Europe’s a mess right now. Even Spain has been put on European tax payer life support and more countries could be in the queue for aid. Some falsely believe that the aid itself is something that would pull Europe out of the looming recession. But looking at things on a global level, we don’t believe Europe is as strong as it could be. Growing companies are the best way to help and we’re producing far too few of them on average.

Furthermore, the state of things in Europe regarding businesses isn’t too bright either. Fragmented national policies are not helping entrepreneurs opening businesses in multiple locations, nor is immaterial property legislation where it should be to help protect businesses from illegal use of their work.

For this Friday we thought it would be good to spark some office debates about the state of entrepreneurship and how people on the grass roots level could help to alleviate it if not solve it altogether.

In the recent years the Northern European region has received a lot of visibility for the actions many independent (meaning those without strong ties to the governments) organisations have taken.

Even an article on The Economist this morning referenced the region while talking about entrepreneurs with “with the odds so stacked against them, the flickers of enterprise seen in Berlin, London, Helsinki and a few other places offer cause for seemingly disproportionate hope.”

So there is hope, but what could we do together to push entrepreneurship further in different parts of the Nordics and Baltics?

Financial aid
For one, more money might not be the right solution. While venture capital is always too scarce if you ask entrepreneurs, there is actually plenty of it. No good enough one company that deserved it has ever gone without outside funding.

Governmental financial support is almost too big for tax payers to help with. Finnish politicians are looking for ways to cut direct corporate financial support in favor of tax breaks in other areas.

The European Union is just about to close its calls for proposals for its 7th Framework Programme that will give out some €8.1 billion in funding to organisations and businesses in the region. That’s a lot of money from just one source.

So governmental money might not be the problem, but the allocation of it is certainly closer to it. Then again, markets with working dynamics shouldn’t be having to rely on governmental financial aid.

Fragmented policy
Different legislation in almost all of the EU countries is something where simplification would be welcome. For example, bankruptcy laws are hugely different in all member states.

The Economist highlighted these same figures in their article this morning. Finland shines with 5 years of debt burden after liquidation of the bankruptee assets, the longest of any Nordic country. Sweden takes 2 years, Norway some half a year while
Denmark is quickest with just a couple of months, to set the entrepreneur free to try again.

An obvious question to ask in all this is, what do the governments win in keeping bankruptees in a limbo for 5 years?

Other issues are to do with taxation. Giving employees stock options to motivate them to stay with a cash stricken company is a common trait in Silicon Valley. In Finland for example, options are taxed as income as they are given, despite the fact that at that point there is no financial benefit to the recipient yet.

Naturally there are many more areas where policies aren’t as attractive as they could be to help improve conditions for entrepreneurs, but these are worth mentioning to start discussions.

Grassroots action
Perhaps the most important and the one with the most concrete results are actions by the independent, grassroots organisations. In Estonia Garage48 is helping bring entrepreneurs together as are student entrepreneurship societies in Finland.

We run ArcticStartup without any external financial aid, trying to constantly think of new ways to add value to the startup community.

Copenhagen’s Founders’ House just turned one year old and it was started by some eager local entrepreneurs who wanted to bring about change to the situation with startups working together.

All of these initiatives were started by individuals who wanted change. We’re certain there are other areas where individuals can help bring about change.

Motivating and inspiring high school students for example to understand the fun in entrepreneurship is one big opportunity that hasn’t been properly tackled in many places.

Call for discussion
If you had to name three things to fix to help entrepreneurs go big, what would they be? Also, do tell us in the comments how we, ArcticStartup, could help the region with our coverage and upcoming Arctic15 conference. We’re always open to new suggestions.

Then again, if you think that the European startup scene isn’t broken, do tell us that too.

Image by fdecomite.