Compendium 2.1 Culture & conditions

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2.1 Building the culture and conditions for entrepreneurship

EQUAL has helped to change the mindsets and improve the conditions that allow under-represented groups to start a business.

People only turn to business advisers and banks when they are at least thinking about becoming an entrepreneur. However, the experience of EQUAL and many similar initiatives, is that the problem for many disadvantaged groups and areas starts far earlier on than this. For various reasons they may not even consider entrepreneurship as an option at all.

Entrepreneurship appears particularly difficult when communities have depended for a long time on traditional agricultural, industrial or public sector activities. Some EU Member States report that start-up rates are ten times lower in their worst performing areas than in their best. Similarly, certain groups may have little tradition of entrepreneurship and few positive role models to base their judgement on. The administrative cost and the risk of losing out in terms of taxes, benefits and other income can also act as a real disincentive. Approximately half as many women as men set up a business, and the proportion of self-employed young people and ethnic minorities is lower than that for the population as a whole.

On the other hand, certain ethnic groups have an extremely strong tradition of entrepreneurship. Similarly, the millions of Europeans who survive through some form of informal activity are practicing small-scale entrepreneurship every day. In France around 40% of the 300,000 businesses created each year are set up by unemployed people. They show that successful entrepreneurship does not depend primarily on formal education, class, gender or racial stereotypes.

In this context, strategies for improving business support and access to finance can only affect the tip of the entrepreneurial iceberg. Unless enough people want to become entrepreneurs in the first place, the banks and advisers will find themselves competing for a relatively small proportion of the potential field. So the long-term challenge is to develop strategies for changing both mindsets and some of the objective conditions that are necessary for opening up entrepreneurship in the formal economy to a far wider public.

To address the challenge of engendering cultural change, so as to encouraging entrepreneurship among the disadvantaged people to take a more entrepreneurial attitude to working life, EQUAL explored solutions in four areas. These are described in the four sections in this chapter: