Towards a Knowledge-Based Economy: Can Europe Become a “Start-Up Nation”?

Written by | Tuesday, May 5th, 2015

It seems that the European Union has finally realized that the means to unlock economic prosperity in the future is by creating a high-tech knowledge-based economy in which creativity, innovativeness, and entrepreneurship will thrive. In order to drive industrial competitiveness and the development of the next-generation of software and mobile applications, Brussels has begun to massively support its brainchild project – Fiware (a contraction of the words “future Internet”) – created already in 2011. The block is going to invest 80 million euros in as many as 1,000 start-ups via so-called accelerators – entities that will help start-ups get funding.

It is truly great news for the European economy that “authorities out there” have finally discovered what characterizes the economy of the future. Instead of mulling about job creation, they have started supporting those who come up with innovative ideas and who will ultimately create jobs. Now, the biggest dream of EU Digital Economy Commissioner, Guenther Oettinger, is that next Facebook will come from Europe.

Although Fiware has been criticized by many as a superfluous venture, I think that it signals a very important and positive change in the EU’s mindset. It signals a gradual shift from “traditional employment” to a more dynamic, creative, and innovative way of job creation. After all, one’s career is no longer a ladder that we try to climb one step up but it is sort of a jungle gym, as Facebook COO Sheryl Sandberg writes in her famous book “Lean In”. In that jungle gym, we no longer climb up in a hierarchal career system but we rather learn new skills across various processes, departments and even industries. The new labor market requires new set of skills, quick learners and change-adopters. Unfortunately, Europe’s labor market is still mostly in the phase of the ladder.

This is not to say that “traditional” employers, such as big corporations, consultancies, banks, and factories, will not exist anymore, but their influence in the labor market will only simply diminish while the clout of more innovative knowledge- and data-based companies will grow. While EU’s financial and logistical support for start-ups is surely very important, I think what is even more important is to gradually shift the whole “system” towards a sort of a “start-up mindset”. This means to gradually start implementing changes and tweaks to the whole chain of processes and institutions leading towards an innovative economy – education, social and welfare policies, labor market, and law.

However, it is not enough to only provide funding for newly established start-ups. The EU must also focus on other elements that lead to the creation of new ‘new-age’ businesses. First, education systems throughout the continent should reflect more and more the needs of a knowledge-based society. IT classes should expand already during the early stages of the education process, while university programs in computer science, engineering, and mathematics should be supported and promoted as well. On top of this, amendments to (the culture of) Europe’s labor market laws must be made so that these reflect the “casual” business style of most start-ups.

By “casual” I mean things such as more flexible working hours, part time contracts, freelance deals or home office. Employers that offer such “prerogatives” should be supported in various ways just like those who create the environment that enables employees to balance their work and life and motivate working parents to return back to work. With more and more start-ups becoming employers of significance, the labor market will become more flexible and adaptable, which will ultimately create also more competition among employers themselves to get the best talents out there because salary will no longer be the only “perk”.

EU’s recognition of the rapidly growing importance of a high-tech and knowledge-based economy as well as its support of entrepreneurship are both very important but still not enough. In order for Europe to find itself on top of the “the hottest places to set up a start-up” list, Europeans must gradually adjust to the fact that “traditional” ways of employment are waning and also that the new economy requires not only new and diversified sets of skills but also new ways of working and keeping work-life balance.

Article Categories:

Leave a Comment

Your email address will not be published.