Do Europeans lack the ‘Entrepreneurial spirit’? Only 37% of Europeans polled in 2012 said they would like to have their own business, compared to just over half of people in the United States and China. And even if they had the drive to be self-employed, two-thirds feel that it would be simply unfeasible to start a business in the next 5 years.
It’s true that the economic climate in Europe hasn’t exactly been sunshine and rainbows recently. However, there are also risks and difficulties associated with starting your own business that might clash with so-called ‘European values’. For example, the European social model often struggles to cope with self-employed people. Depending on the country, everything from qualifying for social benefits to applying for a mortgage can be made more difficult by being your own boss.
Yet entrepreneurs are ‘job creators’. Given the continent’s stagnant economic record over the past several years, an influx of innovative new businesses could bring enormous benefits. So, what’s stopping people from starting their own businesses?
Want to learn more about attitudes to entrepreneurship in the EU? Have a look at our infographic below (click for a larger image):
When we asked our readers why Europeans weren’t more entrepreneurial, we received a flood of responses arguing that red tape is the main problem. A typical comment comes from Toni, who blames “Taxes, red tape, mandatory self-employment taxes, etc., etc.”
In a 2013 poll, 72% of young Europeans cited the administrative burden as a factor making entrepreneurship unfeasable for them. Is European bureaucracy simply not geared up to cope with self-employed people?
To get a response, we spoke to Liolios Nektarios, an entrepreneur and co-founder of Startupbootcamp, an organisation that promotes and supports entrepreneurs as they start their businesses. He agreed with Toni’s comment, but argued that some EU Member States were worse than others:
You’re right. I wouldn’t say it’s European legislation – some countries are more open to entrepreneurship than others. I live and operate in the UK, and it’s a lot easier to set up your own company and get access to certain services in the UK. So, I would see if there’s an infrastructure that allows me to exist and set up my own business, but I would definitely consider moving somewhere. This is why some places are much bigger tech hubs, or start-up hubs, than others.
To get a different perspective, we put the same question to Mathieu Carenzo, Lecturer of Entrepreneurship at the University of Navarra. What would he say to Toni?
Finally, we spoke to another entrepreneur: Robert Willstedt, the CEO of FEO Media, an independent mobile game developer based in Stockholm. What did the situation look like from his perspective?
What’s stopping you from starting your own business? Do Europeans simply lack the ‘entrepreneurial spirit’? Or are taxes and red tape the problem? Is access to starting capital the biggest barrier to starting a business in the EU? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!
IMAGE CREDITS: CC / Flickr – Rachel
The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
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I’m guessing you mean people in the ‘Eurozone lack the entrepreneurial spirit’ with the obvious answer being they are in the Eurozone, outside of the political currency area things are not as bad as you portray
http://www.telegraph.co.uk/finance/businessclub/11692123/Britain-hits-record-number-of-startups-as-more-aspiring-entrepreneurs-take-the-plunge.html
Lack of aggregate demand. Why don’t you see that?
In Italy taxation is fucking TERRIBLE
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If people in the political currency area want to start a business the first thing they should do is leave the political currency area.
http://is4profit.com/overseas-entrepreneurs-choose-uk-for-business/
In east Europe the beurocracy stops them! The former communist systems make habits that they put obstacles on every stage on entrepreunial.. than I see Brussel is going that way recently.
It stop me that I have pay 5 times the debt and my country still send money to Germans … Also they want all small business closed cause the big Germans supermarkets must have the eu market !!! That’s why we (Greeks) pay 46% taxes + car , home , land and breathing taxes !!!!!!!
European bureaucracy and high taxes are cutting all the entrepreneur spirit. Europe wants dependent workers because they are better to control than small enterprises.
Hipócritas. Pelo que vejo deste debating europe em muitos temas é a favor da americanização da Europa, para além de que muitas das perguntas são em si feitas de forma a influenciar os leitores. Já agora porque não falam sobre a política continua de desmantelamento de sectores industriais e agrícolas em muitos dos países? Da destruição dos pequenos produtores e comerciantes através de leis que favorecem os grandes?
Bureaucracy. but alos, not everyone is born as businessman.
The single market is not yet complete. This makes it hard to do business in the EU
This is a very good debate. In the UK, traditionally we have had a VAT exemption for small businesses because of the hassle factor in collecting tiny sums of VAT, and also as a small tax stimulus. The current turnover limit is £81k per year. But last year, the EU decided to end this system in respect of transactions between UK entrepreneurs and buyers in other EU countries. This is now an admin headache and a loss of revenue for micro-businesses who sell small quantities of products across borders. So the EU has made it harder for many small businesses in the UK to thrive.
Second point : throughout the Greek crisis, I never heard a word from Greek businesspeople and industry lobby groups about how they intended to stimulate growth in the private sector in order to boost the Greek economy. If there are any Greeks here, can they say more about this?
Taxes, red tape, high risks/ lack of capital, big businesses, high competition, mafia, media making people fearful, fear makes people lack ambition.
Dutch startup costs are amazingly high.
Europe isn’t a good place to do anything… Europe become a feud from markets… And they taken everything to themselves!!! Or you have already a good pocket… To start a business or you will find so many problems and troubles than in the end of two mouths you are so regret!!! If everybody works for the feud they can control us, as your dreams!!! Your next question should be :
Should German live UE? and take with them that liberal politics that scares European ?
Burocracy, high taxes, everything is expensive…
The europeans, in business or not, have to pay too high and too many taxes to keep macro burocracy, greedy politicians and stupid “human”policies that only increase corruption..
I’m EU citizen and pro EU, but Eu doesn’t offer real help for simple citizens who want to open any bussiness, unless those people are already rich…or they have some illegal connections…with people who can lend them money…
The EU does not offer education and protection and incentives for people to venture into new businesses unless, as mentioned above, they have enough money to throw around…
The EU does not offer education and protection and incentives and motivation for people to venture into new businesses unless, as mentioned above, they have enough money to throw around…
I risk my money and time to open it and the government takes over by high taxes and many expensive regulations even to fire a bad employee.
long traditions of “secure” state service plus a non encouraging taxation system
High interest on credit in Croatia (6-8%) and high state and local taxes!
Both, red tap and taxes in France in particular..
bureaucracy, corrupted officials who are on the pay roll of the big companies and poor infrastructure (Romania)
Taxes and especially social security payments in Spain
You just answered yourself….too many taxes,too much bureaucracy…..= lack of motivation…too many obstacles..
Lack of money and too much taxes
terrible bussiness ambient created by ignorant political government, here in Croatia , I mean non confident law , not created to enable and accelerate small bussiness no bussiness bank , banks wants to lend money only to citizens because banks colect huge interest rate from them , bureaucracy which lives only for itself , not to serve to citizen or small bussiness .
because we can not rival with big multinational companies that are allowed to escape taxes with EU laws approval while we, small national and local businesses, are not.
If I am Danish and want my business in Sweden ….I would say your bloody borders! !!!
Bulgaria has the lowest taxes in the EU, but here the bureaucracy, the corruption and the mafia reject the people.
I don’t like to take unnecessary risks.
Money.
complicated procedures, borders and taxes -its not profitable here
In Hungary even the Santa was tax- penalted during his visit to children not giving bill….
multinational companies trying to end individual businesses, taxes, bureaucracy, crisis, authorities’ idifference, lack of motivation, lack of money… do you need more reasons NOT to start business in the EU?
1)bureaucracy2)taxes,taxes,taxes,stupid taxes3)NO MONEY4)risk:in Greece you can find your self in jail for 600€ or loose your home..5)you dont know what NEW taxes will come the next week!!!!!you can’t make any plan at all 6)you need more?
The idea that Europeans somehow lack “entrepreneurial spirit” ( a vague concept at best) is a very questionable finding. Most EU States have significantly higher shares of self-employment than the US and small businesses account for a much higher share of total employment. Indeed, the US has one of the lowest self-employment rates in the OECD, so on the face of it Americans are happier working for someone else than Europeans and more likely to be employed by a large corporation. A better question is why more US small firms grow quickly into medium and large firms. It could be something as vague as entrepreneurial spirit or red tape but it could also be that the US has a big unified market, invests much more in R&D, has long established and effective institutional support for new tech companies, applies digital technologies more rapidly and widely, and has one of the most developed venture capital markets in the world. Just a thought.
Lack od money,taxes are too high.Life is just too expensive to have any money on the side to start a buisness without going to the bank and taking a loan which you then have to pay off the next 20 years.People haven’t got the money to buy stuff that you want to sell because they are broke.Shortly the € has destroyed the people in Europe economically.Wages are too low in reference to renting or buying a house,medical insurance is too high etc.etc.It’s best if you live outside the eurozone…
In my opinion there are many reasons to have our own business. But we have to remember that to make it effective, we should reach the appropriate solutions. Certainly one of them is http://www.comarch.com/telecom… that will facilitate communication and it will provide constant flow of information. This option is already used by many companies in the world and works perfectly.