I had the distinct honour of speaking at and participating in a panel discussion at the European Foundation for Management Development conference at Advancia, in Paris recently. An informed group assembled to hear from entrepreneurs and academics.
I was impressed with the work of Advancia and the support it gets from the Paris Chamber of Commerce. This is an important twinning of interests, and I think a model for other countries. I like institutions that enjoy considerable independence and can forge unique approaches to the challenges of the modern world. Education for entrepreneurs is a major concern and the role of Advancia is to be applauded. I would only add that entrepreneurs also need start-up capital, cash-flow financing arrangements with banks, and of course customers keen to buy from innovators.
That Europe is often compared unfavourably to the US is unfortunate, and perhaps betrays the belief that the US gets it right while the rest of us just muddle along. My view is that Europe has unique strengths (and some worrying weaknesses) that should enable distinctive European approaches to developing entrepreneurs and supporting innovation. Rather than copy Silicon Valley, create another model entirely. I didn’t hear much about how Europe can do this, but I left the event feeling there was life on Planet Europe!
My thoughts coming out the conference are that Europe must be mindful that it not kill off small businesses with heavy-handed social regulation, that drains start-up capital. We hear a lot of talk about jobs and employment, but small and medium businesses are jobs engines and from these small firms grow corporate oak trees. We must also be mindful that while Europeans may feel a perhaps smug complacency at holding the moral high ground on many pressing social issues, this does not help when unemployment is high, with its corresponding economic, social and personal costs.
Whole emerging industries are waiting to be developed, yet more nimble economies may indeed snatch any advantage Europeans may have. Three sectors come to mind: 1. green and environmental technology, 2. electric vehicle technology and 3. sustainable models of industrial growth. No doubt there are many others.
The fear is that even when Europe is ahead, other countries act more quickly to create the sense of urgency needed to fund commercialisation and market adoption of new technologies and services, and once again, Europe may fail to build another global gorilla. Entrepreneurs have a sense of urgency, but systems we design to foster innovation can in the end be bureaucratic and lack timely responsiveness — we do not normally associate entrepreneurialism with the public sector.
I also worry about the need, particularly at the Commission level, to be fair in allocating grants or funding in general. Capitalism, economic development, innovation isn’t really fair and we can’t always back all the winners and ensure there are no losers. While I endorse fairness as a social good, in matters of investment of innovation, you back winners, and no one really knows which are the winners to back and certainly there is no divining rod in government funding that can accurately ensure funding goes to winners. Losers are inevitable — and we heard of important work at Advancia on bankruptcy law across Europe. We need to learn to tolerate failure if we are in the end to build a Europe fit for the 21st century and more.