Entrepreneurial behavior still lacks effective stimulation and support in Europe. Young people are very creative and if given stimulating resources, they have many chances to innovate and become successful business or social entrepreneurs.
In general, EU SMEs still have lower productivity and grow more slowly than their counterparts in the United States. In the US, surviving firms on average increase their employment by 60% by their seventh year, while employment gains among surviving firms in Europe are in the order of 10% to 20%. SMEs still face market failures undermining the conditions in which they operate and compete with other players in areas like finance (especially venture capital), research, innovation and the environment. For example, about 21% of SMEs indicate that accessing finance is a problem, and in many Member States the percentage is much higher for micro-enterprises. Also, fewer European SMEs innovate successfully when compared to large businesses. The situation is worsened by structural difficulties such as the lack of management and technical skills, and remaining rigidities in labour markets at national level (Source: Small Business Act, http://ec.europa.eu/enterprise/policies/sme/small-business-act/).
What should European institutions do in order to develop the innovative potential of young people?
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