Enterprising spirit springs back in Europe

Europe has rediscovered the entrepreneurial spirit. For decades many Europeans have tended to feel that those who started and ran their own businesses were somehow less than fully respectable. The ideal for many was to spend their working lives in virtual civil-servant status in the employ of a large company -- in many cases one tracing its roots back to the Industrial Revolution of the 19th century, a period when Europeans did establish new businesses.

But this concept of ``lifetime employment'' is changing. In their general stagnation over the past few years, Europe's economies have been particularly weak in their ability to create jobs. The price of economic survival for some industries has been rationalization and continual whittling away of jobs.

And so Europe's gaze has been drawn over to the other side of the Atlantic, where the entrepreneur starting a firm in his garage -- or his parents' basement -- has become solidly established as a national folk hero.

Governments both right and left have been seeking ways to fan the entrepreneurial flame; one has the feeling that if it didn't exist, they would try to invent it. But there is broad agreement that Europe is experiencing a real upturn in new business formations such as has not been seen since the immediate postwar years.

This trend, especially noticeable the past couple of years, encompasses virtually all of Europe. Business start-ups in Britain, for example, rose 12.5 percent, to 150,000, last year over the before; Italy's growth was 25 percent, with 255,000 companies having been launched.

Germany is part of the trend, too, and West Berlin has been one of its prime beneficiaries.

It could not have happened to a city that needed it more. Despite its preeminence as a cultural center, West Berlin has been troubled in recent years by a declining industrial base, an aging population, and limited opportunities for its young people, with attendant difficulties such as drugs and political unrest.

``We saw unemployment continuing to climb,'' says Reinhard Baumgarten, an aide to the senator (minister) for economics and employment in West Berlin's city-state government. ``And we saw that the graduates from our universities would not necessarily find positions in the civil service, or in big companies like Siemens. We looked at the Silicon Valley model and said to ourselves, `We've got to try something similar.' ''

What they have tried is the Berlin Center for Innovation and New Enterprises, known by its German acronym, BIG. Modeled roughly on the research parks of the United States and Britain, BIG, established Nov. 30, 1983, has had start-up firms moving in as fast as space can be made ready for them, Mr. Baumgarten reports. (BIG is in an old factory, which is being renovated in stages.)

BIG is now home to some two dozen companies. Just a few minutes' walk from BIG is TIP, a technology park, which opened at the beginning of this year. Half of TIP is occupied by a research center owned by Nixdorf, the minicomputer-maker; the rest is intended for small, technology-based firms, as distinct from the raw start-ups at BIG.

Success with this kind of project is hard to measure precisely. But the developments at BIG-TIP must be seen against a larger background of economic turnaround in Berlin. Baumgarten, as a government official, naturally tends to identify this turnaround with the change of city government in 1981, when Richard von Weizs"acker and the Christian Democrats replaced the Social Democrats.

``Berlin used to have the highest unemployment in all of Germany,'' Baumgarten says. But now it has the fourth-lowest rate in the country, behind the industrial powerhouses of Bavaria and Baden-W"urttemberg and Hesse. ``And we're the strongest labor market in northern Germany,'' he says.

West Berlin's population is finally climbing again, after years of decline, and city officials are pleased to note that the increase is from Germans coming in from other parts of Germany, and not to immigrants -- a point of considerable sensitivity over the years.

And although Berlin appears unlikely to regain its status as headquarters city, it has developed a role as a good site for research centers -- as Nixdorf's presence at TIP indicates.

It should be noted, of course, that industry in West Berlin still gets considerable subsidies and bonuses -- incentives from Bonn to preserve Berlin as a technicolor island of capitalism amid the great grayness of East Germany.

But still, one consultant with no reason to be bullish agrees, ``It's true that there has been a turnaround in Berlin. . . . What they're doing is probably a sensible approach, subsidizing start-ups in the hopes of bringing an intellectual, engineering class into the city.''

Some of the developments that have encouraged the entrepreneurial spirit here are peculiarly German.

But some of the obstacles to new enterprises are the same all over Europe. The attitude toward employment is a major one. ``A view I've come across in Europe is that US companies hire more on a short-term basis,'' says a European Community official in Brussels. ``Most managers [of small and midsize businesses] in Europe would not want to think of taking on employees just to get rid of them in a month's time.''

This official adds, ``Social security costs are higher than in the US, and so that makes the cost of hiring someone a lot higher.''

A German official notes that in the public dialogue on encouraging new business, ``The labor unions tend to think in terms of government programs,'' rather than simply relaxing restrictions on entrepreneurs and letting market forces take over. This seems to be true, whatever the political stripe of the government.

Venture capital has been in short supply until only very recently. Tax and labor laws have not encouraged business formation.

And Europeans have hesitated to take risks. Bankruptcies and business failures are much more serious disgraces in Europe than in the United States.

Moreover, Europeans seem to have even more difficulty than Americans in combining business know-how with their technical expertise.

An Austrian official, explaining that her country, too, is starting to develop technology parks (``We're a bit late,'' she acknowledges, with a self-deprecatory laugh), adds, ``We have good technicians who have good ideas, but not always good business sense.''

Frieder Schuh, innovations consultant for the Chamber of Industry and Trade in Munich, plays down the ``entrepreneurial wave'' somewhat. ``New businesses give a certain impulse to industry -- they develop products that bigger firms buy out, for example.'' But they don't actually produce lots of jobs.

The consultant quoted above distinguishes carefully between entrepreneurship and job creation. ``It's too early to tell whether these new enterprises will really generate many jobs. It's something that may take 10 years or so.''

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