One of the issues that characterises Europe and harms its economy is the lack of entrepreneurship across the continent. A stereotypical explanation for this is that Europeans are too ashamed of failure and too unwilling to take risks to be successful entrepreneurs.
Contrast this attitude with that of America, where anybody – as long as they’ve got a “can-do” attitude and enough elbow grease – can start a business in their garage and watch it grow it into a billion-dollar enterprise.
So why is America able to encourage its people to experiment and to be bold when starting a new business from scratch, thus making the American market and economy more competitive than the European one? What are we doing wrong on this side of the Atlantic?
Two sides to the problem
Europe basically lacks two essential elements for successful entrepreneurs.
Firstly our governments, political and financial systems do not encourage or even allow entrepreneurs to flourish. In some countries, it is a difficult process starting a business and that is deliberate. Our political elites want to keep the established financial status quo and do not encourage new business to blossom. Taxation, red tape and over-regulation are the means that are used to stop any aspiring businessperson to start their own business and bring more competitiveness in their region. Also in many countries, it is almost impossible to start a new business without bribery or personal connections. Europe is also a very rigid and conservative continent and it is no wonder that nowadays it finds itself in a crisis that is not just economic but also a political, social and cultural one. The narrow-mindedness of the ruling elites, along with power mongering, lack of vision and true leadership seems to be the real problems, not the “laziness” of the ordinary citizens.
Secondly, the other problem concerns our education system along with our mentality as people that we are not very independent or innovation-oriented. We are teaching our youth outdated modules in an outdated way and modules such as religion should not be made compulsory or be taught in the traditional way in our classrooms.
Instead, we should introduce new modules that will enhance the ability of our youth to become more business minded. Our education system should change and include modules that will teach our youth about new industries and how to become more innovative. We need to encourage young people to experiment and take risks and not to crush them through the austerity measures and force them to stay with their parents until they’re well in their thirty’s.
Risk takers need support
How can anyone in Europe be bold enough to become an entrepreneur if the risks are too high and there are no guarantees of recovery or support by the government?
It seems to me that the European population like to stick to what they know. This originates in the post WWII era when an income and job security was very important for our survival. Generation upon generation grew up with this mentality and that has lead to the crisis we are facing now – the world has changed but sadly, we have not.
Our predominant industries are fishing in the north, agriculture on the mainland and the public sector in small peripheral states. The property, tourism and banking industries also flourish because they offer a chance of easy and quick money, seasonal profits in some cases but without the ability of exports.
The globalisation process has forced our biggest industries to move into countries with a cheaper workforce, thus leaving Europeans with fewer options to find a job. And how can there be innovation without an industrial background and the possibility of finding employment to financially support you during the first years of becoming an entrepreneur?
Elites invest in elites
Our established business elites support and perpetuate this situation because they have invested millions in developing these sectors and economic models. Introducing any new sectors would alter the financial makeup of the country and shake up vested interests.
The austerity that European leaders have placed upon us hits young people badly and how do the European elites expect Europe to recover in the future, if the youth on the continent are incapacitated and have their wings clipped in their most creative stage?
They are making sure in that way that the wealth remains in certain rich and powerful hands of certain rich and powerful nations while forbidding any chance of changing this status. It may be that the only way Europe can find a path out of this crisis is for its political and business elites to realise that it is either reform or doom at this stage.
It is in their interest to have an active European population that is engaged in innovation and entrepreneurship. The wealth that is going to be produced can fuel the transformation of the European economy and with an educated population, we could overall become more competitive.
The solution could happen on a pan-European level with the direct involvement of the EU and its institutions but it is doubtful that the local authorities will cooperate and implement the new regulations fully. The problem is that seemingly there isn’t any European politician with enough leadership and backbone to proceed with the necessary reforms.