Much has been said about the role that the tech industry is playing and will continue to play in Europe’s economic recovery. When the EU’s Competitiveness Council meets later this week to debate the Digital Services package headlines will undoubtedly focus on a few US tech companies. However, to spur competitiveness and growth in Europe, the raison d’etre of the Council, Ministers should keep Europe’s own start-ups and scale-ups front and centre of discussion.
Politicians love talking about spurring innovation, competitiveness and growth – the EU Recovery and Resilience Fund on digitisation as well as sustainability is welcome in that regard. But even ambitious funding plans will not succeed in driving Europe’s start-ups forward if regulatory roadblocks are laid down at the same time.
I am talking from experience. My start-up, Abodoo, based in Ireland, is part of a coalition of more than 100 European tech businesses, called Digital Future for Europe. We are large and small companies, as well as associations and think tanks from the nine countries that are at the forefront of innovation and digital development. And we know what a difference enabling regulations can make – helping us to grow, create jobs and put innovations in the hands of European citizens.
Our coalition came about a couple of years ago, when businesses from the Netherlands, Belgium, Luxembourg, Denmark, Sweden, Finland, Estonia, Ireland, and the UK realised that changes to the EU’s regulatory landscape could potentially do more harm than good and decided they wanted to contribute together to creating the right conditions for start-ups to thrive in Europe.
A new survey of coalition members, conducted recently, revealed that over half of new tech businesses were struggling to overcome layers of EU bureaucracy and the vast majority (90%) felt badly designed regulation would make it harder for them to do business. As the EU starts to build new sets of rules and regulations from AI and data to competition and online safety, an eye should be kept firmly focused on ensuring the innovators and entrepreneurs behind some of Europe’s most exciting new businesses are not collateral damage.
I have first-hand experience of trying to navigate this maze of regulation – with little resource and even less time to dedicate to it. Our platform, Abodoo, provides all you need to excel in the new world of work. Our technology for government Geonostics ™ visualises dynamic data intelligence and technology that drives sustainable job creation, learning and connection to support economic recovery and growth. For one region alone our mapping technology supported the equivalent of £9 million in job creation so we know this is data with impact.
Creating that growth through innovation is where businesses like mine should be focused. That is why clarity is key. Legal uncertainty results in a startup scene more worried about compliance concerns than about finding the latest innovations. Legal uncertainty can also create scenarios where startups are driven to ensure they don’t fall foul of what they think the rules are, rather than what the rules actually are.
While the Digital Markets Act (DMA), recently introduced by the European Commission, proposes the establishment of a “regulatory dialogue” – which gives flexibility to determine the exact content of rules in the future – we believe this dialogue needs to start now as the rules are being built to ensure start-ups aren’t left out in the cold.
If we don’t get this chapter right, Europe’s tech sector may not be able to fulfil our role as catalysts for economic change and recovery. Mountains of red tape and unnecessary bureaucratic barriers for start-ups and scale-ups could see European tech fall further behind its counterparts globally and rather than making us more competitive it could stunt our growth.
The Digital Services package could help unleash the vast potential of Europe’s burgeoning startup scene and help create a competitive digital single market. However, if European policymakers don’t take into account the needs of startups, we could be left with a new set of rules that impinge on our ability to act as catalysts for economic growth and recovery. Now is the time for policymakers to listen and together we can create a dynamic, competitive and truly innovative digital economy in Europe.