Innovation, Creation of New Businesses and Jobs
With the aim of improving conditions for the creation of businesses in Europe, Edith Cresson, European Commissioner for research and innovation, launched a wide-ranging consultation exercise in December 1997. Following a round table at which the main issues were raised, three working groups - made up of industrialists, financiers, researchers and representatives of intermediary agencies - have discussed the issues in-depth and a recent conference in Luxembourg provided the opportunity to discuss their findings. On the basis of these discussions, the Commission plans to put forward proposals for actions to improve the environment for the creation and development of new businesses. These will be implemented in tandem with the Fifth Framework Programme, ensuring the highest complementarity, although they will have a far wider impact than on just the Framework Programme. A further conference is planned, in Vienna in November 1998, at which the Commission will present its proposals. Examples of proposals trailed at the Luxembourg conference include launching prizes for the best entrepreneurs in Europe, and setting up a club for innovative companies. However, it is clear that to reduce Europe's innovation deficit, actions which can change the culture in Europe will be required. The image of the entrepreneur needs to have greater value, as in the USA where the drive to try and market new products, with the attendant risks of failure, is seen much more positively than in Europe. Such cultural changes must start from education, with the aim of instilling an innovative spirit right from that early stage. A number of actions are already under way, or planned, to raise awareness of innovation. These include the development of an innovation trend chart, which will allow Europeans to see and compare best practice in innovative techniques and innovation policies. By identifying, comparing and disseminating best practices in financing and technology transfer, Europe can improve its innovation performance. The working groups, which reported to the Luxembourg conference, looked at three separate phases in the development of new businesses, each with its own problems and solutions. - Project gestation The first of these, project gestation, calls above all for the development of an innovative environment, training people in the skills needed to set up businesses and encouraging innovative attitudes. Enhancing the status of entrepreneurs and promoting the value of spin-off companies are both seen as necessary, but beyond that evaluation methods need to be more reliable and an accreditation system for innovative companies should be developed. - Start-up The second group considered the start-up phase, with the major considerations here facilitating access to finance and reducing the administrative burden on new companies. The European patent system needs to be harmonised and simplified, "to benefit inventors rather than patent experts". Measures to help new businesses, such as a network of experts, development of business angels (informal investors) networks and a club for innovative companies could all be considered at this stage. - Growth Enabling growth of innovative companies was considered by the third working group, which saw this as a vital part in creating jobs. Successful growth depends on gaining access to markets and on sharing profits, which is too limited in Europe. Support for entrepreneurs in managing growing enterprises is a major need in Europe, whilst a stock market providing funds for technological companies, similar to the US NASDAQ, in tandem with the establishment of "technopoles" (technology clusters) like Silicon Valley is a prerequisite. Stock options or pension schemes could help attract managers into small companies, while public authorities should work to improve the legal and tax environment for companies. Reservoirs of experts should be created to help companies in the take-up of new technologies, essential for the development of new products. The success of the working groups and the Luxembourg conference in fostering discussions on the issues involved, and bringing forward a huge range of concrete suggestions for action at European and national levels means that the Commission now has a wealth of material to consider in preparing its proposals for actions. The Vienna conference, planned for 11-13 November 1998, will see the Commission present these proposals, which will respond to the needs expressed by companies during the consultations.