An “Entrepreneur-Driven Innovation Ecosystem (EDIE)” can help shift Europe’s early stage entrepreneurial activities toward a model of dynamic and systemic intervention led by value-seeking entrepreneurs as disruptive change agents.
Entrepreneurship is vital to growing markets. And across most of Europe, entrepreneurship is lacking. In 2013, the Global Entrepreneurship Monitor found that early stage entrepreneurial activity was less than 6% of the population between the working ages of 18-64 in Greece as well as in the four largest economies in Europe—Germany, France, Italy, and Spain. By contrast, BRIC countries and the United States each ranged between 10%-17% in early state entrepreneurial activity. Early stage activity is defined as either actively setting up a new business or owning and managing a new business for less than 42 months. The paucity of entrepreneurship and substantial investment in innovation among countries in Europe highlights the urgent need for European businesses and governments to work together to develop a new entrepreneurial innovation model to tackle financial deficits, create financial stability, and pull Europe through future crises. This new system can be thought of as an “Entrepreneur-Driven Innovation Ecosystem (EDIE).”
In order to create a greater push of innovation within Europe, the EU needs to shift its core understanding of entrepreneurship away from a profit-driven model and toward a model of dynamic and systemic intervention led by value-seeking entrepreneurs as disruptive change agents. In this ecosystem, entrepreneurs convert ideas into innovations that break open and redefine entire spaces in the economy, enabling existing blue chip corporations to follow into these new and enlarged markets with greater growth expectations. Entrepreneurs as disruptive change agents are different from small business entrepreneurs because they have a different modus operandi: rather than seek merely profit, they actively seek to identify market failures and create value that establishes a new market and overturns existing networks and structures in large enterprises. One classic example is of Henry Ford and his Model T automobile. It was the lower cost, mass-produced version of the automobile, not the invention of the automobile, which upturned the standard mode of transportation of the time, the horse-drawn carriage. Europe needs this special breed of entrepreneurs because they help create disruptive innovation and economic resilience by offering new growth potential where old growth has slowed.