European attitudes to entrepreneurship – still behind the US and in some cases going backwards

One of the reasons that I’m a venture capitalist is because there is a trend towards faster innovation happening in small companies.  Large corporations can’t comprehensively keep up with the pace of change any more, so startups have to pick up the baton, otherwise we won’t get the GDP growth we all want.  DFJ Esprit provides the money, but the most important ingredient in the mix (by far) is the entrepreneur and getting the right entrepreneurial culture going is therefore very important for the long term health of our economy.

So I opened this study on European Attitudes to Entrepreneurship with interest (thanks to Cedric Latessa for the pointer), and on balance what I found doesn’t make great reading.  Despite still holding a generally positive view of entrepreneurship over the last couple of years we Europeans have become less likely to be entrepreneurs and we hold those who have become entrepreneurs in lower esteem than we used to.  I suspect this is largely due to the credit crisis and economic collapse which has made becoming an entrepreneur more risky and hence less attractive, and has also made it less fashionable to want to go out and make a ton of money for yourself.  If I’m right about the credit crisis being the cause then these indicators should turn positive again over the next couple of years, but even so we should take it upon ourselves to promote a positive image for entrepreneurship, which after all is the increasingly becoming the lifeblood for our economy.
Here are a couple of highlights (or maybe lowlights) from the study:
  • All over the world people largely agree that entrepreneurs are job creators and that they develop new products and services which benefit the whole society.
  • the image of entrepreneurs has declined. 54% of all Europeans believe that entrepreneurs only think about their own wallet and 49% believe that entrepreneurs exploit other peoples work. In 2007 the values were clearly lower (45% and 42%).
  • In comparison with other professions entrepreneurs are considered in a rather positive way. 49% of all Europeans declare having a good opinion about entrepreneurs. Only the liberal professions (lawyers, doctors, architects etc.) enjoyed greater esteem (58%). Significantly lower is the regard for civil servants (35%), top-managers (28%), bankers (25%) or politicians (12%).
  • Only 28.1% of all Europeans think it feasible to start a business within the next five years (in 2007 the figure was still at 31.4%; in the US it has even increased from 43.5% to 48.7%.
  • The lack of finance has traditionally been the most important reason stated for this situation (24% of those sceptical about a start-up mentioned it).
  • The fear of bankruptcy is one of the largest obstacles for many people to start a business. Nevertheless 65% of Europeans declare that they are generally willing to take risks. In the US about 82% of those questioned are willing to take risks. Relatively risk-loving Europeans are Romanians and Irish (73%). Rather risk-averse are Hungarians (43%).
  • In the US entrepreneurs enjoy a good reputation. 73% of US citizens questioned in this survey said that they have a favourable image of entrepreneurs. In Europe at least about half of the population (49%) has a favourable image of entrepreneurs. In China the ratio is only 40%, in Japan and Korea even lower.