Halfway through the Milan and Paris fashion week marathon, there's a feeling of same old, same old on the runway. A drought of new French and Italian labels has left two of fashion's biggest capitals in a rut.

"Innovation in this industry comes from young people," says Andrea Batilla, the director of Milan's Istituto Europeo di Design fashion school. "The market needs new names."

Sure, the styles have changed. Prada went from frilly garden prints last season to austere black lace last week. Dolce & Gabbana ditched its recent plasticized mini skirts and put women in plaid frocks that fell below the knee.

Yet the fashion week calendars are clogged with brand names that have existed for decades. Burdened by the administrative bureaucracy that befalls French and Italian entrepreneurs who try to start their own companies in any field, young designers are choosing to pour their talent into established brands. Especially amid the current credit squeeze, it's becoming even harder to find the funds to finance new startups.

"In Italy, the big names are an industrial reality that makes it harder for young designers," says Roberto Rimondi, one half of the Italian design duo behind 6267. Their label, the hottest to emerge from Milan in many years, won a Vogue Italia-sponsored emerging talent competition three years ago.

As a result, young designers are more likely to gravitate toward the relative security of working for an old-but-established brand than starting their own label. Case in point: The two most highly-anticipated new names in Paris this week are employed by established fashion houses. Thirty-five-year-old Alessandra Facchinetti is debuting as Valentino's new designer at her catwalk show Thursday. She was previously the head of womenswear at Gucci. Esteban Cortazar, a 23-year-old Colombian, gave up his namesake line last December to design for Emanuel Ungaro.

"Being here makes me feel comfortable," says Mr. Cortazar, whose first show for Ungaro is on Wednesday. "Having your own brand in this business is so hard."

The dearth of new local labels contrasts with a new generation of designers in the U.S. In the 1990s, Marc Jacobs and Michael Kors set up their own brands at the same time as they were designing for big European houses such as Louis Vuitton and Celine.

Others like Proenza Schouler and Narcisco Rodriguez followed, thanks to big financial backers. In the case of Proenza Schouler, an Italian group – Valentino Fashion Group SpA – took a minority stake in the business.

There are some efforts to make life easier for young European designers. Mr. Batilla, the Istituto Europeo di Design director, is spearheading a new "fashion platform" that helps students from several fashion schools navigate the red tape involved in setting up a business.

Banks often refuse loans to young designers looking to found their own labels, says Mr. Batilla. In addition, many in fashion today lack the kind of business-savvy sidekicks that helped propel some of the world's most celebrated designers to stardom -- think Valentino Garavani's confidante Giancarlo Giammetti or Giorgio Armani's business partner, the late Sergio Galeotti.

"Young designers don't try to start their own brands because they are scared," says Mr. Batilla. "It's easier in the U.S. and the U.K."

Milan's Camera Nazionale della Moda Italiana, which organizes runway shows in Italy's fashion capital, has tried to drum up interest in new designers. Two years ago, it sponsored a collective fashion show for its designs under the title N-U-DE, which stood for New Upcoming Designer. But the show, along with others since then, was poorly attended by influential fashion critics because it took place before most editors had arrived in town.

Beyond administrative and moral support, however, young designers are starving for funds.

Fashion label Marni, the last major success to emerge from Milan nearly 15 years ago, was started by a couple whose family had already made a fortune in manufacturing.

Not long after 6267 won the Vogue design competition, Italian textile and fashion group IT Holding SpA hired the two designers to revive the tired cashmere brand Malo.

This job has given 6267's Mr. Rimondi and his design partner the money to finance their own label, which belongs to the two of them and a friend. It's also given the two designers more visibility, since Malo shows during New York fashion week.

The twosome is so popular, fashion insiders are now tipping them to take over the design of another floundering IT Holding label: Gianfranco Ferre, whose designer died last June. Mr. Rimondi dismisses the speculation.

"People talk, but the evidence is that [IT Holding chairman Tonino Perna] isn't here tonight," Mr. Rimondi said backstage after his fashion show last Tuesday, which took place in the rotunda of an 18th century building in Milan.

Mounir Moufarrige, chief executive of the Emanuel Ungaro fashion brand, says most investors still prefer to bet on an established brand rather than a young startup. "Nobody wants to put their money behind a designer. . . Investors want to buy a brand," says Mr. Moufarrige, who also owns a minority stake in Ungaro.

When he was president of French fashion brand Chloe more than a decade ago, Mr. Moufarrige hired the then-25-year-old Stella McCartney to succeed Karl Lagerfeld as designer. He interviewed 18 designers last year for Ungaro before settling on Mr. Cortazar.

Mr. Cortazar, who grew up in Miami, presented his first collection when he was 13 at his junior high school talent show. "Everything was Velcroed and safety-pinned, like couture," recalls Mr. Cortazar. A fashion fan from a young age, Mr. Cortazar recalls walking by Gianni Versace's South Beach mansion before the Italian designer was murdered. With the support of a friend's father, he launched his own line at age 17 with a fashion show in New York.

Now, he has put his own label on hold for Ungaro. "I feel relieved that I'm in a place where I'm much more supported than I used to be," says Mr. Cortazar, who wears a gold chain and crucifix around his neck.

Mr. Cortazar has to prove himself quickly, however. Ungaro has burned through four designers since its founder departed in 2005. Mr. Moufarrige says Mr. Cortazar has "one day – next Wednesday. Either in your first collection you've proven something, or you haven't." --Christina Passariello