Erasmus for Young Entrepreneurs was the European Commission’s attempt to mimic the success of its student exchange programme, which helps thousands to study abroad every year. But two years’ after its launch, it is not clear whether the programme will be continued.
Since the launch of the programme in 2009, a total of 532 men and women have been matched with business owners in other countries. Most train for two to three months, and for up to a maximum of six months.
According to European Commission figures, about half of the applicants come from Spain and Italy, where high unemployment is forcing more job seekers to start their own business or look for work in another country.
Some trainees drop out if they can find a higher-paying job, but most try to finish their internship and half of their money is withheld if they don’t. The entrepreneurs are paid between €560 and €1,100 a month, depending on the cost of living in the host country.
However, not everybody thinks the EU student exchange programme can be replicated in the business world. “They’ve taken Erasmus for students and tried it with entrepreneurs, but it doesn’t work, they are too different,” said Bernd Kruczek of the Centre for Innovation and Technology, in the eastern German region of Forst.
His company has paired eight applicants and host companies, which is considered a successful number. Most of the 400 intermediary organisations around Europe have only matched one or two, he said. The Commission, which pays them €900 per match, had hoped for 1,500 trainees a year.
Peter Scholten, an intermediary in Breda, the Netherlands, said he holds the record with 30 matched entrepreneurs. He said it is hard to find Dutch people to train abroad because there are national programmes that offer more money. He has had better luck finding small and medium-sized companies to host a foreign trainee.
“One of the problems is to convince the host it’s good for Europe, good for them and good for the entrepreneur,” he said. Their biggest concern is the daily time senior managers have to spend teaching.
Across Europe the results follow that trend: of the roughly 2,500 people who have signed up for the scheme, about 40% of them are host companies. The UK is by far the most popular country for would-be trainees, followed by Spain and Germany.
Supporters see ‘a great opportunity’
Frederik Pfisterer, who runs a banking software company in Stuttgart, Germany, has just brought on board Pedro Moran from Spain for six months.
“It’s a great opportunity to get some really qualified and eager people on board, especially for us in the start-up phase,” said Pfisterer. “And obviously it is an opportunity for the visiting entrepreneur to learn something, but also the contribution from his experience is fantastic. If you hire normal people, the motivation might be different. If you work with an entrepreneur you immediately notice the different spirit.”
The screening process, however, left him puzzled. Pfisterer received the names and profiles of three applicants, whom he interviewed by phone. But the intermediary organisation never spoke directly with Pfisterer.
“I don’t even know their name, they never contacted me. They did the matching and never even spoke to me,” he said. After he selected Moran, “I just clicked ‘yes’ online and said, ‘go ahead,’ and the next thing I heard was, the contract was signed and Moran is boarding a plane.”
In Spain, Moran found the application process long and complicated. He started in September and was contacted by an intermediary in December, and the final green-light came two months later.
Still, Moran is looking forward to working at Pfisterer’s company, where he will earn €900 a month.
“I want to create a company in Spain,” he explained. “In Germany there are a lot of companies, and this one, Mambu, is a good opportunity to learn from them: to develop an idea, to create a company from the beginning, to get in touch with clients and suppliers.”
Future of programme unclear
It is too early to tell if Erasmus for Young Entrepreneurs (EYE) has led to the training of Europe’s future Richard Branson.
With 23 million SMEs in the EU, Commission officials say EYE should be expanded tenfold if it is to have a wider and longer-lasting effect on cross-border entrepreneurship. The Commission plans to propose permanent funding for EYE in an effort widen its scope and impact. This will require the approval of the European Parliament and member states, however.
This week, the Commission is expected to present a review of the Small Business Act, and the fate of this start-up programme is unknown. The Commission allocated €8 million for the first two years of the programme and another €3 million for this year. And a December draft of the SBA review recommended the pilot become a permanent programme, which would require a lot more money.
The proposal should be adopted by the end of 2011, but with cash-strapped governments pushing for cuts to the EU’s budget, it is unclear how much money will be made available.
Financial decisions will depend on the EU’s next long term budgetary talks for 2014-2020, said Charlotte Arwidi, spokesperson for Enterprise Commissioner Antonio Tajani. “It is not sure whether this will be in the SBA review,” she told EurActiv.
For Kruczek of the Centre for Innovation and Technology in East Germany, expanding the programme would go against the current mood of austerity in the member states. Germany, he said, is already footing about one fifth of the bill for saving Greece and Ireland from financial ruin. “No more [large] programmes, because we are paying. Germany is paying. Supporting the euro is enough.”