One of the greatest challenges Europe currently faces is rising unemployment. This problem particularly affects Europe’s youth. There have been many calls for unity and an effort to create solutions for job creation in the face of Austerity measures which cut public sector funds. While there is agreement that job creation is a top priority there are not many solutions proposed or enacted. Furthermore the existing proposals are very often top-down measures.
The greatest resource we have in Europe is our people and their creative energy. Rather than trying to impose solutions for job creation from above and looking to large international corporations to build new factories or offices; we should in fact be looking to ordinary Europeans. Government at all levels needs frankly to get out of our way and let us create our own solutions. Government should support our Entrepreneurial talents to solve both business and social problems.
Small and Medium Enterprises
When a new factory or office is opened by a large corporation it makes headline news because of the quantity of workers employed. It also makes headline news when a factory is closed. While these events might have profound effects on a local town, this kind of job creation is not the base of our economies. The majority of people in Europe are employed by small or medium businesses (SMEs). These are businesses with fewer than 250 employees and less than 50 million Euros in annual turnover. Many of these will be micro-enterprises with fewer than 10 people.
It is SMEs that we should be supporting and can be done easily by simply removing all the unnecessary costs and bureaucracy from their path. I am happy to report from Vienna that there will soon be a change to the business laws in Austria that will remove a lot of bureaucracy from the path of Entrepreneurs here and reduce the cost of starting an Enterprise.
Austrian legal reform
The legal change will mean that the costs to starting a limited company (GmbH) in Austria will fall significantly, mostly due to one key reform which will see a decrease of the minimum required stock capital from 35,000 to 10,000 Euros for a new business. To clarify, this is not funds to invest in the business; it is merely a government requirement of how much money has to be sitting in the bank. So for example, if you need 50,000 Euros to open your small locally sourced Organic Lemonade Cafe, you have to currently find an additional 35,000 Euro in cash or assets committed to the business and its creditors just in case it fails. So how does an unemployed graduated who does not have rich parents and no credit rating (due to having outstanding student loans) find that start-up cost in addition to persuading investors to give her 50,000 Euro to actually make Lemonade?
Incentive for the mitigation of governmental intervention
If we can lower, across Europe, the costs and bureaucratic hurdles that anyone of us faces to start a small business then we can very quickly cut into the unemployment numbers. Even if, in my example the little Lemonade Cafe, employs just two other unemployed graduates that is three people in total not having to claim welfare benefits, gaining valuable work experience and adding to our economies. And who knows, maybe those two employees learn a great deal from the owner, see how easy it is to work for yourself and create businesses themselves. Imagine this across thousands of small businesses and across all industries like technology. So that a young engineer recognises that he doesn't have to sell his soul for the job at the huge multi-national. He could instead already open his own creative Start-Up building the next big thing. Steve Jobs started Apple in his garage. Maybe if government at all levels got out the way, we would see a lot more start-ups becoming major employers here in Europe and a lot less youth unemployment.
When life gives you lemons, make lemonade!