How I learned to stop worrying and forget about the Euro

The world economy appears on the brink of another global recession, with bleak jobs data in the US on Friday, fears mounting about China and India slowing down and the Eurozone crisis going from bad to worse last week.

Interestingly, the appetite for corporate venturing remains strong among executives. As one industry adviser put it to me last week: "When meeting with clients we discuss the economy as conversation. Yet for a corporate with huge amounts of cash on the balance sheet, the economic consequences of a $50m fund commitment is neither here nor there."

As Mary Meeker, partner at venture capital firm Kleiner Perkins Caufield & Byers, showed in her internet trends 2012 presentation last week, the gap between revenues and expenses for US corporations is the biggest it has been in peace time.

This point came across clearly at a recent conference hosted by Spain-based bank BBVA, set up to discuss corporate venturing. As Spain-based corporations, despite their domestic market’s distress, have a nascent interest in the sector. The local corporate executives from the likes of telecoms company Telefonica, energy utility Iberdrola and BBVA spoke strongly of their desire to invest in innovation despite the fact the country is at the epicentre of recent economic turmoil, following the nationalisation of savings bank Bankia which has again thrust the spotlight on the country’s banking sector’s difficulties following the bursting of Spain’s real estate bubble.

One executive, Javier Santiso, a founder of one of Spain-based telecoms group Telefonica’s corporate venturing units Amerigo and a professor at Spain-based business school Esade, asked the question in his speech why can Spain not be more like Israel, a small country renowned for its creation of successful start-ups?

The question is particularly poignant for Spain which has the highest unemployment in the Eurozone at approaching 25% – much of Israel’s entrepreneurial success is said to have been kick-started following government measures to channel its high unemployment positively, after the country had many immigrants coming in after the fall of the Soviet Union in the 1990s. Yet this line of thinking for many of Europe’s crisis-hit countries has been increasingly echoed by executives I have spoken to.

Those keen on emulating Israel recommend Dan Senor and Saul Singer’s  Startup Nation: the Story of Israel’s Economic Miracle as a good way to understand how to implement measures which would encourage greater entrepreneurship. Of course, no one is deluding themselves this will be easy for Spain or elsewhere.  There has been a lively discussion on Global Corporate Venturing’s LinkedIn page in the last two weeks as to how or whether the UK can make its start-ups flourish, after this became a strong theme at our annual Symposium last month. Those in the discussion said it is corporates who were prime candidates to take the lead in creating a UK ecosystem, although there was some scepticism about their willingness to do this.

Yet cash piles are high in the corporate world, the cost of investing in innovation is relatively small, and the potential to greater understand the future of the market and also create a more buoyant environment to do business in is huge. If you, like me, have taken to eyeing with gripped terror each twist and turn of the Eurozone crisis, check yourself. We would perhaps all be better off if our focus was on how Europe’s debt-ridden and high unemployment economies could become more like Israel – much like the forward-thinking Spanish executives at the BBVA conference, although the take-up for national service might be less strong among the young themselves.