" Entrepreneurship and Innovation Policies for Global Competitiveness"
The seminar in Brussels on April 17th was arranged by the Swedish Foundation for Small Business Research (FSF), the Swedish Agency for Econimic and Regional Growth (NUTEK) and the Swedish Institute for Growth Policy Studies (ITPS).
Welcome by Ms Lena Stenberg , Programme Manager NUTEK (SWEDEN)
"Entrepreneurship and innovation policy in Ireland. Success over the years, challenges, current situation" was the heading under which Dr Tom Cooney , Director - Institute for Minority Entrepreneurship (Dublin Institute of Technology), described the entrepreneurship and innovation situation in Ireland.
T he recent economic progress in Ireland is mainly due to the membership of the European Union, a consistent, long-term partnership, a well-qualified workforce, global trade expansion, a boom in the industry sector and life science as well as a young demographic profile. Ireland is still one of the best performing economies in Europe but the real economic growth is slowing down. Exports are needed but Ireland is not price competitive. The main future challenge is the ability to compete with countries such as India and China that offer low costs, an ample supply of skilled labor and mobile investment.
Dr Tom Cooney concluded his presentation by describing the Irish part of the research project, "Entrepreneurship and Innovation Policies in European Countries", within the IPREG network. The main findings are:
• Ranking for Economic Outcomes - No 1
• Ranking for Comprehensiveness of Policies - generally in the middle
• Need for coherent, well-integrated strategies
• For knowledge-based economy, both entrepreneurship and innovation policy needed together
• Need for identifiable champion
• Still congratulating ourselves - time to move 'From Good To Great'
A final thought: 'Do not follow where the path might lead. Go instead where there is no path and leave a trail' - Ralph Waldo Emerson.
Mr Per Tervahauta , Head of Office, ITPS (Brussels) commented on Mr Cooney's presentation. He had two main questions. Firstly, what are the most important measures to increase the number of entrepreneurs? And secondly, what part does the social partnership in Ireland play for innovation and entrepreneurship policy?
Mr Cooney answered by pointing out that Ireland is missing a coherent strategy that works between all the partners. Ireland also needs companies and individuals who want to grow and stay in the country. The process of social partnership is not assured.
Dr Jarna Heinonen , Director TSE Entre, Turku School of Economics (Finland) presented the Entrepreneurship and Innovation Policies in Finland.
• Entrepreneurship policy
- Strong bottom-up AND top-down policy
- Several organisations involved necessitating co-operation both at national and regional level
- Wide perspective: " Everybody in the society "
• But what does this all imply? - How is Finlands position not only among other countries but also content-wise?
Dr Jarna Heinonen continued her presentation by describing the IPREG research project. The main findings are:
• The systems do not solve the basic problem in Finland - the level of entrepreneurial and innovative activity is low, especially the level of growth entrepreneurship
- Both use (in-flow) of and output from the systems need to be developed
- It is not only about fostering competitive approach (~market dynamics), but also about giving up the current structures and processes of the co-ordinated approach
A final thought: Less is more! : market dynamics makes the difference, not the systems.
Ms Lois Stevenson , Professor, IDRC-International Development Research Centre (EGYPT) commented on the presentation. In Finland, it appear to have been a policy development during the last eight years. The government has reflected constantly on how well they are doing. She also commented on the value of the IPREG process:
• Great to include comments from external stakeholders about the report
• Finland is a good example regarding the horizontal approach
• What is the main barrier in terms of incentives?
Dr Jarna Heinonen pointed out that the problem is cultural; people are not willing to become entrepreneurs. Finland has been excellent in the horizontal approach.
Mr Jiri Plecity , Member of Vice President Günther Verheugens Cabinet, European Commission (Belgium) continued the seminar by discussing "SME and Entrepreneurship - Recent work at the Cabinet".
Entrepreneurship and innovation is the only way for Europe. The neighbourhood countries are the natural starting point for internationalisation. Important to improve the conditions at the internal market and remove barriers. Adapt policies so that European entrepreneurs play in the first league. The link between horizontal objectives and the lack of outcomes: it's a question of mindset, having enough people willing to become an entrepreneur, or willing to be a growth entrepreneur. The commission is trying to inspire by studying how entrepreneurship is treated in the education system. The entrepreneurial mindset starts in primary school. Textbooks were compared in Europe and the US. In Europe, the attitude was very negative. One idea is to establish a program of exchange for young entrepreneurs, like the Erasmus programme
The audience commented by raising the question of gender, women entrepreneurs, and the potential that is considered to be poorly developed. Another comment was the role of public procurement and how it can be developed in Europe.
Jiri Plecity
Mr Björn Falkenhall , Senior Analyst, ITPS Los Angeles (USA) presented the growth strategy in the US.
There are two broad themes in the national debate on economic growth policy:
• Improved business climate. Reducing costs for doing business, mainly by cutting taxes
• Increase the innovative capacity of the U.S. Increasing R&D-financing and improving K-12 education (primary & secondary school)
Mr Björn Falkenhall concluded his presentation by lessons for Europe:
• Strong focus on capital supply, both loan capital and VC
• Taxes are also used to provide incentives for activities and behaviors that promote economic growth, balance against simplicity!
• Private players enter into partnerships and are utilized as intermediaries for execution of public programs
From left: Björn Falkenhall, Jarna Heinonen, Anders Lundström and Tom Cooney.
Ms Ditte Rude Petersen , Economist FORA (Denmark) commented on the presentation.
There are mainly three areas where the US is ahead of Europe:
• Venture capital, a prioritized area for years
• Infrastructure of legal, financial advisors
• A close corporation between the universities and the business community.
We have to learn from the US: what are they doing better and how to make this happen in our own countries? Today, you can see the effects of the policies that were implemented in the US during the 70s and 80s.
Dr Anders Lundström , FSF/IPREG (Sweden) concluded the seminar by describing the IPREG project, "Entrepreneurship and Innovation Policies in European Countries - Analyzing policy measures in European countries and regions"
IPREG (Innovation Policy Research for Economic Growth) is a cooperation between researchers, business organisations and policy makers in 14 European countries and focuses on the relationship between Entrepreneurship and Innovation Policy. In this first step of the IPREG research programme, regional and national level Entrepreneurship and Innovation Policies in 14 European countries and regions have been investigated. The countries have mapped out and assessed the scope of their Entrepreneurship and Innovation Policies, identified the extent of integration between the two policy areas and examined specific country-context variables that may explain differences in the scope and integration of these policies. The overall objective is to enhance policy learning within European and other countries.
Main conclusions: context • No simple correlation between Vitality and Outcome
• Innovative entrepreneurship related to Outcome
• General entrepreneurship negatively related to Outcome
Main conclusions: Policy and comprehensiveness
• Innovation policy less comprehensive
• Entrepreneurship policy closely related to SME policy
• Innovation policy closely related to S&T policy
• The two policy areas are partly integrated
• Entrepreneurship and Innovation policy are going to be internationalised
Main conclusions: Evaluation impacts:
• The two policy areas are not properly defined
• It is not possible to calculate resources invested
• It is not possible to do systematic evaluations
Main conclusions: think outside the box
• EU a more active player in the policy field
• Policy making is decentralized
• Weak bridges between research and policy making
• More or less of policy measures could be better - the issue of policy gaps
Concluding panel discussion
by Mr Per Tervahauta (ITPS), Dr Tom Cooney (Dublin Institute of Technology), Dr Jarna Heinonen (Turku School of Economics), Dr Anders Lundström (FSF), Ms Ditte Rude Petersen (FORA), Mr Björn Falkenhall (ITPS), Ms Lois Stevensson (IDRC). Moderator Dr Dan Hjalmarsson (IPREG/SWECO Eurofutures).
Dr Dan Hjalmarsson : The main value of the first step of the IPREG study is the knowledge and overview of the Entrepreneurship and Innovation policies in each of the participating countries.
Ms Ditte Rude Petersen : the firms that have specific characteristics are the most successful ones.
Ms Lois Stevenson : growth entrepreneurship in Egypt: they have similar demographic setting. You can't predict about the success of their firms but you can say that these people are more probable to be successful entrepreneurs. In the US, there is a huge amount of exposure, the density issue is critical. The number of enterprises per household is therefore important regards to exposure.
Dr Anders Lundström : innovative entrepreneurs: how do reach them? More general entrepreneurs might give a larger share of innovative entrepreneurs.
Dr Jarna Heinonen : Agree with Dr Lois Stevenson about the density. How to pick the winners?
Audience : Will lowering taxes in Finland and Sweden motivate?
Dr Jarna Heinonen : It is a cultural issue; you do not become an entrepreneur in order to be wealthy.
Ms Ditte Rude Petersen : the income tax do not have an impact on whether to be an entrepreneur or not. But it has an impact on growth entrepreneur.
Audience : What is the main difference between universities in the US and in Europe regarding motivation?
Mr Björn Falkenhall : A big difference regarding venture capitalist and their role in the US and in the Nordic countries. In the Nordic they perform better in later stage than in the early. Venture capitalists stress their role as partners or coaches in the US but in Europe they are considered as investors.
Dr Tom Cooney : acceptance of failures in the US system. If you fail once in Europe you are gone.
Ms Lois Stevenson : innovations are coming from a few universities in the US. Better if the university keep some of the royalties as incentive.
Moderator Dr Dan Hjalmarsson is concluding the discussions by asking the panel a final question: what is most important in order to create more entrepreneurs and innovations?
Mr Per Tervahauta : one observation from the ITPS-work is that all countries have one area where they perform better than others: focus on that particular area.
Ms Ditte Rude Petersen : IPREG work is great in mapping different policies. The next step must be to measure the effect of implementing different policies.
Dr Anders Lundström : to think outside the box, a special kind of structure in the country will create good effect.
Ms Lois Stevenson : figuring out the puzzle on how contacts matters. Deep analyses of the data that is already collected. Making sure that policy makers are more involved.
Dr Jarna Heinonen : entrepreneurship and innovation are culturally embedded. In order to make a difference you need to be different.
Mr Björn Falkenhall : the innovation process is not linear, a process of many actors that is why it is difficult to get data.
Dr Tom Cooney : all are responsible: change the way we behave. We must all take with us one or two things from today's seminar that we can implement in our daily work.
