Innovation capabilities in the European Union influence the

Innovation capabilities in the European Union influence the Competitiveness Divide 1 Global Competitiveness Index 2013 -2014: overall rank and innovation score 6 3 32 52 48 15 28 8 10 17 22 23 49 51 42 4 46 78 16 63 62 75 76 57 35 91 Innovation score: 0 -3. 5 -4. 0 -4. 5 -5. 0 Overall rank is shown on each country (lower is better) 1. Source: The Global Competitiveness Report 2013 -2014, World Economic Forum >5. 0 41 58 06. 2014/46975 d 1

European entrepreneurs struggle to achieve sustainable growth 8 out of 10 jobs generated in the European Union since 2008 were created in small and medium-sized companies 1 While the number of micro companies in the European Union has increased by 370, 000 (2%) between 2008 and 2013, the number of small and medium or large companies has not grown 1 (in 1, 000 companies) +2% 19. 026 18. 656 Micro (0 -9 employees) 2008 Ideal path of development -1% 0% 1. 374 1. 363 Small (10 -49 employees) Medium (50 -249 employees) 0% Large (250+ employees) 2013 1. Eurostatistics on enterprises on the European Union 06. 2014/46975 d 2

A life cycle model of entrepreneurship allows us to assess entrepreneurial needs and challenges in different phases Individual factors Stand up, Start up, then Scale up – life cycle phases with influencing factors Phase: Focus area: 1 Attitude 2 Improve access to capital for business foundation Cultural framework Scale up Start up Stand up Promote starting a venture or join entrepreneurs 3 Skills Identify and realize mutually beneficial partnerships Ecosystem factors Serial entrepreneurship Source: Project team 4 Regulatory framework 5 Market framework 6 Network access 06. 2014/46975 d 3

STAND UP: Fostering an entrepreneurial mindset and culture across the continent 45% of Europeans say it never crossed their mind to start a business 1 1. Entrepreneurship in the EU and beyond, European Commission 06. 2014/46975 d 4

START UP: Supporting the establishment and initial expansion of innovation-driven ventures 79% of Europeans say it is difficult to start one’s own business due to a lack of financial support 1 1. Entrepreneurship in the EU and beyond, European Commission 06. 2014/46975 d 5

SCALE UP: The collaborative road to sustainable growth 69% of companies do not achieve unbroken record of revenue growth in years two to five of their existence 1 1. Global Entrepreneurship and the Successful Growth Strategies of Early-Stage Companies, World Economic Forum 06. 2014/46975 d 6

1, 132 participants have contributed to the project survey Overview on demographic information (1/2) Participants by region (%) Other Northern Europe (NE) Southern Europe (SE) Germany, Austria, Switzerland (DACH) Central and Eastern Europe, Turkey (CEET) Western Europe (WE) The Forum partnered with Research+Data Insights, Junior Achievement-Young Enterprise (JA-YE) Europe, and the European Confederation of Young Entrepreneurs (YES) to survey a broad range of Europeans with experience or interest in entrepreneurship Source: Project team 06. 2014/46975 d 7

Overall conditions were perceived best for the stand up phase, and most critically for the scale up phase Perception of conditions per phase of the entrepreneurial lifecycle (%) 1 1 2 30 30 54 52 37 No opinion Very unfavourable Somewhat unfavourable Neutral Somewhat favourable Very favourable 41 Stand up Source: Project team Start up Scale up 06. 2014/46975 d 8

Splitting the results by region shows significant differences in perceived conditions Perception of conditions per lifecycle phase and region (% of somewhat favorable or very favorable answers) Stand up 80% Southern Europe Central and Eastern Europe, Turkey Se pre rial ne entr urs ehip Western Europe Northern Europe Germany, Austria, Switzerland 0% Scale up Source: Project team Start up 06. 2014/46975 d 9

Respondents see great potential in a network of initiatives and important potential in improved collaboration of actors Agenda to foster innovation-driven entrepreneurship: connect and develop Connect: Importance of setting-up and developing a visible, inclusive network of public and private initiatives designed to support entrepreneurship across Europe (%) 1 Partner: Potential to improve collaboration between entrepreneurs, universities, large companies and academic institutions within your country (%) 1 2 89 No opinion Source: Project team Not at all important Not very important 3 80 Neutral Somewhat important Very important 06. 2014/46975 d 10

There is strong willingness of entrepreneurs to support the ecosystem which needs to be translated into action Personally, in order to foster entrepreneurship I would be willing to engage in the following action this year (%) Raising awareness of entrepreneurial success stories that potential entrepreneurs can relate to and be inspired by Stand up Tailoring the education curricula in schools and universities to focus on the skills that entrepreneurs require Providing more opportunities for potential entrepreneurs to obtain practical experience in an innovative business or start-up Providing mentoring to new founders Start up Supporting entrepreneurs to access skilled employees to join their ventures Helping private investors "unlock" capital in Europe and direct it towards venture markets Creating more opportunities for entrepreneurs and large businesses to network Scale up Creating more transparency about what new ventures and established businesses are looking for in term of potential partners Improving access to tools and training on how to partner between large businesses and entrepreneurial ventures Source: Project team 06. 2014/46975 d 11

Three approaches can help build momentum and foster innovation-driven entrepreneurship Overview Focus • Ensure that the voice of entrepreneurs is heard by policy makers: showcase needs and opportunities • Set explicit criteria for identifying momentumbuilding initiatives and promoting them in ways that increase the transparency of entrepreneurship-supporting activities across the region • Highlight less-known entrepreneurial success stories and peer-level role models Source: Project team Connect • Develop a transparent, inclusive Europe-wide database and network of initiatives for entrepreneurship • Make corporate investors aware of the portfolios of Venture Capital investors and innovative companies therein • Encourage sharing of ideas and approaches across organisations promoting entrepreneurship Partner • Share best practices among entrepreneurs, academic institutions and market leaders on how to collaborate • Experiment with and track emerging models of cooperation between large corporations and start-ups, creating success stories and spreading them in a “race to the top” 06. 2014/46975 d 12

The new project phase on Open Innovation will broaden the scope to collaborative innovation in ecosystems Overview Centralized inward looking innovation Externally focused, collaborative innovation, e. g. between entrepreneurs and large corporations Ecosystem centric, crossorganizational innovation Closed innovation Open Innovation Networks Source: Project team 06. 2014/46975 d 13