This Website uses cookies. By using this website you are agreeing to our use of cookies and to the terms and conditions listed in our data protection policy. Read more

Working Paper No. 1384

Improved Framework Conditions for a More Entrepreneurial, Innovative and Resilient EU

Working Paper
Elert, Niklas and Magnus Henrekson (2021). “Improved Framework Conditions for a More Entrepreneurial, Innovative and Resilient EU”. IFN Working Paper No. 1384. Stockholm: Research Institute of Industrial Economics (IFN).

Niklas Elert, Magnus Henrekson

In the wake of the Covid-19 crisis, the European Union must regain lost ground and create more favorable conditions for inclusive and sustainable economic growth. The best way to achieve this goal is by increasing the Union’s innovativeness. This effort requires extensive and broad-based institutional reforms aimed at strengthening the incentives for entrepreneurship.

Innovative entrepreneurship requires collaborations with numerous agents that provide those skills and resources that the entrepreneur is lacking: inventors, key personnel, demanding customers, and early and later-stage financiers.

Based on this ecosystem perspective, we propose reforms in the following six broad areas: (i) the rule of law and property rights, ii) taxation, iii) savings and finance, iv) labor market regulations and social security, v) entry and exit barriers in product markets, and (vi) human capital for entrepreneurship. The reforms would likely strengthen Europe’s innovation capacity at a time when it is needed more than ever.