Entrepreneurship crucial for successful companies in Europe

NEWS Published

We need a holistic perspective to be able to create a better European ecosystem for entrepreneurs. Innovation is not enough, the products must be commercialised and reach the market if companies are to be able tocreate growth.

Magnus Henrekson
Foto: John Thys/TT
Gunnar Hökmark
Foto: John Thys/TT
Jakop Dalunde
Foto: John Thys/TT

But there are huge differences between the member states. Today we have 28 different versions of capitalism and reform must be based on the preconditions in each country. That was Professor Magnus Henrekson, CEO of the IFN, message when he presented a report on innovation and entrepreneurship at a seminar arranged by the Brussels office of The Confederation of Swedish Enterprise and IFN at the Permanent representation of Sweden to the EU.

In the rapport “Institutional Reform for Innovation and Entrepreneurship: An Agenda for Europe” (published as a part of the EU project Fires), Magnus Henreksson together with IFN research colleagues and co writers Niklas Elert och Mikael Stenkula, suggests reform in nine areas.

Taxes is one of them, the report suggests they should be low and general.

Opening up for pension funds – which represent a very large part of all saved capital – to be investable as venture capital for the entrepreneurial sector is essential.

And it’s important that social insurance is not tied to a single company but are portable, like the Danish flexicurity system.

The rapport was discussed by a representative for the European Commission and two Members of the European Parliament, and the discussion was moderated by the chief of the Brussels office of The Confederation of Swedish Enterprise Jens Hedström.

Slawomir Tokarski, responsible for innovation and advanced production for the European Commission’s Directorate for the single market, industrial entrepreneurship and SME, said that innovation is becoming more and more complex as far as policy is concerned. Innovation contains several ingredients, not just new industrial products and services. It also concerns new phenomenon’s, such as intellectual property.

- That means that more people, sectors and departments need to work towards the same goal. We also need to have a holistic view and get away from every DG focusing solely on their particular area. This can be combined with a bottom up-perspective that has been successfully used in several regions. They gathered several regions, all of whom compiled their specific competence and what they needed to create projects. Turned out no one had all the necessary competence on their own, but together they did. We have gathered more DGs at the Commission to help the regions continue this work, which also involve developing business plans and attracting private investors.

Jakop Dalunde, Member of the European Parliament for the Swedish Green party, agreed with Henrekson that there are major differences between the member countries, and that makes it harder to find EU solutions. 

- Many of Magnus Henreksons suggestions can be implemented nationally, but not on an EU level. Henrekson is right that more money doesn’t necessarily create more entrepreneurship but I’m not interested only in creating more entrepreneurship, but also that innovation can solve new societal challenges. Through Horizon 2020 we create technical solutions which can help us tackle the challenges we are facing, for example the climate issue.

Gunnar Hökmark, Member of the European Parliament for the Moderate party, questioned whether it is possible to create a competitive Europe by means of politics.  It will take a more open approach to competition, at the same time as different member states will need to take different measures.

- In Europe we love competition – until we have it. A lot of big companies make governments and politicians do what they want, and protect their industry from newcomers. Everybody loves innovation until you realise what it does to the balance. We need to love the process where old business give room to new ones. We as politicians need to make the uncomfortable decisions, like lowering taxes and deregulating.

Professor Magnus Henrekson, CEO of IFN, summarised the discussion with one clear message.

- Europe needs large, successful businesses in Europe. We shouldn’t worry about the Chinese making cheaper solar panels. Instead, we need to make sure that there are European companies using those cheap panels in smart ways. That kind of large scale companies is what will make us really successful.

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