European innovative companies still need more help - Commission
European innovative companies are still not getting enough financial assistance in the early stages of their development, the Commission said in a communication to the Council on 18 October. Despite the fact that there were more 'business angels' investing in start up companies in 1999 and that the venture capital invested increased by about 70 per cent, the communication recognises that these figures still compare unfavourably with the USA where venture capital investments rose by 150 per cent in the same period. The small and relatively fragmented nature of the European risk capital market has an adverse effect on start up companies and this is particularly clear in the case of small hi-tech start-ups. The communication suggests a variety of measures which will improve the conditions for companies starting up, including - easing quantitative restraints on institutional investment in equity capital, - softening bankruptcy laws to failed entrepreneurs (while maintaining adequate protection of creditors) - developing a framework more conducive to investment and entrepreneurship The measures fit in with the recommendations made at the Lisbon summit in March. 'There is a need for further progress in implementing relevant structural reforms, in financial-market integration and in promoting a culture of entrepreneurship,' says Commissioner for monetary affairs, Pedro Solbes, in the communication. In addition to concrete financial measures, the Commission also recommended that a culture of innovation and entrepreneurship be fostered in the EU. Several examples are given in the communication, such as the introduction of entrepreneurship onto school curricula and award schemes for entrepreneurs.