TCS Daily

Enterprise 101

By Craig Winneker - February 25, 2003 12:00 AM

In Europe, where people are looking for any excuse to make fun of Americans, there's a story going around about President George W. Bush's first meeting with French President Jacques Chirac.

Seems Bush confided afterwards to British Prime Minister Tony Blair that the "problem with the French is, they don't have a word for entrepreneur."

Funny, yes, but not true. Though it conforms to a certain Yogi Berra image of Bush, the President never said any such thing. Still, even if he had said it I'd be inclined to give him credit at least for being ironic - something Europeans are reluctant to do for us Americans. And in fact there is an irony here, because under the original, Socratic definition of irony - a pretense of ignorance in order to make another's false conceptions conspicuous - the statement is actually not that far off the mark. For while the word "entrepreneur" does indeed come from and still exists in the French language - it means, literally, one who undertakes - the concept is an almost completely foreign one in Europe.

Want proof? Consult the European Commission's new Green Paper (it's actually white), entitled, "Entrepreneurship in Europe".

Included are such chapters as "What is entrepreneurship?" "Why is entrepreneurship important?" and "What does it take to produce more entrepreneurs?" One is tempted to add: Why is Europe just now getting around to issuing a primer on this most basic of economic phenomena?

To be fair (but only for a minute), it's good news to see the Commission taking entrepreneurship seriously. After all, it was just about three years ago in Lisbon that EU leaders pledged to create the "world's most dynamic knowledge-based economy in the world by 2010." They have repeated that phrase like a mantra ever since, but so far have produced very little in the way of actual results. In fact, the promise has become something of a joke on the Continent, where antiquated labor laws, astronomical tax rates, bizarre restrictions on retailing, stubbornly unopened markets in telecommunications and energy and other similar constraints have straitjacketed the economy for decades.

Still, making Europe a more welcoming place for entrepreneurs would be a great start. "Europe needs to foster entrepreneurial drive more effectively," the Commission declares in the paper, which is published as a basis for debate but is not yet a framework for legislation. "It needs more new and thriving firms willing to reap the benefits of market opening and to embark on creative or innovative adventures for commercial exploitation on a larger scale."

The paper recognizes the considerable challenges facing Europe as it tries to invigorate its economy. For one thing, there may be something of a mental block against free enterprise. "Entrepreneurship is first and foremost a mindset," the paper admits. Herein lies part of the problem, as Europeans have become so used to a social model that provides considerable labor protections that made more sense in late 19th-century mining communities than they do in the digital economy.

The report cites poll numbers from across the EU that show Europeans prefer employment to self-employment. Across the EU, 45 percent of people would prefer to be self-employed, compared to 67 percent of US citizens, according to the Eurobarometer survey.

This may be changing, however, with enlargement. The Central and Eastern European countries about to join the Union are proving to be hothouses for the entrepreneurial spirit - not surprising, considering that citizens there have just emerged from 50 years of the worst kind of job security. In Poland, for instance, after the fall of the Iron Curtain hundreds of thousands of new businesses sprouted up. The trend continues.

In places the report is surprisingly frank. "Compared to the US, there is less entrepreneurial dynamism in the European Union," it states. "Europeans are less involved than Americans in new entrepreneurial initiatives and European businesses do not grow as much as in the US."

The Commission suggests efforts should be made to "better exploit the job creation potential of entrepreneurial activity" by reducing administrative barriers, making venture capital easier to come by, and (gasp) lowering tax burdens.

Remember, though, this is only a Green Paper, and the Commission will now await response from various so-called "stakeholders". As part of that process, the Greek presidency of the EU held a special conference earlier this month in Thessaloniki to discuss Europe's entrepreneurial challenge.

Will all this debate and consultation turn to meaningful action to spur growth and free enterprise in Europe? Or can we expect more of the same old-fashioned economic stagnation we've seen before - prompting the question: do the French have a word for déjà vu?

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