Europe must embrace start-ups – or it will fail its young

Today’s young generation – Generation Y, the Millennials – is defined across the globe by optimism about its ability to make a difference to society and by its use of digital technology.

Thanks heavens for that because when European youth, in particular, look up from their tablets and their desks at school and university, their view is of a bleak labour market – from youth unemployment rates above 50% in countries such as Spain, to the situation I found myself in last month, when I had to let go a great young staff member. Why? Because the European Commission’s staffing system and budget constraints prevented me from renewing her temporary contract. We loved her work and wanted her to stay. Now, like so many others, this brilliant 29-year-old has two degrees but no job.

In an environment such as this, a cultural and legal system that is friendly to entrepreneurs is not a luxury, it’s essential. The ability to pursue your own business idea is of critical importance to these young people and to the future global economy.

Regulations and cultures that hold back or look down on entrepreneurs who are not immediately successful are flying in the face of a pressing economic need and the mood of a generation.

Generation Y is constantly online, from five hours a day in Africa to seven hours a day in Latin America. These young people believe they can make a difference if they are given the chance; 96% of them believe that technology increases opportunity, and nearly as many think it helps to find or make a job. As Christine Lagarde told the World Economic Forum in Davos, January 2013, this generation is open, inclusive and driving the world’s biggest trends.

So why are our laws so far behind? Why aren’t we open and inclusive of a start-up culture in Europe? That was the question in my mind when I asked nine of the world’s leading tech entrepreneurs to write a Start-Up Manifesto. Their words and ideas, not mine, are to be presented to European leaders at their 24-25 October Summit in Brussels.

The ideas are striking and urgent. Imagine a Silicon Network emerging across Europe if leaders could agree an EU-wide start-up visa. Imagine the dividends of large companies, alongside universities, providing free online courses to the general public.

The opportunities the digital economy presents are real. The app economy did not exist when Lehman Brothers collapsed in 2008. Today, driven by the mass adoption of smartphones and tablets, this market supports 800,000 jobs in Europe alone; most of them for young Europeans, including 300,000 software developer positions. And that is only 22% of the global app economy.

This is what is possible when we support start-ups, simply by giving them the freedom to innovate. Imagine what else is possible when we feed the market with more digitally confident people, with greater access to talent and capital, with consistent rules, and when we assure them the connectivity they need (whether through super-fast fixed Internet or 4G mobile networks).

The digital world is a source of identity and hope for our youth. With so many other pressures and uncertainties in the modern global economy, it is the role of leaders to make sure that young people are not denied digital opportunity. It starts with start-ups.

Read more blogs about entrepreneurship. 

Author: Neelie Kroes is Vice-President of the European Commission.

Image: A young woman looks at a wall of to-do notes in the office of a start-up at a co-working space in Berlin March 18, 2013.REUTERS/Thomas Peter