It has been said many times that education is the silver bullet – it increases social mobility and makes the entire economy more competitive. European education systems currently lead the world, in 2006 86.8% of European school children received pre-primary education, compared to just 58.2% in the United States and public spending on education as a percentage of GDP was 5.03 for the EU, compared to 4.85 for the US and 3.52 for Japan. Despite this, one in five European 15 year olds lack basic reading and writing skills, and the Commission has recognised that digital literacy must be improved for Europe to move to its stated goal of a “knowledge economy”.
A Europe that improves educational opportunities for all will be stronger and more united. Education is a fundamental requirement for real citizenship and for participation in society as general education levels increase. Currently, too many families and children are left behind without the freedom that education bestows. At Stronger Europe we believe that there are a few fundamental things that Europe could do to increase education levels, and therefore the competitiveness and strength of our economy.
To start with Europe should publish education courses – across all school and adult learning years or “from the cradle to the grave”, online in the languages of the European Union. This European e-academy would for the first time in human history result in a truly open learning platform. Individuals would have almost unlimited access to any educational resource they wanted for free. This is not intended to replace normal schooling, but would be able to complement it and give children and adults access to quality learning materials regardless of the quality of their local school or their family income. Aspreviously suggested, the e-academy should include business education resources (such as basic accountancy and marketing principles) to improve the link between education and business. This would simply make it much easier for those in education across Europe to move straight into an enterprise and entrepreneurship.
In addition, Europe must make priority areas of study – science, technology, engineering and mathematics (STEM) more appealing to young people. These subjects truly drive the cutting edge of our economy, and are unfortunately declining in popularity a trend that must be reversed through increased availability of scholarships for those subjects and by engaging children at an early age in science. One way to do this would be to increase funding to the European Space Agency (ESA) and allow it to do more outreach programmes in an effort to capture the imagination of young people across the continent in the same way that NASA has in the United States.
Finally, digital literacy and access to broadband would have to be increased, and, as mentioned, the European Commission is currently working towards this. We believe that computer science should be taught to European children from an early age, and access for adults to learn should be increased. It teaches logic and provides the skills needed for Europe’s digital economy to grow.
Our proposals to improve education in Europe are:
- The creation of a European e-academy of online, free, educational resources and classes to revolutionise the way people learn and to dramatically increase access to quality learning materials
- Teach computer science in classrooms with children learning about the technology that shapes our economy and society from an early age
- Improve the link between businesses and education with free business classes being available online at the e-academy and lifelong training available for people currently in employment
- Increase the number of students entering STEM subjects by increasing scholarships and funding organisations like the ESA to improve their outreach programmes
What do you think?
Apple, Google, eBay… Those company names are instantly recognisable and have one thing in common: they were founded in Silicon Valley, California. These firms have created significant wealth for the United States in terms of employment as well as tax revenue and cultural influence. Why have all of these start-ups been created in the same place? And to which extent can a similar environment be created in Europe?
There is no single factor behind Silicon Valley becoming an entrepreneurial Mecca but rather a collection of different ingredients. To start with, California plays host to many of the world’s best universities including Stanford and Berkeley which are the engineering powerhouses providing the technical innovation at the roots of most start ups in the region. On top of having talented students and researchers, these institutions have mastered a culture of commercializing research breakthroughs. Then, Silicon Valley also boasts a unique concentration of financial capital as well as legal expertise tailored to the needs of technology start-ups and providing them with the environment they need to grow fast. Finally, talented and experienced engineers and entrepreneurs are clustered there, providing the necessary workforce in terms of technical and management skills to the companies created in the area. All together, those ingredients form a unique ecosystem enabling research and ideas to be turned into successful fast-growth companies substantially contributing to the US economy.
Replicating the Silicon Valley is difficult if not impossible considering the many historical circumstances that paved its development. As Babson College professor Daniel Isenberg puts it, “even Silicon Valley could not become itself if it tried today”. However, there is no doubt that if Europe plays with its strengths it can easily create tremendously successful entrepreneurial ecosystems across the continent. Actually, the seeds of very strong entrepreneurial hubs are already visible in Europe. Denmark is often celebrated as a growing force in the greentech entrepreneurship sphere. Similarly, the Shoreditch district in east London is a rising star of the high-tech sector which saw its number of start ups jump from 16 in 2008 to 340 today. But how can those local examples be grown and sustained as well as replicated across Europe?
The European Commission has already taken steps towards spreading this type of local successes across the continent. It is currently under the process of establishing a European “passport” enabling venture capital funds, which are specialized in providing money to start-ups, to operate cross-borders without having to register their business multiple times in the different member states where they are active. This step is necessary to bring the different entrepreneurial ecosystems across Europe together into a stronger network of financial capital.
However, at Stronger Europe we believe that much more is required to be done for those success stories to reach a critical scale and spread across the continent. Indeed, creating an entrepreneurial revolution is not just about making financing easier but rather about building local entrepreneurship ecosystems that grow and connect together.
We believe European policy makers have a key role in achieving that by:
- Making enterprise and intellectual property registration requirements uniform and as simple and fast as possible across Europe so as to lower the barrier to the establishment of start-ups.
- Unifying business regulation as a whole across Europe so companies can operate across the continent without having to have a large legal team to interpret laws across 27 countries, as is currently the case.
- Unlocking the 27 billion euros worth of public sector data available across Europe in order to provide small companies with market visibility.
- Developing a framework incentivizing and providing support to researchers under European funding to turn their academic breakthroughs into start-ups. Efforts should first be concentrated on specific research hubs and then replicated. Former entrepreneurs and the private sector should be involved in this initiative from the start.
- Pushing for students to be taught the accounting and finance basics required to start a business as early as high-school and incentivise the employment of young people in small businesses.
- Developing a European online portal enabling start-ups to be registered and providing them with support and services such as mentoring schemes and online business classes among other things.
What do you think?
As stated in our previous policy proposal, the best way for Europe to gain strength and avoid recession is a stimulus package to create growth and jobs to make Europe’s next decade a prosperous one.
This growth needs to come from a number of places. There are still huge gains to be made from completing the single markets in services, digital, and energy, and the Commission is making steps towards doing this, but these need to be sped up. Regulation needs to be further simplified and unified across Europe so that the barriers to businesses exploiting the single market are lowered. On top of this Europe look to strengthen its presence at the WTO to increase world trade, allowing Europe’s exporters greater access to foreign markets.
These are not sufficiently significant changes though. In a mature European economy the only way to create real, solid, long lasting growth is to encourage innovation. Indeed, technological advances allow incomparable increases in wealth and living standards.
Europe must ensure that policies are in place now to encourage innovation and build on our strengths in this area. R&D spend needs to increase as a percentage of GDP, and our research base must be increasingly supported by both public and private money. We need a better venture capital culture, so that innovative companies can get the funding to flourish. We need to improve the infrastructure that innovation relies on, such as broadband networks and Europe’s higher education system.
Innovation is not enough. For Europe’s economy to be truly viable in the long term Europe needs to manage its resources in a sustainable way. In order for this to happen Europe needs to internalise the externalities in our economy by attaching the right price to them. We already have the EU Emissions Trading Scheme, but this should be strengthened significantly and replicated to cover other externalities.
Over the next few articles we will develop these ideas with articles on all aspects of European growth.
A stronger Europe needs sustainable growth, and a stronger Europe needs innovation.
What do you think?