Abstract
AbstractIncreasing the availability of skilled labor to small and innovative ventures is imperative if entrepreneurship and innovation are to flourish within the European Union. Building up a qualitatively and quantitatively fitting labor force is always a challenge for new, growing ventures, but Europe’s labor market and social security systems tend to create specific barriers to such growth. By aiming for neutrality and portability in social security systems, we propose reforms that will increase the mobility and flexibility of labor, while maintaining a generous level of social security and labor protection. As competencies in labor markets and social security are concentrated at the member state level, the proposals made in this chapter mainly speak to policymakers at that level. Moreover, our proposals extend the scope of what is traditionally considered entrepreneurship policy.
Highlights
A necessary condition for the long-term success of a new venture is that the entrepreneur can recruit key personnel at the opportune time to scale up the business to a full-grown firm (Eliasson 1996; Elert and Henrekson 2019)
Basic social security is a collective responsibility best organized through moderate universal arrangements that do not unduly reduce flexibility for employers or mobility for employees
The proposed reforms would increase the mobility of workers and flexibility for employers by removing onerous labor market regulations while providing the social security system with much needed risk pooling for the risks all individuals face but cannot manage individually
Summary
A necessary condition for the long-term success of a new venture is that the entrepreneur can recruit key personnel at the opportune time to scale up the business to a full-grown firm (Eliasson 1996; Elert and Henrekson 2019). Employees should be free to move from one job to the just as employers should be free to adjust the labor force to the needs of their venture (subject to rules guaranteeing that any dismissal of redundant or allegedly underperforming workers follows a fair and transparent procedure) When both sides have this flexibility can the matching in labor markets promote an entrepreneurial society. The incentives that encourage activation, mobility, and risk-taking are best served by universal insurance systems that disregard labor market status, history, or attachment These institutions should, ensure portability of tenure rights and pension plans as well as a full decoupling of health insurance from current employers.
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