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Entrepreneurship is a key player when solving the European crisis

2020-05-19

The new book The Entrepreneurial Society – A Reform Strategy for Italy, Germany and the UK offers a unique toolbox for solving the innovation crisis in Europe. The tools might be even more relevant post-covid-19. Mikael Stenkula, IFN, is one of the authors.

– The book is unique as it is based on a multi-disciplinary research project (FIRES) where entrepreneurship and policies for entrepreneurship have been analyzed in a broad perspective. The conclusions are based on historic, economic, and legal conditions combining method and data across several academic disciplines, says Mikael Stenkula.

The book continues the work presented in The Entrepreneurial Society – A Reform Strategy for the European Union in which Niklas Elert and Magnus Henrekson, IFN, and Mark Sanders, Utrecht University, presented a plan for stimulating entrepreneurship in Europe. The FIRES project was launched five years ago intending to make Europe more competitive and innovative. Researchers from nine institutions in nine countries collaborated in this research project, presenting what measures are needed for the European Union not to lag behind.

The first book laid the foundation. In the new book, the method of analysis presented in the first book is applied to three countries, all representing three different types of economies: the United Kingdom, Germany, and Italy.

Mikael Stenkula emphasizes that the EU is not a homogenous entity, each country being unique with its history, culture, and traditions. This has created countries with different institutional frameworks and there is no one-size-fits-all solution to the innovation crisis.

The FIRES project started in 2015, at a time when the financial crisis was still looming over Europe. Today we are amid a pandemic with devastating consequences for lives, health, and economies. When asked how this crisis might affect the innovation climate and entrepreneurship in the EU, in the short as well as the long term, Mikael Stenkula replies that the short-term effects that are caused by political measures taken to protect people’s health, are damaging a major part of the business sector and many companies have already gone bankrupt. Many small and medium-sized enterprises are facing a dark future and we are only at the beginning of a larger crisis according to the forecasts of high unemployment levels and falling GDP reported about in media.

So what needs to be done?

– We need temporary support measures for companies that have gone out of business or are about to go out of business and the effort put into them by striving entrepreneurs has gone to waste almost overnight due to a pandemic beyond their control, says Mikael Stenkula. But the crisis is also creating new opportunities for creative entrepreneurs and innovators, according to Mikael Stenkula. Businesses that traditionally have been based on social interactions might change how they work; social distancing creates new kinds of business opportunities. And there are, of course, sectors that are benefitting from the crisis, a fact that is affecting Mikael Stenkula’s professional life during the crisis, teaching and lecturing digitally.

What kinds of measures need to be taken in the long term?

– The question is what the economy will look like post the covid-19 crisis. Will we be returning to an economy as it was before the pandemic or will our pattern of life and consumption be notably changed? The latter will require a change of the business structure. No matter what, rebuilding what is now being destroyed, or going through a major restructuring of the economy, will demand enormous entrepreneurial effort and knowhow, says Mikael Stenkula.

Are your models even more relevant today?

– When we started this EU project, the world looked very different compared to today. The UK was still a member of the EU and covid-19 was still unheard of. Our book was written in a different context and we were not trying to find solutions to a crisis caused by a pandemic. Having said that, entrepreneurship and innovation are critical for an economy to develop and prosper. No matter how many countries are members of the EU and regardless of whether we are in a pandemic, says Mikael Stenkula and adds – I would almost say that the need for entrepreneurship is even greater once this crisis is over. Our book builds a foundation for how successful entrepreneurship policies can be adjusted to the unique conditions of each country.

 

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