Europe faces a number of challenges that can be overcome only by an innovative, digitally savvy and entrepreneurial society. The digital frontier offers opportunities for innovation and introduction of new products for the global consumer, inclusion in education and workplace, and enables new ways of interacting, working and learning.
The process should begin with a serious policy discussion on innovative entrepreneurship in the key sectors of digital economy, small and medium enterprise (SME) access-to-finance gap, regional ecosystems to support women, youth, and social entrepreneurship and social enterprises (SE), infrastructure for the technology, media and telecommunications (TMT) and other key sectors, and the conditions required to move these key sectors towards a digital economy. Region-wide partnerships should be initiated to drive these processes much further than what any one actor in the region could achieve within their country’s borders.
Region-wide value-driven ecosystems need to be developed and relevant infrastructure built to mobilize entrepreneurial innovation and move TMT and other key sectors towards a digital economy. The governments have to address the unfavourable business environment and remove complex, demanding, and expensive business processes in order to support the region’s SMEs and to attract innovation to the region.
Sources of innovation in key sectors should be identified and programs designed to attract innovative companies and their global talent to the region.
This would accelerate transition to the new digital economy and enable circular migration as a response to the region’s emigration of skilled workers (“brain drain”). Youth, women and social entrepreneurship need to be strongly promoted and regional ecosystems developed to support the region’s innovative startups and SMEs in key sectors. This includes incorporating the process of digital transformation, entrepreneurial learning and corresponding skills in the formal education of young women and men;
The existing equity gap needs to be addressed to remove the barriers that hinder the region’s SME growth and innovation. New and impact intermediaries have be developed to offer early-stage financing to the region’s SMEs and SEs. The region requires new financial instruments are required to provide guarantees, debt and equity, and to reduce transactional costs of investing into the SME sector.
The region’s governments, businesses and institutions do require the European partnership to achieve these goals. The partnership should transpose Europe’s own efforts to overcome the challenges its member countries are facing in their own efforts to reach the digital frontier. It should start with removing all contingencies and eligibility constraints to avail all CEE countries, regardless of their EU membership status, a full access to the funds, instruments, and the toolbox available to the member countries’ SMEs and intermediaries.
Should it miss out on this opportunity, the CEE region would see the innovation and digitalization gap widen, leaving it behind as a “second grade” region with a high rate of migration of highly skilled experts. Working together, however, towards building a coherent strategy to reach the digital frontier will enable the CEE region to “plug” its economies into the EU’s Digital Single Market and reach its full potential to create new jobs, introduce new skills, enable new growth, and join the mainstream in the EU and on the global stage.
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MIF Ventures is an impact-focused investment firm whose goal is to combine top-tier environmental, social, and financial returns. Manages MIF II Impact Venture Fund that provides intelligent capital to impact-driven SMEs and social enterprises to help them accelerate their product roadmap, scale globally and improve targeting social issues to deliver better outcomes.
This story has been developed with Mozaik Foundation.