Author: Francois
When we speak about the determinants of one country’s level of entrepreneurship, the first thing which comes to my mind is the state intervention. Indeed the state, with the aim of fostering entrepreneurship, can establish a more or less favourable entrepreneurial climate with for example a low rate of taxation, a flexible labour market or an easy access to capital.
But surprisingly, when we compare two countries such as France and the USA which both try to foster entrepreneurship through state intervention, it’s quite amazing to see that the results of those policies are very different. Indeed the USA have the highest rate of business ownership in the total workforce and the highest TEA (Total Entrepreneurial Activity) among the OECD countries with 10%, whereas on the opposite France’s TEA is lower at around 4%.
Thus the state intervention isn’t the only determinant of entrepreneurship, albeit it is very important.
So, what else can influence entrepreneurship? What else can drive people to start their own business?
Maybe it’s people themselves! Indeed one country’s culture can partly explain the level of entrepreneurship. Thus, if we still compare France and the USA, we can understand why there is such a different TEA. The US culture claims to encourage risk-taking. Failure is considered as a step for the success, whereas in France, the culture does not encourage risk-taking, and French are afraid of failure. A quite impressive figure confirms this: for 50% of French, the fear of failure is a barrier for starting a new business. Whereas in the USA, entrepreneurs are considered an important part of the economy’s foundation. In France they are not; they are even sometimes considered no better than thieves.
Finally, it emerges from this that even if the state intervention is important for determining the level of entrepreneurship, culture plays a huge role. Thus it can be interesting for France and its president Nicolas Sarkozy to think about trying to change the negative perception of entrepreneurship and entrepreneurs and be inspired by the American model where “entrepreneurship is woven into the fabric of North American Society” (Alison Morrison).
Monday, February 25, 2008
Sunday, February 24, 2008
Entrepreneurship and the academy
Author: Charles
According to Francois, entrepreneurship is partly explained by culture and I think that he offers a good example in his article to prove this trend: “the USA have the highest rate of business ownership in the total workforce and the highest TEA (Total Entrepreneurial Activity) among the OECD countries with 10%, whereas on the opposite France’s TEA is lower at around 4%.“ We find this same trend in the way entrepreneurship is taught in school. The teaching of entrepreneurship is not the same in France as it is in the USA, or for that matter in other countries in Europe such as the UK, Spain, Italy, Netherlands, and Scandinavia. According to Ingrid Verheula, Niels Bosmaa, Fonnie van der Nol and Tommy Wong, to create one's own business is encouraged earlier in the USA than in France and American teachers tackle this topic also at high school. In fact high school students have classes and projects about entrepreneurship. In France it is not true, French students begin to tackle the question of entrepreneurship only in the university or in business school. Moreover, this teaching varies depending on whether the student is in a particular component of the French education system. It emerges from many studies on this topic that the entrepreneurship teaching in France is not structured or only a few. Indeed it stays the most of the time the work of solitary teachers and without results on the students. Actually, the entrepreneurship’s teaching in France lacks recognition and it is not regards as real matter. So I do not know if you have the same opinion as me but I think that if we introduce as early as possible the entrepreneurship’s teaching in the education system, that will change student’s mentality, their aversion to the risk and we could see come out a whole new generation of entrepreneurs ready to create and to set up new businesses. What do you think about that?
According to Francois, entrepreneurship is partly explained by culture and I think that he offers a good example in his article to prove this trend: “the USA have the highest rate of business ownership in the total workforce and the highest TEA (Total Entrepreneurial Activity) among the OECD countries with 10%, whereas on the opposite France’s TEA is lower at around 4%.“ We find this same trend in the way entrepreneurship is taught in school. The teaching of entrepreneurship is not the same in France as it is in the USA, or for that matter in other countries in Europe such as the UK, Spain, Italy, Netherlands, and Scandinavia. According to Ingrid Verheula, Niels Bosmaa, Fonnie van der Nol and Tommy Wong, to create one's own business is encouraged earlier in the USA than in France and American teachers tackle this topic also at high school. In fact high school students have classes and projects about entrepreneurship. In France it is not true, French students begin to tackle the question of entrepreneurship only in the university or in business school. Moreover, this teaching varies depending on whether the student is in a particular component of the French education system. It emerges from many studies on this topic that the entrepreneurship teaching in France is not structured or only a few. Indeed it stays the most of the time the work of solitary teachers and without results on the students. Actually, the entrepreneurship’s teaching in France lacks recognition and it is not regards as real matter. So I do not know if you have the same opinion as me but I think that if we introduce as early as possible the entrepreneurship’s teaching in the education system, that will change student’s mentality, their aversion to the risk and we could see come out a whole new generation of entrepreneurs ready to create and to set up new businesses. What do you think about that?
Friday, February 15, 2008
European SMEs and their markets
Author: Jeremie
I strongly believe that SMEs have an important role to play in the European economy. In fact, they are a significant source of growth, jobs and innovation. The European Union seems to share my point of view as Erkki Liikanen, European Enterprise Commissioner stated in 2002: “SMEs are the backbone of EU economy”.
Thus how can the European Union create a friendly environment for SME?
The European Union has implemented many directives and recommendations to foster SMEs development over the past few years. In fact, the EU tries to improve the access to finance for SME, to reduce bureaucracy, to protect their innovation…
Regulatory environment aside, can SMEs not find useful help from large companies that used to be small?
SMEs face some difficulties in accessing markets because they are too risky, too weak and experience a lack of visibility. By offering a part of their contracts to SMEs, large scale companies and public procurement agencies could give a chance to SMEs that would like to grow, innovate and prove what they are able to do. This is called the 2005 European SME pact, first implemented in France.
This pact is directly inspired by the US Small Business Act which stated that a given share of public procurement has to be reserved for SME. Although the European SME pact is claimed to be more ambitious and broader than the American one, I think that it may have some weaknesses. The SME pact deals with large scale companies and public procurement agencies whereas the American Small Business Act only deals with the latter one. However, the American Small Business Act is mandatory and public procurement agencies have to offer a given share of their contracts to US SME. This is not the case for the SME pact which is based on the willingness of these two previous agents to offer contracts to European SMEs. So I think the US Small Business Act may be more efficient than the SME pact.
But for its second year of activity, the SME pact has seduced 30 French large companies and 1200 SMEs.
The monitoring of the impact of the programme is done though several indicators such as the number of contracts awarded by SMEs and SME share in the public procurement.
To my mind, these two ways of monitoring are quiet good and relevant as it will be easy to set objectives and compare the success of the SME pact over the years. The number of contracts issued by large companies and public procurement agencies and awarded by SMEs is easily accountable.
Only the next couple of years will let us know if the SME pact proves to be as successful as the American Small Business Act.
I strongly believe that SMEs have an important role to play in the European economy. In fact, they are a significant source of growth, jobs and innovation. The European Union seems to share my point of view as Erkki Liikanen, European Enterprise Commissioner stated in 2002: “SMEs are the backbone of EU economy”.
Thus how can the European Union create a friendly environment for SME?
The European Union has implemented many directives and recommendations to foster SMEs development over the past few years. In fact, the EU tries to improve the access to finance for SME, to reduce bureaucracy, to protect their innovation…
Regulatory environment aside, can SMEs not find useful help from large companies that used to be small?
SMEs face some difficulties in accessing markets because they are too risky, too weak and experience a lack of visibility. By offering a part of their contracts to SMEs, large scale companies and public procurement agencies could give a chance to SMEs that would like to grow, innovate and prove what they are able to do. This is called the 2005 European SME pact, first implemented in France.
This pact is directly inspired by the US Small Business Act which stated that a given share of public procurement has to be reserved for SME. Although the European SME pact is claimed to be more ambitious and broader than the American one, I think that it may have some weaknesses. The SME pact deals with large scale companies and public procurement agencies whereas the American Small Business Act only deals with the latter one. However, the American Small Business Act is mandatory and public procurement agencies have to offer a given share of their contracts to US SME. This is not the case for the SME pact which is based on the willingness of these two previous agents to offer contracts to European SMEs. So I think the US Small Business Act may be more efficient than the SME pact.
But for its second year of activity, the SME pact has seduced 30 French large companies and 1200 SMEs.
The monitoring of the impact of the programme is done though several indicators such as the number of contracts awarded by SMEs and SME share in the public procurement.
To my mind, these two ways of monitoring are quiet good and relevant as it will be easy to set objectives and compare the success of the SME pact over the years. The number of contracts issued by large companies and public procurement agencies and awarded by SMEs is easily accountable.
Only the next couple of years will let us know if the SME pact proves to be as successful as the American Small Business Act.
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