive salaries that will create products and services with high added value. Talented young people should be encouraged to trust their skills and strengths, and take the risk to create their own businesses. If the jobs do not exist, somebody needs to create them and it is self-evident by now that entrepreneurs are far better in creating jobs than the states.
Obstacles hindering entrepreneurial creativity should be overcome and smart ideas need to be transformed into healthy entrepreneurship. The problems are well known. Solutions and best practices exist internationally and are easy to identify.
Above all, it is vital to have a simple, clear and predictable regulatory framework for SMEs to facilitate their functioning in the single European market. Promoting the access of SMEs and start-ups to new forms of funding through innovative programmes and non-banking routes (peer-to-peer loans, crowd funding, cooperative business models, microcredit and other tools which can provide vital investment for SMEs) can contribute to the development of entrepreneurship in Europe.
Moreover, entrepreneurship education, especially among young people and women, as well as mobility programmes between universities and companies in order to convert research into innovative products are essential. In this context, the European Institute of Innovation and Technology (EIT) plays a landmark role in promoting an entrepreneurial culture through education, training and practice.
All Knowledge and Innovation Communities (KICs) of the EIT actively promote entrepreneurship in their respective fields through the development of curricula that combine excellent science and innovation with entrepreneurial skills and experiences, preparing the entrepreneurs of tomorrow and infusing existing businesses with an innovative and entrepreneurial mindset. Given the fast development of new technologies and the changes they bring to our daily lives, enhancing digital skills is necessary to make use of ICT technology and to encourage the success of new businesses and SMEs.
An increasing number of jobs require e-skills but the European education seems to be lagging behind. ICT skills are necessary for all economy activities-energy, green technologies, health, education, public administration-to name a few. Computer science in Europe is growing steadily the last decades. It is estimated that approximately 5 million jobs are currently available in the EU in this field. Most importantly, ICT related jobs do not seem to be affected by the crisis. Even now, at the peak of the crisis, demand for these skills is greater than supply. The paradox, however, is that the interest in these professions has been decreasing since 2005. Today European universities produce less and less ICT graduates every year. At the same time, about two million ICT-related job vacancies cannot be filled.
With youth unemployment reaching unprecedented levels in many Member States (Spain: 57.7%, Greece: 54.8%, Croatia: 49.7%) national governments are called to redesign their educational systems to provide young people with the necessary skills for today’s job market and to support them in their social and professional future.
Moreover, it is worth noting that the cost of creating an innovative ICT startup has significantly decreased in the last 10 years, mainly as a result of new technologies (ultra-fast and ubiquitous broadband, cloud computing, open source software, open data and access to public sector information).
It is clear that the EU will not be able to cope with modern challenges unless structural barriers that hinder the full use of the entrepreneurial potential are removed. Member States are called to use efficiently the new tools offered by the EU Research and Innovation Programme “Horizon2020”, which foresees funding of almost 3 billion euros for innovative SMEs, as well as COSME, the EU Programme for the Competitiveness of Enterprises and SMEs with a planned budget of 2.3bn.
In a globalized economy with fierce competition innovative businesses and high-tech start-ups represent “Darwinian” processes whereby only the fittest will survive and thrive. A fundamental reorientation of European entrepreneurial effort and an efficient allocation and use of available resources are, thus, needed to generate critical mass for research and innovation and ensure long-term sustainable growth.
Investing in high-tech start-ups is the main driving force to promote growth and boost employment in the emerging knowledge economy and digital culture. It is clear that the underinvestment in research and innovation is the root cause of the crisis and not the result of it. And during this period of crisis investment in innovative entrepreneurship is not a luxury but a necessity. The transformation of the EU into a knowledge and innovation society is the only reliable and predictable path to long-term development.

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