In 2004, the president of the Foundation of Economic Trends, Jeremy Rifkin, published “The European Dream”. In this book, he paints a picture that is a mirror image of the legendary American Dream. “Making it” in Europe is all about the community and quality of life, while in America it is about individual freedom and accumulation of wealth. He describes the European Dream as fostering a more conscious kind of entrepreneurship that is embedded in the community it serves and creates sustainable businesses. Because many predict a future of serious sustainability issues, Rifkin argues that the European ideal will outlast its American counterpart.
Europe has potential to make Rifkins’ dream a reality. With 507.4 million internal consumers, it is the third largest internal market in the world, after India and China. In terms of Fortune Global 500 companies, 160 of them reside within the EU, the number surpassing North America and coming second only to Asia. The inhabitants of the EU come from distinct cultures and speak over 100 different languages and dialects. However, each year 1.5 million people change countries within the region, creating an economic zone united in diversity. Approximately as many migrants come from third countries, mainly for economic reasons. This hopeful and active movement of labour creates an impression of many entrepreneurial dreamers searching for opportunity. However, 10 years and one big crisis later, how does a new business actually make it in Europe?
Even though the European Dream is an inspiring concept, the business environment and European mentality do not seem to foster entrepreneurial success. In 2012, The Economist even labeled European entrepreneurs “Les Miserables”. That is unsurprising, considering that the availability of venture capital has declined to half of what it was in 2008. According to the Global Entrepreneurship Monitor, in 2010, just 2.3% of Italy’s adult population were new entrepreneurs, in Germany it was 4.2% and 5.8% in France. Next to America’s 7.6%, China’s 14% and Brazil’s whopping 17%, the difference is shocking. In 2003, the European Commission issued a study, which showed that during the 1990s, 19% of mid-sized companies in the US were fast-growers, compared to an average of a mere 4% in six EU countries. Even though Europe’s big companies are more successful than American ones, many aspiring entrepreneurs go overseas in search of more business-friendly environments. For example, there are about 50,000 Germans in Silicon Valley, and approximately 500 start-ups, founded by Frenchmen, in the San Francisco Bay Area. The high-growth countries of Asia and South America are also lands of opportunities for Europeans. These statistics are indicative of less than desirable chances for business success in the old continent.
In light of this, the economic migration in the EU seems to be about safety and finding employment, not about risk taking and seeking entrepreneurial success. The European Parliament acknowledged these problems and has set targets for improvement to be achieved by 2020 together with an accompanying manifesto, backed by politicians such as Neelie Smit-Kroes and some of the EU’s most prominent entrepreneurs, such as Daniel Ek, the founder of Spotify. Coincidentally, the goals of the EU represent Jeremy Rifkin’s picture of the European Dream. The aim is to build a better entrepreneurial climate. While doing so, the EU wants to focus especially on the creative industry and tech-startups, since those are the areas where its highly educated and creative citizens really stand out globally. When looking at Europe’s most recent success stories, this indeed seems to be the best and most logical direction.
The creative industry
Like many business schools throughout Europe, in September 2013, the University of Amsterdam introduced an Entrepreneurship and Management in the Creative Industries Masters program. According to the description, “the creative industries range from theatres, museums and orchestras, to television production companies, music labels, industrial designers and computer game developers”. The European government agrees with the relevance of these industries for Europe. In one report, it stressed that EU entrepreneurs should capitalize on the regions’ trailblazer role in the arts and culture. Even though European theatres, museums and orchestras often rely heavily on government support, they do attract a creative international community.
Furthermore, there is business in creativity. The prime example of this is Berlin’s rapid international ascent as a leader in the creative industry. The city is filled with imaginative entrepreneurs and about half of business founders are not German. There are 2000 creative agencies based in Berlin. They bring together creative individuals from around the globe to cater to corporate needs. One very fast-growing example is Ming Labs, founded in 2008. Bringing together designers, moviemakers and website developers, they already have 50 clients in different countries as well as offices in Shanghai and Toronto. Another great example of Europe’s most successful independent creative agencies is the Dutch Media Monks, started in 2001. Over a period of 13 years, it grew from a group of 3 to a multinational organization. These are only a couple of success stories in the European creative industry and there is potential for many more entrepreneurs to create wealth out of artistic expression.
European creative industries thrive in the new millennium, but it is even easier to single out well-known success stories among tech-startups. Soundcloud, Spotify and Skype are a few big names that were born and raised in Europe not so long ago. The Estonian Skype has made global communication extremely convenient and accessible, while the Swedish Spotify and the German Soundcloud offer creative outlets, exposure platforms and revenue streams for various musicians. Spotify is said to be a legal alternative to the, also Swedish, Pirate Bay, supported by the government as part of a plan to build a society of tech savvy digital natives. With such political initiative and growing industry, the future looks promising.
Another interesting example is WeTransfer, a Dutch file-sharing site that operates from Amsterdam and that is increasingly used all around the world. While it is a tech firm, WeTransfer’s secondary goal is to give back to the creative community by collaborating with artists and using their work as wallpapers on their website, along with paid advertisements – their source of revenue. Recently the company employed what it calls a ‘culture hunter’ who resides in New York City and explores its vibrant art scene in order to inform WeTransfer on what he deems to be the ‘most exiting cultural work’ in the Big Apple. The brand is looking to employ a London-based ‘culture hunter’ early next year. ‘Design allows people to embrace technology – that’s why we embrace design’, says Nalden, WeTransfer’s founder.
How to make it in Europe
One word that comes to mind when looking at this eclectic bunch of fresh young companies is innovation. Whether the start-up is technology or creativity-based, or both, Europe’s expertise seems to lie in generating ideas. Surely, its highly skilled inhabitants have the potential to turn these ideas into real companies. The European government has already taken the first step by encouraging people to pursue business ventures in these strong areas. However, for the EU to realize its full entrepreneurial potential, the environment should become more attractive, making it a more serious investment area and stopping entrepreneurs from fleeing the nest. Arguably, European mentality is just as free as the work/play campuses of Silicon Valley and many cities have as much cultural ambiance as New York City. Aspiring entrepreneurs should take note, start dreaming and start creating.