Entrepreneurship Among Young Europeans: Opportunities, Potentials, and Actual Intentions

Within its “Europe 2020 strategy”, the European Commission attempts to stimulate entrepreneurial intentions especially among young people by encouraging and funding programs meant to enhance, on the one hand, the potential of individuals to start their own business and, on the other hand, the societal and economic opportunities for such endeavors. In this paper, we take a closer look at the relationship between opportunities, potential, and actual intentions concerning entrepreneurship. We study this relationship at the individual level and at the country level, focusing on people aged 18-35 in 15 European countries. Using data from the Global Entrepreneurship Monitor (GEM) 2012, we find considerable differences in the patterns of the relation between the three variables. In some countries, the intention among young people to start-up is lower than the perceived potential (i.e. not the entire entrepreneurial potential is intended to be exploited in independent business). Simultaneously, in other countries, this intention exceeds not only the potential, but also the perception of good business opportunities (i.e. people who do either not believe that they have the potential and/or do not feel they are given the opportunity to do so intend to become entrepreneurs). We analyze potential explanations for these differences and discuss their implications for a sustainable economic development in Europe.