Can Europe secure its innovation potential in the face of global superpowers?

by | Jun 23, 2021

The rise of China as a tech superpower, combined with the longstanding dominance of the US, means the race is on for Europe to secure its own place on the innovation stage. With venture capital cash pouring into start-ups, and the EU cementing its regulations around AI, is there still time for Europe to secure its innovation potential and compete with China and the US?

We asked technology leaders from across the region to put forward their perspective.

The potential for digital innovation in Europe is huge

 Saranjit Sangar, EMEA CEO at upGrad.

The potential for digital innovation in Europe is huge. New figures from this week show the UK as leading the European tech industry after growing tenfold in the last decade.

This is good news, as it places London just behind the Bay Area, Beijing and New York in terms of the number of new tech unicorns. The pace of this growth suggests that Europe is starting to catch up to digital hotspots across the US and China.

While this is heartening, to ensure Europe is equipped to sustain and even accelerate digital innovation, it is essential we future-proof the workforce with the right skills and expertise to meet demand – but herein lies the problem.

It is predicted that 9 out of 10 jobs in the future will require digital skills, yet 169 million Europeans between 16 and 74 years (44%) do not even have basic skills in this area.

If Europe is to become a global destination for billion-pound technology companies, we need to flood the market with the right skills in fast-growing verticals such as fintech, AI, computer science and data science, to name just a few.

Building expertise and technology that directly address the growing needs of local, national and indeed international employers will ensure Europe can benefit from the untapped potential that would otherwise fall to more technologically mature countries. It is for this exact reason that upGrad offers industry-focussed programs built in collaboration with Universities and industry mentors to help plug the gap within the 40% of European companies currently in need of ICT specialists.

In the context of multiple national lockdowns across Europe, in addition to huge shifts in working from home, many businesses have been required to speed up digital transformation. Against this backdrop, digital skills have become even more crucial to business’ post-pandemic growth strategies.

More investment will be required to ensure that these businesses are equipped to transform for tomorrow. Those who don’t risk widening the digital gap between Europe and its peers around the world, restricting innovation and meaningful progress

Even with a culture of innovation, European businesses will face challenges their own innovation ecosystem can’t solve

Simon Hill, CEO, Wazoku

We work in an era in which innovation is valued more than it has ever been. An innovative approach can have a tangible impact on business outcomes such as customer engagement, market positioning and even profit margins. For European technology and business, tapping into such innovation is vital given the competition from other parts of the world. Therefore, many firms have put in place the tools and systems that help them be more innovative, technology that provides the best possible platform to encourage creativity and innovation.”

Yet innovation still comes back to people. The events of the last 12 months – principally Covid-19 and its on-going aftermath – have shown that open innovation and collaboration are more important than ever in business. Organisations know that good ideas are an essential element of any innovation programme. They usually turn to the people who know their business best to capture, discuss, and develop ideas.

The right idea or innovation platform allows a company to generate ideas more effectively but have in place the frameworks to build on them, collaborate, and see them through to fruition. 

Engaging employees in this way helps to create a culture of innovation, which supports, encourages and rewards innovative thinking. It is driven from the top but relies on the engagement and involvement of the whole organisation. People know their input is valued and are empowered to come forward with ideas and innovative new approaches. Without a culture of innovation, any organisation’s innovation plans will fail to get off the ground.

But even with a healthy culture of innovation, European businesses will face challenges their own innovation ecosystem can’t solve. A willingness to consider open innovation can play a significant role here. Businesses that have embraced an open innovation crowd have found they can tap into an even greater resource than their own employees. It’s an approach already favoured by governments, pharmas, NGOs and other organisations. By working collaboratively with wider external groups, a business can benefit from those groups’ collective expertise and know-how.

Strong innovation should connect disparate groups – employees, customers, partners and external communities with a track record of collaborating and solving challenges. By working openly and collaboratively with wider external groups, European firms can deliver on their innovation potential much more effectively.

The region has the right ecosystem that technology companies need to thrive

Christoph Gugelmann, Co-Founder and CEO of Tradeteq

We chose to establish our headquarters in London, the heart of Europe’s tech scene. It is clear to me that the region has the right ecosystem that technology companies like Tradeteq need to thrive. This includes access to the right talent, funding, academic institutions and research, consumer and business appetite for modern fintech solutions and stable political and legal systems.

Many industry observers compare Europe to Silicon Valley as a means of measuring success, but I’m not sure that comparison is accurate. Silicon Valley has been around for several decades and is home to companies that kicked off the computing revolution. The companies based there were, and still are, pioneers because a thriving ecosystem emerged from the first generation of companies like Hewlett Packard, Intel and Shockley Semiconductor Labs.

In comparison, the tech scene in Europe is a lot younger, but advancing at a far more rapid pace and at a lower cost than Silicon Valley in its early days. Just look at the developments made in Europe over the past decade in payments and mobile banking, for example. That’s not a surprise, given the tools at our disposal, but we are only getting started. I believe we are at an early stage of building a European tech ecosystem that will eventually match or even surpass Silicon Valley. Crucially, we will see innovation spread quite widely rather than concentrated amongst a handful of large companies.

Another reason why the future is bright is that there is a new generation of talent that hone their technology and engineering skills from an early age. They will be the next generation’s Steve Jobs, Bill Gates and Elon Musk. They just need to be given the opportunity to thrive. Watch this space!

We are at the beginning of an exciting new chapter in European innovation

Adrien Nussenbaum, Co-founder and CEO at Mirakl

I firmly believe that we are at the beginning of an exciting new chapter in European innovation. Europe’s startup scene has long been overshadowed by Silicon Valley, but this is about to change. In the last decade, Europe has built a resilient start-up ecosystem that has seen investment increase sixfold. We now have a new generation of scale ups, including more than 70 unicorns that have created more than two million jobs.  There is no turning back from here.

But how can Europe secure its own innovation potential in the face of global superpowers? The good news is that we can do this by emphasizing our region’s innate strengths, rather than attempting to replicate the approaches of others. For starters, Europe has a thriving community of technology leaders who are committed to regional development and collaboration. One example is the Scale-Up Europe initiative, launched by French Minister of State, Cedric O, and the European Commissioner for Innovation, Mariya Gabriel, which Mirakl is part of. This initiative has one ambition: to grow 10 Europe-based technology companies valued more than €100bn by 2030. Alongside more than 170 other tech company founders, investors and influencers, we work to unlock four key drivers for the success of the technology industry: talent, investments, collaboration between startups and large corporations, and deep tech.

Over the past months, we have been working on an actionable strategy and roadmap to be presented to the French President Emmanuel Macron and European leaders last week on scaling the tech ecosystem to the next level. 

One of the key areas we’ve identified is the need to bridge the substantial cultural gap between startups and corporates in Europe – such as different motivations and a lack of understanding between the two. Which is why we have suggested to President Macron and other European leaders to elaborate a charter of reporting and best practices on collaboration to be implemented by the end of 2022. This voluntary annual reporting will focus on best practices and success stories, and will enable corporations to closely observe their level of collaboration with startups.

Another recommendation includes the creation of stamps, given to startups by corporations to certify their core capabilities – such as the potential to scale and deliver high quality products. This will help speed up the screening process in the sales cycle and foster better collaboration between the two.

These ideas have been developed with a shared ambition for the continent to become a leading force globally, and we’re excited to see what’s in store for the European tech scene – which will continue to move from strength to strength. 

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