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As the European tech ecosystem is rapidly emerging, one could wonder why the EU is lagging behind in terms of the number of scale-ups and unicorns (private companies with a $1B+ valuation) it produces. According to research by the European Commission and CBInsights, the US produces five times more and China two and a half times more unicorns than the European Union.
We spoke with Willem Jonker on how to build a strong digital Europe. The CEO of EIT Digital will be one of the keynote speakers at the EIT Digital Conference, September 10th in Brussels. Get a free ticket here.
Crucial factors for Europe to become a digital powerhouse are research and education., Jonker signals.“We need more young talent to become entrepreneurs. They’ll need to transform great European research into global success stories. Also attracting and employing people with the right digital skills is an incremental part of innovation. Without access to the right education, there is no innovation.” Recent research by Mojo shows that no European universities end up in the top 20 of universities where unicorn founders have graduated from.
According to Jonker, EIT Digital strongly supports the effort to close Europe’s knowledge gap by offering top-notch education in the EIT Digital Academy. For instance, the EIT Digital Master School seeks to transform 600 bright young master students into tomorrow’s digital innovators and entrepreneurs.
It’s no secret, the valuation of European technology companies is significantly lower than that of the US or Chinese counterpart. While US investors are happy to invest a large sum for the future growth of a startup and large US companies acquire startups for the sake of their future potential, while in Europe that’s still quite rare. “The price is what you pay, but the value is what you get,” says Jonker. “European investors still are often more hesitant to invest into albeit promising ventures, because they are risk-averse.” It means innovative European scale-ups may have to leave the continent, as the right investor or the right acquisition partner cannot be found here. Going global may be the answer to that. Jonker: “European scaleups are naturally hindered by a smaller home-market, and hence need to have a real global mindset early on.”
EIT Digital, for instance, helps European scale-ups in raising capital with Access to Finance and tapping into other European markets with Access to Market.
The openness of the ecosystem
Jonker: “In Europe, we perhaps often lack the knowledge on how to scale-up and make scale-ups thrive. If you have a really good scale-up, you’ll need to be able to mobilise the money behind it. But it’s often not a matter of finance, but of finding the right expertise. When you are scaling up, it very quickly becomes quite serious in a very short period of time. In the US, there are a lot of companies that have grown from small ventures into big players. That amount of expertise is currently not present in Europe. The main thing from my perspective is that we should share expertise on how to scale-up. The level of openness of the ecosystem could be an important factor in how we can improve our ecosystem.”
The EIT Digital Accelerator supports thriving scale-ups with the right knowledge and expertise on all the main aspects of scaling-up.
Why EIT Digital Conference?
Jonker invites those who are interested in innovation and a strong digital Europe to the EIT Digital Conference, to be held in Brussels on September 10th. “With the EIT Digital Conference, we seek to inspire. If you talk the talk, you also need to walk the walk. The conference is not just about inspiration, but also about showcasing real-life examples of how things can be done and what can be achieved. And there’s also plenty of room for connecting and networking with the innovations we support.”