What Governments can do to support Entrepreneurs

On December 19, 2012 the article below appeared in “De Tijd”, the Belgian financial newspaper. It was triggered by the question what governments could and should do to support businesses.
Globally it is tough to raise money. The days that business angels or venture capital companies, even banks, invested happily in start-ups are gone. Sure, there is still money to collect from these institutions, but the price of that money is high. The demanded return on invested capital sky-rockets in terms of % interests and % shares. Why would you want to chase your entrepreneurial dream if someone else has the power to control every move you make?

My suggestion was to allow and encourage established enterprises to directly invest their enterprise income tax into start-ups. There are a lot of advantages with this idea. First of all, it will give a boost to the relaunch of the economy in a significant way. When I look at today’s actions taken by the Belgian and Flemish governments, I see very limited funding (a couple of million €, a drop on a hot plate) and the creativity does not go beyond “giving advice to starters”. Advice is a nice to have, adequate capitalization is a must have. In Belgium, the yearly tax income from enterprises is around 9 billion €.  Assume that 10% of the enterprises take this opportunity to invest in a start-up of choice, that will give a boost of approximately 1 billion €.  Part of that money will be recovered by the government through social and personal taxes from the new enterprises. The rest has to be compensated by establishing a more efficient government. Secondly, the commitment of other enterprises to actively participate and help these start-ups will be high. After all, it is their money and they want to ensure that it does not disappear. Here lies a great opportunity to give “older” employees the chance to transfer expertise. The government can help to set up a crowd sourcing website where companies can directly invest in featured start-ups. And lastly, this is a very socially inspired idea. The creation of jobs, the injection of enthusiasm and companies helping each other directly are all in support of the economic-social society.

 

De Tijd004

 

 

 

Posted in Innovation

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