Forget the broad theories and abstract policies: it's people – individual men and women with an overwhelming drive to succeed – who are at the heart of innovation. People like Jean-Michel Aulas, a French entrepreneur who founded CEGID, now one of Europe's largest ITservice companies. Or David Bäckström, a Swede who spotted a health-market opening and turned Telemedicine Clinic into the largest telemedicine company in Europe.

These are high-growth entrepreneurs – a special group that, economic research suggests, are perhaps the most important creators of jobs and prosperity for an economy. They spot the market opportunities, develop the innovative products – and then go one step further: they think big. They get the financing, management teams and strategy to go global. They aren't afraid of risk.

And Europe needs more of them. That's the recommendation of a blue-ribbon panel of business, academic and policy leaders, the Science|Business Innovation Board, which has been reviewing what Europe needs to do to encourage more innovation. The board, supported by Microsoft, includes the former prime minister of Finland and the former president of the European Parliament; top executives of Spanish auto-parts maker Ficosa International, Belgian pharma company UCB, German VC firm TVM Capital, and Microsoft International; and the heads of three universities. The goal: to apply their wealth of experience in suggesting new approaches to Europe's crying need for innovation.

Certainly, the problem is urgent. With China and India rising in the global technology race, “We still don't have enough entrepreneurs,” said Janez Potocnik, the EU science and research commissioner, addressing the board at its most-recent meeting, on December 8, 2007, at ESADE Business School in Barcelona.

Economic research suggests that high-growth entrepreneurs are perhaps the most important creators of jobs and prosperity for an economy.

“We still don't have enough SMEs fulfilling their growth potentials and creating jobs,” said Potocnik. “About 60 per cent of Europeans have never considered starting their own business. Only 5 per cent of European companies created since 1980 are now in the top-1000 companies in terms of market capitalization. In the US it's 22 per cent.” For Europe, he says, the challenge is simple. “Either you want to be successful or not. You have to play globally: that's the way the world is turning.”

The care and feeding of high-growth entrepreneurs has been a topic of intense academic study recently. Sometimes called ‘gazelles,' this special breed was responsible for some 70 per cent US employment growth in the early 1990s.

But Europe has a problem. At present, according to Prof. Erkko Autio of Imperial College London – host to an earlier Innovation Board meeting – Europe has a third to half as many high-growth entrepreneurs as the US or China. That gap is economically profound. For instance, Autio calculates that if his native Finland had the same high proportion of gazelles as does more dynamic Sweden, it could generate 150,000 extra jobs over a five year-period – equivalent to 5 per cent of the adult working-age population. Significant unemployment in Finland would become a distant memory.

What's needed is a rethink of innovation policy to encourage growth companies, board members say. Coordinated action by government and industry is needed to pull emerging technologies to market faster. A lighter regulatory touch, and perhaps targeted tax incentives, are needed to help young, innovative companies grow faster. Innovation clusters, centred around strong universities and big companies, need fostering.

Then there's money. “You need financing to go global,” says Jean-Philippe Courtois, president of Microsoft International. “There are many good, innovative companies in Europe with between €5 million and €15 million in revenue,” he says. “The biggest problem is for a company to grow beyond the first €10 million” in revenue.

Then there's the cultural problem: “in Europe, we give too much attention to the safety net,” says Xavier Mendoza, dean of ESADE. Teaching entrepreneurship in schools, talking about it in the media, and awarding prestigious prizes for it could help change Europe's aversion to risk. A ‘noble failure' in business should be honoured, not reviled, notes Pat Cox, former president of the European Parliament.

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