In a recent, bold proposal, the European Commission is set to revolutionize the region’s start-up climate by launching ‘EU Inc’ – a new structure to facilitate the creation and growth of start-ups across the European Union. This initiative aims to streamline the cumbersome process faced by entrepreneurs, particularly in the realms of setup, scaling, and cessation.
European Commission’s Vice-President for promoting European Way of Life, Margaritis Schinas stated, “Our goal is to make the European Union the most attractive place in the world to launch and scale up businesses, thus contributing to the European Union’s economic growth.”
The plan entails the formation of a configural body, ‘EU Inc’, to expedite start-up set-up time to a mere three days, at a minimal cost not exceeding €100. It promises universality by permitting start-ups from anywhere within the EU to register online, thereby fostering cross-border mobility. The proposal also includes a streamlined process for closing businesses, reducing the existing complexity surrounding cessation.
This proposal comes as a direct response to criticism that the European Union, known for its innovative potential, lags behind other continents when it comes to fostering start-ups. The origins are typically centred on bureaucratic hurdles, cultural scepticism towards entrepreneurship, fragmentation across member countries, underdeveloped venture capital markets and the lack of a pan-European approach.
Delving into recent virtual discourse, the proposal has sparked an online frenzy. Supporters laud the initiative for its ability to foster a more business-friendly environment, potentially attracting commercial talent from around the globe. Conversely, sceptics argue that the new initiative is overly simplistic, failing to address more complex issues such as labour market reforms, tax incentives, and access to venture capital.
Global investors, such as Balderton Capital, are optimistic about the proposal. Suranga Chandratillake, a general partner at Balderton, stated, “This is a great step towards removing barriers to creating a single, competitive market in Europe.”
However, opponents like Pekka Viljakainen, Advisor to the Board of Directors at Skolkovo Foundation, voiced concerns about potential repercussions of the supposedly rushed three-days setup process. “Three days is too short to do proper due diligence on the founders…There are a lot of ‘smart’ people out there who might abuse this relaxation,” warned Viljakainen.
The ‘EU Inc’ proposal is an experiment that could pivot the evolution of Europe’s entrepreneurial ecosystem, especially considering the growing digital economy cultivated during the COVID-19 pandemic. Its success largely depends on the efficient implementation and procedural improvements of the proposed structure.
Based on the Commission’s vision, the start-up reform’s outcome aims at making the European Union an attractive global hub for unicorns- billion-dollar start-up enterprises. According to 2020 data from venture capital analytics firm, Dealroom, the EU contains only 13% of the world’s unicorns, significantly less than Asia’s 30% and North America’s 49%.
Creating a conducive start-up environment has global implications as well. With the potential to create jobs and stimulate economic growth, a thriving start-up ecosystem contributes to overall economic health and resilience, especially in post-pandemic recovery.
As the European Commission prepares to evaluate the proposal, what is certain is that the ‘EU Inc’ initiative represents a significant step in shaping the future of European entrepreneurship, impacting an estimated 25.1 million small and medium enterprises (SMEs) across the Union. How this proposal translates into reality remains to be seen.
The ‘EU Inc’ proposal, if successful, is not just a start-up facilitator, but a catalyst for innovation, growth, and prosperity in Europe’s digital economy. It will be interesting to witness the results and its broad interplay with the global marketplace in the coming years.
Original Source: https://www.personneltoday.com/hr/eu-inc-proposal-to-make-start-ups-easier/
