The rise of the European Valley

Europe is becoming a serious opponent for Silicon Valley in the race to be the most innovative place in the world.

On December 18th, alongside the Open Innovation Summit was held in Milan a conference called “European Valley” that addressed the Old Continent’s potential to become a world leader of innovation. “With 85.000 innovation based companies and one of the world’s richest talent pool, Europe offers a unique ecosystem (…) attracting more than 8.700 investors,” argued the organisers. And in fact, over the past few years, Europe has become an ever hotter ecosystem for startups and innovation.

Tech is leading the continent’s growth

The figures are eloquent: according to a recent report by Atomico, European start-ups raised 19 billion dollars in 2017. That’s twice as much as what was raised in 2015. The report, which was released on the occasion of Slush, “the world’s leading startup event” that was held on Nov 30–Dec 1 in Helsinki, establishes that tech is now one of the main drivers of the continent’s growth. By 2020, digitisation is expected to generate between 1.6 million and 2.3 million more jobs than it eliminates in the continent’s five main countries (Germany, France, the UK, Italy and Spain). In the field of mobility, Europe is spearheading efforts to improve and widen shared solutions: “In 2015, companies working on shared mobility in Europe generated around €5.1 billion. But the business could increase 20 times and reach €100 billion in 2025,” writes Euractiv in an article detailing initiatives ranging from bike and electric-car sharing to digital tools to electric-automated shuttles.

A pool of talents

Among the reasons for such a success is the talent concentration: there are now twice as many doctoral students in science, technology, engineering and mathematics as in the U.S, and 5.5 million developers in Europe versus 4.4 on the other side of the Atlantic. The growth is not just driven by a few cities – although Paris, London and Berlin are still main hotspots – : hubs like Munich, Zurich and Copenhagen are fast emerging. And now everybody seems to believe in the potential of the European Valley. Luciana Lixandru, a partner at Accel, told Atomico: “I was optimistic about European tech 12 months ago, and feel just as positive (…) today. The ecosystem is constantly evolving, and its momentum is accelerating. You can find world-class levels of ambition, innovation and disruption across the continent.”

A few things are still holding Europe back, though, mainly the fact that contrary to the U.S. or China, tech entrepreneurs don’t have immediate access to a massive market. “In Europe, they still must navigate 28 different consumer markets and regulatory regimes,” writes the World Economic Forum, adding that the efforts of the Europe Commission to create a single digital market are so far resulting in a “jumble of outdated, corporatist, counterproductive industrial policies,” as write Hosuk Lee-Makiyama and Philippe Legrain of the Open Political Economy Network. Making it easier for digital entrepreneurs to innovate for the whole continent will definitely be key to building a truly successful European Valley. And mobility is probably one of the best sandboxes to do that, now that most European countries and cities have opened their data, fostering third-party innovation in the field of mobility. More on that soon…