Commission seeks to boost entrepreneurship with adoption of action plan
The European Commission adopted a new Action Plan for Entrepreneurship on 3 March. The plan outlines five priority areas: fostering a more entrepreneurial mindset among young people, reducing the stigma of failure, providing support for women and ethnic minorities, reducing the complexity of complying with tax laws and making it easier to transfer a business to new owners. The action plan was drawn up following a broad consultation on the Entrepreneurship Green Paper published in 2003. It aims 'to unlock the potential for entrepreneurship in Europe.' The Commission believes that not enough Europeans set up their own businesses, and that too few small businesses in Europe experience substantial growth. Almost half of Europeans say they would prefer to be self-employed, and almost one third of Europe's small and medium sized enterprises (SMEs) cite growth as their main ambition. Overcoming this paradox is a key aim of the action plan, claims the Commission. 'Europe needs more entrepreneurs to boost our lagging competitive performance,' said EU Commissioner for Enterprise and the Information Society, Erkki Liikanen. 'To strengthen innovation, competitiveness and growth, more Europeans need to start or take over businesses, and once a business is established it needs the conditions in which it can grow. The action plan identifies a focused set of measures in areas where Europe can and will make a difference.' Mr Liikanen added that the success of the action plan is dependent upon the commitment of the EU's Member States: 'the EU cannot work alone. Success critically depends on the involvement of the Member States' governments, regional and local authorities and business organisations.' In Europe the speed at which businesses grow after starting up is low compared to the growth of their counterparts in the US. The average enterprise in Europe employs six people - three times less than in the US. Fast growing enterprises, or 'gazelles', the biggest contributors to growth and job creation, are still rare in most EU countries. An ageing population is likely to aggravate the entrepreneurial gap. The age group most active in setting up businesses today (between 25 and 34 years) will shrink in the coming decades. As many as one third of all EU entrepreneurs, mainly those running family enterprises, are also expected to retire within the next ten years. As fewer transfers are taking place within the family, more family enterprises will need to be transferred to their employees or third parties. But as many potential entrepreneurs prefer starting a firm to taking one over, finding successors is likely to be increasingly difficult.