Early Warning Europe in the spotlight

16 June, 2022
Intellectual Property diagnostics service
Business growth
We met with Morten Møller from Early Warning Europe to discuss models for detecting insolvencies, how Early Warning Europe is trying to change the general perception of closures and second starts, and the role intellectual property can play in building more resilient businesses.

‘Bankruptcy should not be a taboo’

For those unfamiliar with Early Warning Europe, could you briefly explain what your organisation does in general and, in particular, to support EU SMEs?

Early Warning Europe is a network organisation of 33 partners across Europe, cooperating at the authority and operator levels. Already, 13 countries have implemented Early Warning (EWE) mechanisms, and more are in the pipeline.

These national Early Warning mechanisms provide impartial and confidential help in alert, diagnosis and action planning to:

  • ensure that the necessary changes are made for companies to survive;
  • ensure quick and honest closures when this is the right way out;
  • bring companies on to a new course towards growth, and create more growth companies;
  • contribute to changing the general perception of closures and second starts – bankruptcy should not be a taboo!

We are a dialogue partner of the European Commission for new policy and strategy in bankruptcy prevention, restructuring, resilience, management skills, etc. Our focus is peer learning and cooperation. We have a knowledge centre, organising tools, materials, documents and experience from past and present projects in this field. We call it the Early Warning Europe Learning Platform. Our network counts on more than 1000 EWE mentors, which are in the process of more robust integration.

Early Warning Europe
 Morten Møller, Network Coordinator, Early Warning Europe

‘Intellectual property is a building block when you build a resilient company, and if that block is missing, the company will always be vulnerable.’

What is your impression of the EUIPO’s SME programme and the role it plays in supporting SMEs?

In my mind, the stakeholders around SMEs could do a lot more to highlight intellectual property (IP) issues. Many entrepreneurs simply do not have the necessary knowledge or awareness to secure their good ideas, and this is a problem for everyone, not only the SME itself.

When dealing with the reconstruction or closure of an SME, valuing their intellectual property rights (IPR) is fundamental, and the more the stakeholders know about it, the better the outcome of these proceedings. This is clearly in everyone’s interest.

It is crucial that the EUIPO now focuses on these issues in the SME programme because the need is there in a broad sense, and even more so among start-ups. I see a need for building capacity and raising awareness of IP among start-ups and students in entrepreneurship classes. IP should be part of any entrepreneur's management literacy from the company’s creation.

The EUIPO and Early Warning Europe (EWE) recently signed a collaboration agreement in which we jointly pledged to support SMEs and make them aware of the importance of the use of IP. How would you sum up our collaboration and what we have achieved so far?

Together, we have started raising awareness in our network, and we have been looking into the opportunities for visibility and outreach across the EUIPO’s platforms. Indeed, this has been a good process so far. News updates and good communication are logical starting points for addressing the evident knowledge gaps in our network and among our stakeholders.

Now, we are planning the first capacity building sessions, which will help us raise the bar in terms of knowledge and expertise in IP. We will put this knowledge into practice in our thousands of assistance cases across Europe each year, so that the impact will be substantial for these companies. In this context, we appreciate the opportunity to build capacity in the local languages of our national operations.

The Early Warning Europe network is providing advice and support to companies in distress. Are these companies aware of the role IP can play in mitigating bankruptcy risks?

There is no doubt that more can be done with specialist knowledge of IP issues. In the Early Warning operations, we see the companies that fail, so undoubtedly, many of those that do not fail are good enough at managing these issues. But from our perspective, too many companies lack the minimum knowledge of IP, which is particularly true for the smallest and youngest ones. IP is a building block when you build a resilient company, and if that block is missing, the company will always be vulnerable.

When we look at the changes in consumer behaviour in recent years, not least during the COVID-19 lockdowns, many retail companies suddenly had to refocus their business and enter into online operations, which brought entirely new challenges in terms of IP. Such developments show that this is not a static situation, and SMEs need the skills to manage it.

Since your organisation works closely with SMEs and entrepreneurs, do you believe that initiatives like the SME Fund are beneficial to them? What other approaches do you consider necessary to assist entrepreneurs in trouble?

One of the approaches is to redesign entrepreneurship training and counselling in the European education and training system through changing paradigms and mindsets to communicate that failing is not a shame but can be an asset. We have, for example, designed in the ResC-EWE project a high quality scalable and practice-based Massive Online Open Course (MOOC) targeted at the needs of entrepreneurship students and SMEs.

This toolkit is made available in an open-source learning platform and integrated into the existing and rapidly expanding Early Warning Europe network. The MOOC is streamlined into European education and training, and entrepreneurship counselling service through the involvement and training of EWEU mentors and students, start-ups and SME staff in the four target countries.

Early Warning Europe

‘I see a need for building capacity and raising awareness of IP among start-ups and students in entrepreneurship classes.’

Lastly, what is in store for Early Warning Europe over the coming years and what synergies do you hope to achieve with the EUIPO SME programme?

We strive to ensure that the European Commission and the Member States give SMEs in all EU27 countries access to timely and effective early warning support and essential services necessary for running a business. We are looking into the possible obstacles that the payment default registry systems create for second starters.

Finally, we are pushing for political action in financial and entrepreneurial literacy. This should be enhanced, ideally starting already from secondary school to ensure that start-ups are equipped with at least a rudimentary financial know-how and that they know about the network of SME support organisations.

And, of course, we help new organisations get started as Early Warning operators. A couple of new EU countries are on their way, and we cooperate on launching Early Warning mechanisms with sector organisations as far away as India and Mexico. The need is everywhere, and so is the desire to help others!