ECONOMY

Commission unveils plan for promoting entrepreneurship

The Greeks and the Irish emerge as the most entrepreneurial in the European Union in a European Commission report released this week which lays out an action program for bolstering entrepreneurship; 12 percent of these two nationalities were found to have undertaken some form of business risk in the last three years – about the same as in the US – compared to an EU average of 4 percent. The EU action program presents the basic initiatives to be undertaken in five strategic sectors: the cultivation of entrepreneurial mentality among young people, ameliorating the stigma of failure, support to women and members of ethnic minorities, facilitation of compliance with tax regulations and of the transfer of a business to new owners. The report notes that very few Europeans set up their own businesses and very few small firms in Europe see any significant growth. Nevertheless, somewhat paradoxically, almost half of Europeans state a preference for self-employment and about one-third of small and medium-size enterprises declare growth as their basic goal. Overcoming this paradox is a basic aim of the Commission’s action program. «Europe needs more businesspeople to improve our lagging competitive performance,» said Commissioner for Enterprise and Information Society Erkii Liikanen. The report notes that, on the whole, European firms grow at a very slow pace after starting up; the average firm employs six people, three times less than in the US. The fastest growing firms – the so-called «gazelles,» which can make major contributions to growth and employment – are still rare in most EU countries. This gap is projected to grow due to an aging population. One-third of the heads of family businesses are expected to withdraw in the next 10 years and most are unlikely to find successors as the majority of prospective businesspeople prefer to start up their own. Regarding Greece, the report notes with satisfaction recent initiatives for limiting red tape and that time spent on procedures for starting up a business has been limited from one month in recent years to about a week. Not as good investors In contrast to their entrepreneurial inclinations, Greeks as investors appear to be averse to high risks, preferring short-term deposits, according to the latest six-monthly results by Investment Barometer which covers Europe and the US. In a survey conducted via interviews with 1,250 people aged 18-24 between November 11 and 24, 2003, Greeks are found to be averse to regular placements in investment programs of medium- to long-term duration. This is largely attributed to a habit formed during the 1980s and 1990s, when double-digit interest rates prevailed. About 49 percent of Greeks declare that in future they will invest smaller or much smaller sums, while 36 percent say they will continue saving as in the previous 12 months and 15 percent see their investment outlays rising. The respective averages in Western Europe are 38, 45 and 15 percent.