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Fail2Succeed Conference Report Speakers: ● ● ● ● ● ● ● ● ● ●

Simone Baldassarri, DG Enterprise and Industry, EC Mihaela Carpus-Carcea, Legislative Officer, DG Justice, EC Andrea Gerosa, Chief Thinker & founder of ThinkYoung (moderator) Tomi Huhtanen, Director of CES Sidonia Elżbieta Jedrzejewska, Member of the European Parliament Kostantinos Kyranakis, President of YEPP Michael Meissner, Vice President Corporate Affairs Europe, Amway Siegfried Muresan, Political Adviser on Economic and Social Policy, EPP Alessandro Niccolò Tirapani, Head of Research at ThinkYoung Pablo Zalba, Member of the European Parliament

Introduction: The conference “Launch of the Fail2Succeed Campaign”, hosted by the MEP Pablo Zalba and organised by ThinkYoung with the Centre for European Studies on 18th December 2013, kickstarted ThinkYoung’s initiative aimed at reducing the negative stigma towards entrepreneurial failure and harmonising bankruptcy legislation in the European Union (EU). The event constitutes the first stepping stone in a series of conferences to be held and policy papers to be published in 2014, which will attempt to influence both national and European legislation to be more encouraging of youth entrepreneurship. The campaign itself is based on the results of a research study conducted by ThinkYoung in the final quarter of 2013 which included a European youth survey and a documentary following the lives of young European entrepreneurs who have experienced business failure. In its previous experience, ThinkYoung found that the three factors which prevent the majority of young people from becoming entrepreneurs are: 1. Lack of education on entrepreneurship in Europe. 2. Excessive bureaucracy hindering the growth of youth entrepreneurship. 3. Fear of failure as a direct result of the punitive bankruptcy legislation and social expectations. The survey ThinkYoung has conducted a study among young Europeans to let them voice their opinion on entrepreneurial failure. As a result, we have found a tendency to instinctively associate negative words, such as “bad” or “disappointment”, with the word “failure”. A deep analysis of the data highlighted a striking gap between how failure is perceived at personal and at

social level. In fact, the former is positive (80% perceive failure as positive for personal development and more than 70% would give someone who failed a second chance) whereas the latter is negative (75% state that there are social expectations hindering the recovery after a failure and 62% claim their close entourage would not give them a second chance). This gap must be exposed: youngsters need to be aware that peers appreciate failure experiences. Coming to possible solutions of how to overcome the stigma, ThinkYoung proposals have been backed by the vast majority of respondents: from harmonising the bankruptcy legislation in Europe to promoting entrepreneurs as role models and to fostering entrepreneurial education. Only 10% of respondents experienced failure directly indicating that the less one is acquainted with something, the more one tends to have prejudices against it. Benefits of youth entrepreneurship The economic crisis in Europe has had a severe impact on young people in the form of high rates of youth unemployment and lack of job opportunities. Boosting entrepreneurship by providing a framework that rewards, rather than punishes business failure, is central to bringing Europe back on track and paving a way out of the crisis. A comparison with the United States of America illustrates clearly that Europe is lagging behind in terms of appreciating the positive value of failure in entrepreneurship. Entrepreneurial failure provides a learning experience which can enhance business capabilities and personal development. Moreover, there is a high level of risk aversion in Europe which is not only rooted in tradition, as well as in values and principles promoted in the family and education, but also due to the lack of reward for risk-taking. On the contrary, even when entrepreneurs take a risk and manage to succeed, they often face higher levels of taxation, regulation and bureaucracy. It is essential that this is corrected in order to create an environment in which young people are more willing to take risks. Even though it is a fact that many start-ups often fail, it is important to realise that entrepreneurship plays an important role in the economy and can lead to significant job creation in the long term. Financing entrepreneurship In order to support entrepreneurship it is essential to offer young entrepreneurs a safe opportunity to access money. In terms of accessing finance for new enterprises, young people need to be encouraged to seek funding from venture capitalists and business angels, rather than relying on banks to provide them with the necessary financing. Increasing the

availability of micro-credits and supporting crowdfunding platforms can also play a substantial role in advancing youth entrepreneurship. Harmonisation of bankruptcy legislation The European Commission echoes the importance of entrepreneurship in Europe and the need to tackle the stigma of failure and the existing negative consequences of business failure. The DG Enterprise and Industry acknowledges in the Entrepreneurship 2020 Action Plan that bankruptcy procedures need to be simplified and more encouraging for budding entrepreneurs. It is essential that the time in which entrepreneurs are affected by bankruptcy is reduced. For instance, it should not take more than three years for entrepreneurs to discharge their debt as the threat of long periods of continuous debt repayment can significantly discourage entrepreneurship. This should be accompanied by measures that aim at reducing the time it takes to restart a business, receive the necessary licenses and permits and settle bankruptcy procedures. It is elementary to liberate bankrupt entrepreneurs from their debt burden and obligations as quickly as possible in order to create conditions that allow them to get back on their feet again in a short period of time. Offering bankrupt businesses the opportunity to refinance and swap debt into equity can be effective and increase the chance of recovering money. Of equal importance is the necessity to introduce reforms that counteract the fact that in countries, such as Poland, bankrupt entrepreneurs often lose their social security. Role of education DG Enterprise and Industry and DG Education and Culture have recognised that education plays a key role in dealing with the stigmatisation and negative cultural perceptions of failure. Promoting creativity and entrepreneurship in schools can help create a protected environment in which pupils can “safely� fail and introduce a culture in which making mistakes is allowed and not penalised. Aside from the necessity of offering a space in which young people are free to fail, is it also important to create a setting that facilitates the development of new ideas and ultimately to establish institutions in which these ideas can come to life. However, the fact that education in the EU is the responsibility of Member States signifies that the European institutions have limited possibilities to influence curricula in schools. Nonetheless, the Entrepreneurship 2020 Action Plan intends to include practical experience in entrepreneurship in school, as well as to implement support structures for women, seniors, migrants, the unemployed and other potential entrepreneurs. Lastly, universities should focus more on inviting entrepreneurs to present themselves and to pass on their

experiences to the students in order to convey that entrepreneurship can represent a viable option for young people. Conclusion There is widespread agreement that the fear of failure embedded in our culture needs to be reduced as it constitutes a key obstacle to a growth of entrepreneurship in Europe. Yet, culture is not easily changed from one day to the next. It is therefore necessary to develop initiatives that foster entrepreneurship and contribute to overcoming the stigma of failure. ThinkYoung’s Fail2Succeed Campaign is purposefully attempting to be a catalyst for reforming bankruptcy legislation in Europe and for encouraging the European institutions to implement initiatives that support youth entrepreneurship, such as the Entrepreneurship 2020 Action Plan. Even though the European Commission’s Youth Guarantee programme strives to tackle youth unemployment by guaranteeing under 25 year olds employment opportunities within four months after completing formal education or becoming unemployed, there remains a need for a more sustainable solution which goes beyond this initiative. Europe needs both a change in cultural perceptions and legislation as youth entrepreneurship is key to economic growth and employment generation.

European Parliament, Brussels, 18/12/2013


We do this campaign to CHANGE the bankruptcy law for startups & small/medium enterprise in Europe. We want to CHANGE the cultural stigma of...