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Over the past few years we’ve seen a wealth of European technology and entrepreneurial talent migrate across the pond in search of greater opportunities to achieve their dreams. It’s not just the monetary opportunities Silicon Valley can present, but the entire US entrepreneurial ecosystem and the incentives they’re given to succeed.
This is not new.
Since the dawn of the twentieth century, the European business community has had one eye on America, its great rival. But while the US has become more and more dynamic as an economy and led the way across a number of industries — including technology — Europe has gone backwards.
Everyone knows that small growing companies are a key driver of any successful economy, but I think most people would agree that Europe has not created an environment that allows entrepreneurs to flourish. That has left a need for change.
A recent quote in The Economist caught my eye and really drove home that need for change:
“Europe’s culture is deeply inhospitable to entrepreneurs; wanting to grow a start-up into a behemoth is quite as countercultural as piercings and performance art.”
From my experience as an entrepreneur and in my role as an investor, I still think that the best thing governments could do is to just get out of the way. In areas like employment law, regulation and immigration, they could remove so much of the friction and red tape that currently binds so many entrepreneurial hands. However, these things are so firmly rooted across Europe that it’s going to take time – and probably require the economy to sink even further – before these entrepreneurial barriers will be broken down.
From all of this, we’re left wondering if European entrepreneurs will ever be able to make it big by staying in Europe, or whether it’s simply a stepping stone to the US. Can Europe possibly reverse the tide and become one of the global entrepreneurial strongholds?
I think there are a few encouraging signs to say that it can.
There are brilliant cracks of European light breaking through the gloom that could help spark a global shift in entrepreneurial power. Initiatives like Estonia’s Tiger Leap Foundation, which is piloting a project to get six year olds learning to code in schools. Initiatives like this are all about providing the next generation with the tools and skills we think they’ll need for the future. Some of these programs aren’t especially new, and having an arsenal of skills and an entrepreneurial drive is one thing, but we also need to make sure that Europe is creating a better environment for entrepreneurs.
Meanwhile the economy — coupled with limited funding — has led to the costs of starting and growing your own business to be reduced, especially for skilled people. And in the technology industry we’re starting to see people and resources coalesce more and more around central hubs, with the main ones in Europe currently being London and Berlin.
It really could be one of the silver linings from this long and painful recession that being an entrepreneur starts to be seen as an increasingly viable alternative to the region’s more long-standing industries.
There’s still a long way to go but these are all positive steps in the right direction for the European entrepreneurial scene.
It may sound terribly clichéd, but it’s always darkest before the dawn. Although it’s difficult to see right now, I’m confident that a more dynamic, a more mobile and a more risk embracing Europe can emerge from all of this — and there are definitely signs that things are starting to change for the better. Make no mistake; Europe is moving towards a new entrepreneurial beginning.
Jos White is a partner at Notion Capital, a venture fund focused on cloud and SaaS startups. He was previously a founder of three companies, including MessageLabs, which was acquired by Symantec in 2008 for $700m