Building a flexible framework for business

Date: 12/09/1996

By Tim Jones

EUROPEAN companies must radically adapt their ways of doing business if the levels of economic growth and job-creation of the past are to be sustained, warns a representative of the continent's young entrepreneurs.

“We have to look at new models, whether these be methods of financing enterprise, management, or the whole framework within which companies - especially small- and medium-sized enterprises - operate,” says Frédéric Soudain, secretary-general of YES for Europe (Young EntrepreneurS for Europe).

For too long, he argues, the debate on the future of the firm within Europe has centred on the creation of a European Company Statute - a proposal which has remained on the starting blocks of the EU for more than a quarter of a century.

The idea of such a statute, proposed by the European Commission back in 1970, is to provide a common legal base for setting up enterprises across the EU.

However, agreement on the proposal has been held up for decades by disputes between the member states over workers' representation in decision-making and different corporate tax regimes.

“We feel that this debate of 26 years ago has been overtaken by events. Major changes in Europe have thrown up a range of new types of working and some of the traditional hierarchical structures within companies and countries are often too rigid to cope with the demands of the changing economy,” says Soudain.

It is becoming more acceptable for employees to be given some kind of stake in their company, whether through direct share ownership or simply through having greater responsibility and scope for initiative.

At YES for Europe's annual forum, to be held in Paris on 29-30 November, more than 300 of the group's members will explore why these models have not been adopted everywhere. “Quite often, people have been keener to hang on to the systems they know at a time of uncertainty,” says Soudain.

The organisation has called for major reforms of the way companies are run. For example, Soudain and his colleagues criticise the way the whole discussion about flexible working time has been conducted in Europe. “Social partners and public authorities have been taken up with sterile debates where they too often stick to the position that they have always held.”

He argues that every organisation which has influence should do everything it can to ensure that the proper environment is created for the two sides of industry to talk to each other and design the best ways to bring about this kind of flexible working.

YES for Europe's French organisation, the Centre des Jeunes Dirigeants d'Entreprise, recently launched a project involving 60 firms where certain regulations have been applied in a more flexible manner.

Soudain believes these are the sort of projects that more governments should support.

Similarly, he backs the promotion of so-called 'free innovation zones', where over-strict rules that inhibit enterprise are temporarily relaxed. These areas encourage administrative simplification, allow greater flexibility in working and promote the wider use of information technology between companies, such as electronic commerce.

They require strong political will on the part of public authorities, as well as business, if they are to work effectively.

YES for Europe groups together ten national associations of young managers, including those in the big member states of the EU. However, Soudain is keen to point out that its aims are not those of the major employers' federations.

“We are less a professional European confederation and more a network: 30,000 young managers Europe-wide, those with a managerial and financial responsibility in their business and less than 40 years old,” he explains.

The 29-year-old secretary-general points out that he tends nevertheless to be at the younger end of the spectrum whenever there is a gathering of the group. He adds: “We are very attached to the idea of being a network different from these horizontal groups such as UNICE or Eurochambres, because we group together people who are closely involved in business at the national and the European level.”

YES for Europe, representing all sectors of industry, trade and services, was founded in 1958 by five of the current members. The organisation lay dormant for many years before it was revived in 1988 to capitalise on the advent of the single market.

“We monitor and lobby on issues that interest young entrepreneurs, and develop the tools to make it easier for the 30,000 members of our network to keep in contact and to share their experience in management.”