No 170: Entrepreneurship and Growth

Dennis C. Mueller
June 2011

Abstract: In the year 2000 at a meeting in Lisbon, leaders of the European Union (EU) articulated a set of goals for the Union, which have come to be called the Lisbon Strategy or Lisbon Agenda. The agenda had three main goals: to promote growth through innovation, to create a learning economy, and to bring about social and environmental renewal. Exactly what the last goal implies is not clear, at least to me, but the intent and substance behind the first two certainly is. Research spending was to rise across the EU, university enrollments would rise with them, and a more friendly environment for innovation would be created as markets continued to be liberalized and integrated. The EU leaders meeting in Lisbon set the year 2010 as their goal for fulfilling this agenda. The year 2010 has come and gone. Today, growth rates in Europe are even lower than they were in 2000. Research and university budgets have been cut - sometimes drastically - across the EU. These developments are, of course, largely a response to the recent financial crisis and its impact on state finances. But the crisis would not have been nearly as severe as it has been, if EU countries had been well on their way to fulfilling the goals of the Lisbon Agenda when the crisis hit. The EU's failure to come anywhere near meeting the goals set out in the year 2000 stems, I shall argue, to underlying structural factors and ideological perspectives, which constitute major obstacles to the kind of knowledge-based, innovative society that the EU leaders dreamed of in Lisbon more than a decade ago. This paper attempts to identify what these obstacles are.

Keywords:Entrepreneurship, Economic Growth, Human Capital, European Union.

JEL-codes: I25; J24; L26; L53

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