“What does the entrepreneurial idyll look like?”

This is the question a new report by the Association for Competitive Technology, in conjunction with the University of Cambridge (UK) and the University of Birmingham (UK), seeks to answer.

The report finds that fragmentation and the still incomplete integration of the single market are major obstacles to the success of SMEs in Europe.

One telling example of the fractured EU regulatory framework, the report points out, is its system of IP protection: “EU based innovators have two patenting

[options], either to file national patents in individual countries or apply for a ‘European Patent’ (EP) which according to the EC, is ‘essentially a bundle of national patents’. While the EP saves the patentee from filing multiple applications, to become legally binding the EP has to be translated into the language of each country they require protection in which is both time consuming and costly. Furthermore, disputes are considered through national courts, each adhering to different legal systems. Within Europe filing a patent can take takes twice as long to complete, 44 months, than in the USA and Japan, and as table 2 shows the application process is more significantly more expensive than. These factors are impediments, and arguably deterrents to innovation and entrepreneurship in Europe.”

To alleviate fragmentation in the area of IP protection, the report suggests a number of measures: 

“For the EU to even consider catching up with the USA and Japan a single IP protection scheme must be put in place. The utopian ideal would be a scheme whereby innovators can apply for IP protection in one country, online and at a minimal cost, which offers immediate protection across the environment. There would a central IP mitigation centre, acting independently of state/intra‐state influence, where there are clear guidelines on how to appeal against IP infringements. Within in a multi‐lingual environment translation is clearly an important issue but costs would be kept to a minimum by only requiring translations for the countries where the infringement is argued to be taking place. Alternatively, to attract applications from the USA and Japan, and given it status in global business, English could be adopted as the lingua franca.”

The full report, which is based on a survey of entrepreneurs and SME firms in the ICT sector in six European countries, can be found here.