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Netrepreneur Charles Leadbeater advises the British government on how to nurture a New
Economy in the Old World. His book Living on Thin Air was a big hit in Britain last year. Now, he's writing a paper on structuring a European entrepreneurial business model, which will be presented at the European Union's Lisbon summit in March. Leadbeater spoke recently with Business Week contributing correspondent Andy Robinson in London. Here are excerpts from their conversation:
Q: Is there really a New Economy in Europe?
A: There's a generational change. The under-30s in Europe are relatively entrepreneurial
and recognize they're part of a global business culture. But they are not just aping the
U.S.
Q: In what way do these young up-and-comers differ from their U.S. counterparts?
A: They're less commercial, more idea- and science-driven, less aggressive, and less
ambitious. But that doesn't mean they're not going to create interesting, job-creating
companies. Europe will be more like Silicon Alley than Silicon Valley.
Q: Explain.
A: Silicon Alley is about the combination of large and small companies. The key thing
isn't necessarily growth from scratch. The New Economy cluster around Nokia and Ericsson
is a good example. We're probably not going to create many Yahoo!s, Suns, or Oracles. We'll create more Infograms. By that, I mean medium-size, international high-tech firms.
Q: Does Europe have any advantages vis-à-vis the U.S.?
A: Europe has impressive knowledge-creating societies. They have a strong science basis.
These have great potential, although we're not making the most of them.
Q: So what's to be done?
A: You need much greater institutional radicalism. A single capital market for high-tech
venture startups, for instance. We need that kind of financial flywheel for an
entrepreneurial economy.
Q: A European Nasdaq?
A: Yes. Create a market for venture capital. The other thing is to change the political
narrative in Europe and replace it with a growth model based on entrepreneurship and
innovation. No more protected markets, national champions, and the rest of it. Europe
needs to develop a distinctive story about entrepreneurship and innovation. I'm thinking
of social renewal and regeneration as much as job creation. Not like Silicon Valley's
get-rich-quick culture. I'm thinking about creativity, learning, discovery, social value.
That's what the European story is going to be about.
Q: What's wrong with Silicon Valley?
A: Silicon Valley is fantastically impressive, but it has high costs as well. They suck
talent from the rest of the world. Only a few places in the world can do it. They also
completely lack any kind of public-policy capacity. So there are huge problems with
transport, education, crime, housing prices. Eventually, the region is likely to come to a
grinding halt. Silicon Valley is becoming, in essence, more of a metaphor than a place.
Q: Will Europe avoid those problems?
A: The big question for Europe is whether we have the entrepreneurial culture to make the
most of a great wealth of science, education, and knowhow. One would have to say in the
last 20 years, we have failed spectacularly. We haven't created any of the companies that
have made a lot of money out of the PC revolution or the Internet revolution. But if we get it right now, we'll have the chance to create an entrepreneurial model which is
inclusive. That would give us the same dynamism without the social cost of the U.S.
Q: By inclusive, you mean what?
A: Everyone helps to cope with the instability and change inherent in a more innovative
economy. The Finns are very interesting. They guarantee to wire everybody to the Net and
give everyone a smart card. Part of that will be provided by the market, another part by
the government.
Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
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