Innovation and the creation of new businesses and jobs
"Europe must rediscover an entrepreneurial spirit", according to Edith Cresson, European Commissioner responsible for research, innovation, education, training and youth, speaking at a round-table organized by the Commission in Paris on 9 December 1997 to discuss how to create more new businesses and jobs out of Europe's innovative potential. "The necessary finance is available in Europe but needs to be channelled into technological innovation", Mrs. Cresson emphasized. Often those seeking money to build small high-tech companies and those who have money to invest have difficulty in understanding each others' worlds. "The main obstacles to innovation in Europe are cultural", she continued. "We seem quite successful at starting companies and even at keeping them alive long term. However, we do not seem successful at growing them big." Young, high-tech campus companies, or those hosted by technology incubators, tend to have a higher than average survival rate. But they remain small. Even after ten years of existence they average only around ten employees. Mrs. Cresson was addressing entrepreneurs, industrialists, financiers, researchers and providers of support services related to innovation. The round-table is the first stage of an in-depth consultation exercise in which Mrs. Cresson is collecting the views of key European players in the innovation field. The consultation will continue with working groups to examine the different stages in the creation of innovative new businesses, a workshop in Luxembourg in May, and will conclude at a major European conference in Vienna in the Autumn. Participants in the round-table agreed that technological innovation is crucial for developing Europe's competitiveness and for creating jobs. The impetus will come from young firms, who must be helped and encouraged to create the wealth and jobs of the future. Many participants emphasized that European governments and the EU must establish an administrative, legal and financial environment which is more favourable to the setting up and development of small companies. Although the participants recognized that this is not a new demand, they said it is becoming increasingly urgent if Mrs. Cresson's call for a new entrepreneurial spirit is to be satisfied. Speakers also pointed to the need for closer links between industry, financiers, and researchers. Often these contacts are not established early enough, some participants argued. The debates covered all aspects of starting and developing a new business. Speakers provided opinions and experience from a variety of different viewpoints, including entrepreneurs who have built up companies from scratch, advisers who provide support for young companies, and representatives from the administrative environment. Many speakers emphasized that different kinds of support and training were needed for different stages in the life of a new company: start-up, initial development, and growth/expansion. One point made by a number of speakers was that some entrepreneurs may be good at creating a new business, but less so at developing it into a medium-sized company. Sometimes this is because they have too paternal a view of the company and are reluctant to cede control to outsiders. On the other hand, examples were presented of entrepreneurs having hired external managers to lead their companies into successful growth. The round-table built on the diagnosis of Europe's "innovation deficit" in the Commission's 1995 Green Paper on Innovation and the subsequent First Action Plan for Innovation in Europe, launched by Mrs. Cresson a year ago and currently being implemented by the Commission. The points raised at the meeting will now be examined by working groups set up during the round-table to develop concrete measures to overcome the various barriers to innovation which were identified. The working groups' proposals will be examined and further refined during and after a workshop in Luxembourg in May, and will be formally presented at a conference in Vienna in the autumn.