Risk capital still needs more impetus - Commission
The European Commission has called for more action to help achieve the goals of the Risk capital action plan (RCAP), the provisions of which should be completed by 2003. The plan is seen as a key tool in helping innovation and entrepreneurship in the European Union (EU). Figures for venture capital in Europe seem encouraging at first glance. Since the inception of the plan in 1998, venture capital has increased three fold in the EU and four fold in the key early capital stage. But the level of capital available is still much smaller than that available in the USA and the gap is still growing, having been twice the size of the EU in 1998, it is now four times as big. In addition, the recent indications of a downturn in various economies makes progress in this field even more important. 'Member States should, without further delay, press ahead with implementing the action plan to facilitate investment and stimulate risk capital especially now that the industry is suffering a down turn and faces uncertainty,' said EU Internal Market Commissioner, Frits Bolkestein. Specific actions that would help include progress on tax obstacle removals, promotion of innovative projects and agreement on a single European Community patent. The commission also highlighted the key role research has to play. 'The R&D [research and development] sector could prove the most cost effective for promoting entrepreneurship by helping and encouraging researchers to market their innovative ideas and applications,' the Commission said, mentioning the forthcoming Sixth Framework programme as a good vehicle for bringing this about.