Fostering Innovation Driven Entrepreneurship in Europe

Fostering Innovation Driven Entrepreneurship in Europe Intelligenthq

Europe is not producing as many fast growing and innovative companies as the USA. That is the opinion of the World Economic Forum. The culture of entrepreneurship in Europe is considered to be lagging compared to other regions, and something needs to be done. The World Economic Forum explains that while Europe is home to five of the most innovative countries in the world (ranked in the top 10 for innovation)  the region overall falls down because the conditions in Europe are not optimal for entrepreneurs. The concern is that Europe is going to fall behind in terms of entrepreneurship if steps are not taken to foster it and the innovative approach that comes with it.

According to the World Economic Forum there are 12 pillars that drive competitiveness. These are thought to be institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development technological readiness, market size, business sophistication and innovation. In Europe, Finland, Switzerland, Germany, Sweden and the Netherlands all rank very highly on the latter point, and are considered to be strong innovators. Yet work needs to be done to increase the competitiveness of Europe to be able to benefit from the innovation that already exists and drive further entrepreneurship and innovation. This requires a deep understanding of the situation. As the World Economic Forum report explains:

“Fostering innovation-driven entrepreneurship in Europe requires a comprehensive view of the entire entrepreneurial life cycle.”

The work of the World Economic Forum determined that the life cycle of an innovation-driven entrepreneurial venture has three different stages to it. These are defined as being stand up, start up and scale up. During the stand up stage the behaviours, attitudes and skills are encouraged within Europeans to fuel the desire within them to think about developing entrepreneurial businesses that are scalable. During the second stage, the start up stage, resources are pulled together to start a business. At this stage there needs to be access to money for entrepreneurs to be able to get off the ground with their innovative ideas. The third stage is scale up, and during this stage small businesses need to be able to scale what they are doing. This increases their ability to provide jobs in Europe.

12 pillars that drive competitiveness Intelligenthq

The problem, however, has been found to be in the scale up stage, with very few European respondents to a survey carried out responding positively regarding conditions for scaling up in their country, and so this needs addressing if innovation and entrepreneurship is to be fostered. The good news is that people are motivated to change. There is a drive and energy for improving the situation to better encourage entrepreneurship in Europe. The support is there, and as mentioned by the World Economic Forum report,

“An overwhelming majority of survey respondents (87%) say they would personally support initiatives in their countries, such as the provision of educational or financial opportunities for prospective entrepreneurs”.

The World Economic Forum argues however, that what needs to happen is that stakeholders need to “focus, connect and partner” to be able to really offer this support to innovative entrepreneurs. With regard to focusing it is argued that criteria are not specific enough to help those that are interested to be able to find and invest in worthy entrepreneurial activities. On the subject of connecting it is argued that there need to be better links and connections across countries, with greater openness and inclusiveness across Europe. Regarding partnering, it is explained that there needs to be an enabling network where stakeholders are “encouraged to collaborate”, and where they can partner across different schemes to help fledgling organisations to achieve scale.

The summary of the findings ultimately is that Europe needs more of an overarching framework within which innovations will be supported. This requires the need to be visionary and put the pieces in place for the future. The World Economic Forum argues that Europe needs to have further debate on how Europe can get ready for a greater level of innovation, and nurture the types of environment that can help entrepreneurs to succeed, and to reach and conquer that all important “scale up” stage. The World Economic Forum is continuing to support work that helps to promote innovation driven entrepreneurship, and it will be interesting to see where this all goes.