But what does entrepreneurship mean? To develop an innovation, introduce it to the market and have the ambition for the company to reach its full potential. According to Elert and Henrekson, more entrepreneurship of this kind is needed if the EU is to overcome its current “innovation emergency.”
– The European Commission says we need to be much better at ensuring that research and development lead to more and better products. But this is not enough to enhance growth and further European prosperity, says Magnus Henrekson. Entrepreneurship is needed in order to transform innovations into successful companies and generate growth. Henrekson notes that Europe is far behind the US and China in this respect.
This trend can be reversed. In their book, the researchers present 50 evidence-based reform proposals covering six policy areas to boost entrepreneurship in the European Union. An important balance throughout is preserving what works in Europe while keeping the door open for change. Niklas Elert compares entrepreneurship to immunology. When new players challenge existing companies, it's a bit like getting a cold.
– At first, you may be knocked out completely, but after a while, your immune system develops antibodies. You as an organism are ultimately stronger because you experienced this cold, and an incumbent firm facing a challenger may likewise become a better company. Being constantly somewhat challenged and forced out of your comfort zone makes you better equipped to handle any unexpected large shocks, be it in the form of the flu or the next big financial crisis, he says. An open economy with a lot of entrepreneurship will, therefore, be better prepared for economic shocks.