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07 April 2015

Light at the End of the Tunnel 

The latest Global Entrepreneur Indicator, a twice-yearly survey conducted by the international non-profit group Entrepreneurs’ Organization, points to improving times for business owners everywhere, with the vast majority reporting creation of new full-time jobs, rising profits and easier access to capital.

Europe’s results are upbeat too, but the mood remains less buoyant than in other parts of the world.

The survey, based on interviews with nearly 6,000 entrepreneurs in 42 countries, suggested that respondents are becoming more willing to launch new businesses. Overall, 83% of participants expect their country’s current economic environment to improve or at least stay the same. However the figure for Europe was 78%, compared with 99% in South Asia and 93% in the US.

This chimes with the European Commission’s Business Climate Indicator for March, which shows a meaningful improvement in business confidence since the start of the year. Still, confidence levels in the EU remain below those seen in 2010 and are significantly worse than before the financial crisis.

The Commission’s most recent small business survey indicates that lack of access to finance was still a concern as recently as last November. There are signs that the European Central Bank’s launch of quantitative easing may be helping to stimulate funding flows to small businesses, but it remains early days – the asset purchase program only began on March 9 – so it’s perhaps not surprising that confidence has yet to catch up.

Together, these surveys paint a generally positive picture for European entrepreneurship, however tentative. They suggest that many of the problems that have held back entrepreneurs since the financial crisis – for example funding issues and unwillingness to invest in staff – are slowly starting to correct themselves. If so, a revival of entrepreneurship should itself represent a welcome fillip for economic growth throughout Europe.