Europe not only has a euro crisis, it also has a growth crisis. That is because of its chronic failure to encourage ambitious entrepreneurs
Data show that continental Europe has a problem with creating new businesses destined for growth. According to the Global Entrepreneurship Monitor, which compiles comparable data across countries, in 2010 “early-stage” entrepreneurs made up just 2.3% of Italy’s adult population, 4.2% of Germany’s, and 5.8% of France’s. European countries are below—in many cases well below—America’s 7.6%, let alone China’s 14% and Brazil’s 17%.
Few in number, European entrepreneurs are also gloomy about their prospects. A study by Ernst & Young, an accounting firm, showed last year that German, Italian and French entrepreneurs were far less confident about their country as a place for start-ups than those in America, Canada or Brazil. Very few French entrepreneurs said their country provided the best environment; 60% of Brazilians, 42% of Japanese and 70% of Canadians thought there was no place as good as home. Asked which cities have the best chance of producing the next Microsoft or Google, Ernst & Young’s businesspeople plumped for Shanghai, San Francisco and Mumbai (though, to be fair, London got a look in too).