Despite A Creeping Recession In Europe, Entrepreneurial Ecosystems Are Developing

Editor’s note: Michael Tyrimos is the interim CEO at, the co-founder of and the Cypriot Enterprise Link, and a Fellow of The Royal Society for the Encouragement of Arts, Manufactures & Commerce in the UK. He specializes in the growth of early stage tech startups.

It’s not news that the Eurozone is in one of the worst economic and political shapes it has been in thus far. Greece’s future remains uncertain. Italy’s economy has failed to significantly rebound from its recession while other highly indebted European member states — namely, Ireland, Spain and Portugal — previously shared Greece’s concerns and standpoint and form a united front against Germany’s line of policy. In the meantime the euro dropped to a 12-year low this year.

Indeed, some of the European member states may be highly indebted and suffer deeply but it is interesting to see how entrepreneurship has been flourishing in these countries at the same time.

European entrepreneurs are less confident about their country as a place for startups than those in America, Canada or Brazil, but regardless, entrepreneurial ecosystems are developing across Europe.

Greece seems to be adopting to a rapid entrepreneurial culture that counts incubators, funds, tech hubs and accelerator programs, as well as successful startups such as Taxibeat, which has raised $6.7 million in three rounds or Workable, which raised $7.5 million in three rounds from Greylock Partners and other investors.

Endeavour Greece, an international business support organization, identifies the existence of high-tech entrepreneurs in Greece and targets to support 7-8 companies with high-growth potential per year. Additionally, accelerator programs such as Egg have already hosted 25 startups in their one-year mentoring program.

The results in Greece are notable. According to a statement from Endeavour Greece in Business Insider, between 2010 and 2013 the number of startups in the country increased from 16 to 144, and investment rose from 500,000 to 42 million euros.

Not only the Greek entrepreneurial ecosystem is growing but it seems to have been forming ties with Silicon Valley as well. Marios Belibassakis, Trade and Commercial Attache for the Ministry of Foreign Affairs and former Vice-Consul of Greece in San Francisco, said, “The entrepreneurial ecosystem in Greece is like a sleeping giant. There is a great potential that is still and waiting.”

Looking elsewhere in Europe, Dublin is a booming tech hub, also praised as the Silicon Prairie.

With its low corporate tax rate, tech giants like Google, Facebook, LinkedIn, PayPal, Amazon, Twitter and Zynga decamped there. Moreover, despite Ireland’s worsening recession, Global Entrepreneurship Monitor reported that in 2013 one in 11 adults in Ireland were engaged with some aspect of early-stage entrepreneurial activity — the highest number since 2005 — while 32,000 individuals started a new business in the same year.

Another example is in my country, Cyprus, a Mediterranean island, located fewer than 300 miles away from Israel’s premier technology cluster (the ‘Silicon Wadi’) and one of the smaller European Union member states that has attracted significant attention over its financial troubles from two years ago. Although Cyprus is still in bad economic shape with rising unemployment levels, it also has experienced the organic growth of a privately led startup scene.

A recent example is the work of an angel network I’m involved with, which has created a co-working space called Capital Impact* that has six startups working on building new technologies. The initiative is the brainchild of CYBAN, a Cypriot angel investors network, which has thus far invested approximately 3 million euros (around $3.4 million) in Cyprus-based startups. The creation of the coworking space was widely supported by the Cyprus’ enterprise ecosystem via network of local associates that include Chrysalis Leap (an accelerator), Junior Achievement and the Cypriot Enterprise Link (entrepreneurship support organizations), as well as corporate partners such as Microsoft and PwC. CI is only a part of Cyprus’ growing ecosystem.

Undoubtedly it is encouraging to see EU member states, which have been deeply affected by the European economic downturn and consequent austerity measures, actually experiencing entrepreneurial growth. However this is not a general rule, as there are exceptions.

In Spain for instance, there seems to be an ‘anti-startup’ climate derived from the country’s new taxation on potential gains (laws to protect legacy business), which has apparently even driven Google out of the country, as well as caused other negative elements such as scarce capital and high bureaucracy that led Spanish entrepreneurs to establish themselves overseas.

Italy seems to be falling behind for similar reasons. According to EY’s entrepreneurship barometer in 2013, Italy is falling behind the average of the G20 nations when it came to access to funding, entrepreneurship culture and tax and regulation amongst other things. As the report states: “Starting a business in Italy involves high costs, financing is difficult to secure, and the tax system is unnecessarily complicated.”

Nevertheless, some experts are optimistic when it comes to the entrepreneurial future of Italy – Corrado Tomassoni, the global director of startups, accelerators and VCs at PayPal and Braintree says:

“Successful entrepreneurs have been the backbone of Italy for centuries. Recently, with the introduction of favorable legislation for new innovative businesses, we’ve seen development and expansion of tech startups, accelerators and incubators. In turn, this momentum of entrepreneurship and innovation heightens growth for local businesses. There is still a lot of work to do, especially in the availability of capital and investments, but I think that the Country is on the right path.”

The future of the Eurozone is uncertain and certainly shaky given the recent developments. Hopefully this new wave of entrepreneurs, especially in the member states, are experiencing deep recession and have suffered the aftermath of austerity measures, will be able to make a positive overturn for at least a part of these economies.

The European Union has an action plan in place for the promotion of entrepreneurship among its member states by the year 2020. But the effects of the plan will take time to heal Europe’s battered economies.

*I have a direct relation to the Capital Impact coworking space, which Cypriot Entrerprise Link is affiliated with. I am also the interim CEO of, which is incubated in Capital Impact and has received investment from CYBAN.