Europe has a new plan for innovation ecosystems; most will struggle

Philippe MEDA -

The European Commission is about to present a new policy roadmap for innovation ecosystems called "A New European Innovation Agenda." The incentive is clear: European innovation ecosystems are still not on par with US ones. It would be a long (undoubtedly interesting) discussion to understand what's never clicked in that regard, despite decades of public money poured on this issue.

The European Commission has a big new plan for startups. Here’s what you need to know about it
The European Commission is set to publish a policy roadmap dubbed A New European Innovation Agenda to help the continent’s startups scale.
SiftedZosia Wanat

The overarching introduction to the initiative politely points at the core issues (emphasis mine):

Innovation is critical to navigate the twin green and digital transitions and to secure the EU’s open strategic autonomy. This initiative builds on strong foundations to address the scale-up financing gap; need for regulation to enable innovation in rapidly evolving fields; to better interconnect innovation ecosystems and bridge the innovation divide between regions and Member States; and to harness the potential of all innovation ecosystems’ players while developing and attracting talents.

Yes, the interconnect part made me pause.

From my days in public research nearly 25 years ago to my current activities in the private sector (and a few administrations), I've been quite vocal about the lack of effective European interconnectedness. Sure, on paper, every ecosystem is connected to other ones. Key stakeholders from different European regions, tech clusters, and startups incubators meet once a year in some formal event. In practice? I dare you to find a startup incubated in Berlin that traveled to Paris or Milan for two days – if not for wasting time in a random tech event.

Why is interconnectedness so important?

Because innovation is about changing the market, and that market change can only be impactful when reaching critical mass. But as a global 475 million people market that should be larger and more active than the US, we play locally, insulated within our national borders, or worse, our regions. But startups don't scale within a one or two million people market – worse, they won't find enough talents to build ground-breaking things.

I don't have an insider view of what ended up sparking this decision from the European Commission, but it's been a long time in waiting.

To quote Sifted on this:

Brussels wants to help regions specialise in specific tech sectors — such as AI, blockchain, quantum and cleantech — by mobilising funding and creating policies. This builds on an existing idea of “Partnerships for Regional Innovation”. These are supposed to turn into up to 100 “deeptech valleys” across Europe — local innovation ecosystems that will provide financial and business support to founders. The “valleys” will be connected by “deeptech corridors”  that will coordinate activities between the centres to build pan-European technological and industrial value chains. Unlike the US, which has a few mighty innovation centres, the EU is hoping to provide innovation boosts equally across the continent.

Still, this is embedded with many risks and potential misunderstandings:

  • Because eventually, being recognized as a central cluster will be a regional boon, we might have a dozen of Artificial Intelligence deeptech valleys, each one of them trying to be the be number one at something (Industrial AI vs. Retail AI, or General AI vs. Narrow AI, etc.).
  • Even with only one proper thematic deeptech valley, it shouldn't mean that every startup and industry will have to flock physically there. In a post-2020 world, the capabilities of being a virtual tech center working across frontiers will be or make or break capability for such a program. And, as ironic as it can be, our tech culture is not ready to work in an efficient networked way. We love the idea of huge innovation centers where people are supposed to move to and live in forever (hint: they're all pretty much empty).
  • I'm also a tad worried that so many actors in different ecosystems will just be incapable of connecting at a European level. I'm thinking of most public incubators, for instance, which only mission has been to get as active as possible around one or two cities for twenty or thirty years. Although they always have some interconnectedness, it's only been about annual congresses or a few trade shows. Most of these teams will be disoriented and might try to European "on paper."  
  • This brings us to the last trap: for decades universities have been aptly pretending to be globally networked and create vague collaborations across the board, which sole purpose was to efficiently harvest European grants (which they did quite well). Building deeptech valleys might be read as just more of that, and that would be terrible.

But I'd like to be an optimist on this one and hope that the European Commission will give strict guidelines from the get-go and be willing to fast-track clusters that walk the talk and show effective physical and virtual network capabilities.

As for today, this is not a very long list, and we might be facing a uniquely huge paradigm shift for European tech.