After five years of economic downturn, Europe is suffering its worst jobs crisis since the 1930s. How to change that was one of the key issues discussed at the World Investment Conference Europe in Strasbourg.
Started a decade ago in the French resort town of La Baule, this year the event moved to Strasbourg, but maintained a high turnout – around 500 corporate and political leaders, entrepreneurs and investors.
On jobs, Gunter Verheugen, the former EU Enterprise and Industry Commissioner, told euronews that Europe must clarify its priorities: “We need, first of all, a realistic analysis of the weaknesses and shortcomings which we have; secondly we need to analyse the question of what institutional, political and economic changes are needed.”
One of the region’s major economic weaknesses is a lack of growth by small and medium sized businesses – which make up 99 percent of all European companies.
SMEs provide two thirds of employment in the EU and contribute almost one in five new jobs.
But many lack access to finance to grow and, despite state intervention, getting banks to loan them money remains a challenge.
So businesses are using alternatives to the traditional funding models, with some entrepreneurs even restoring to borrowing on a credit card, or running a bank overdraft.
An alternative that is becoming more popular is crowdfunding, where money is raised by individuals, usually via the Internet, to support a new venture.
Oliver Gajda is chairman of the European Crowdfunding Network: “We have 23 million SMEs in Europe, and only 30 percent of those have a bank loan, and only 0.02 percent received venture capital [money]and even fewer get business angel funding each year. So there are large, large discrepancies between the companies we have and the funding sources available.”
Small companies say they do not need financial backing from governments or the EU, but rather fewer regulations and clearer guidance.
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