Growing levels of education, the increasing availability of capital, the diversification and specialization of economic activities and the numerous soft and hard supports available to start new businesses have led to the creation of more and more micro and small businesses across Europe. But while the process of setting up a business is increasingly straightforward, keeping it going is much tougher. In normal times, business entry and business exit are natural processes, inherent to economic life. In fact, 50 percent of enterprises do not survive the first five years and, of all business closures, bankruptcies account in average for 15 percent (A Second Chance for Entrepreneurs, Expert Group Report 2011). Yet, the number of bankruptcies peaked during the recent financial crisis and even before that, the Lisbon Partnership had identified the key role of “overcoming the stigma of business failure” as a strategy for growth and jobs.

There are clear economic and social rationales to promoting a second chance for failed entrepreneurs and deriving positive experience from negative situations. First and foremost, businesses set up by restarters grow faster than first- timers in terms of turnover and jobs created (Stam, Audretsch, Meijaard 2006), and approximately one- fifth of all successful business people failed the first time around. The case studies of Ford, Hershey and Disney are instructive for young entrepreneurs in this matter.

Second, most of the time, business failure is not due to the incompetence of the entrepreneurs but due to external circumstances, such as a slump in demand, a financial crisis or the rise of a new competitor. However, this professional failure is often confused with personal failure, and low self- esteem causes individuals to withdraw and retreat to safer employment options.

Third, it is accepted that a society does not generate innovation and productivity by steadfastly avoiding mistakes but, rather, by learning from them. Yet our culture and incentive system does not reflect this. There is much evidence to show that Europeans as a whole are relatively risk- averse, especially compared to countries such as the United States. In Germany, for example, only 1– 2 percent of new companies annually are founded by second- chance entrepreneurs (see KfW- Gründungsmonitor 2013), and the World Bank recently critiqued Poland for its failure to understand the value of secondchance entrepreneurs as manifested in its particularly onerous liquidation procedures (Devictor 2013).