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The European Commission adopted on July 5, 2022 a new European innovation program “to place Europe at the forefront of the new wave of innovation and young companies with high technological content”.
© Getty — Thierry Monasse
For several decades, Silicon Valley has fascinated Europe, which is struggling to give birth to technological giants on a global scale. And if the Old Continent is now home to 283 start-ups valued at more than 1 billion dollars, of which 125 have appeared in the last twelve months for a cumulative valuation of more than 285 billion dollars, none has yet managed to exceed the milestone. 50 billion dollars in valuation to join the very exclusive club of technological “titans”, according to a report by the investment bank GP Bullhound.
Meanwhile, Apple weighs more than 2,000 billion dollars on Wall Street, Amazon more than 1,000 billion, and even Meta, despite all the scandals that plague its reputation, is still worth 455 billion on the stock market. Something to leave European technology companies wondering…
To change the game, the European Commission adopted on July 5, 2022 a new European innovation program “to place Europe at the forefront of the new wave of innovation and young companies (start-ups) with a high technological content (deep tech)”. The project is titanic, although Europe is very active in R&D investments on a global scale, and in particular in patents relating to ecological transition.
But facing the United States and China, where companies increased their total R&D investments by 9.1 and 18.1% respectively in 2020, the European Union saw, for the first time in ten years, those of its companies fell by 2.2%, mainly due to a decline in R&D in the automotive, aerospace and defense sectors.
A program in addition to the Chips Act and the Listing Act
The EU’s battle plan to catch up on innovation calls for 25 actions to tackle several issues, such as financing start-ups and scale-ups, retaining talent and improving support to the policies of the Member States. This innovation program must make it possible to accentuate the European war effort in order to gain power in the technological sphere.
In this sense, Thierry Breton, European Commissioner for the Internal Market, presented at the beginning of February the Chips Act, a 42 billion euro plan aimed at increasing the EU’s share in the world production of semiconductors to 20% by by 2030, compared to less than 10% today. During the second semester, it should be the turn of the Listing Act to be presented. The latter must contribute to establishing a more flexible framework for IPOs on the Old Continent, so as to make the EU more competitive against the Nasdaq in New York and the City of London.
In this context, France dreams of sending French Tech start-ups to the CAC 40 in the coming years. It is no coincidence that the government has named its index dedicated to high-potential technology companies Next 40. A trajectory that will be made possible by a larger contribution from major institutional investors such as insurers, pensions and sovereign wealth funds, in order to prevent European nuggets from being tempted to seek capital in the United States, and thus to enter the stock market on Wall Street.
Create “valleys of innovation”
Drawing its inspiration from Silicon Valley, the EU also wants to contribute to the creation of “valleys of innovation” to create emulation between several technological players in the same geographical area. In this sense, Brussels plans to help Member States and regions to devote at least 10 billion euros to “concrete innovation projects of an interregional nature”. France already has several innovation centers of this type, such as Sophia Antipolis between Cannes and Nice, Europe’s leading technology park, or Aerospace Valley near Toulouse.
“We need to stimulate our innovation ecosystems to develop human-centric technologies. This new innovation agenda builds on the considerable work that has already been done over the past few years in the field of technology. innovation and it will help us to accelerate our dual digital and ecological transition”assures Margrethe Vestager, European Commissioner in charge of Competition and Digital Affairs. “For more than a year, we consulted with stakeholders: innovation ecosystem leaders, start-ups, unicorns, women founders, women active in venture capital, universities, companies, etc. Together, we are going to raise Europe to the rank of the world’s leading creator of innovations and deep tech start-ups”, adds Mariya Gabriel, European Commissioner for Innovation and Research. As a reminder, Emmanuel Macron wants Europe to be the cradle of ten tech giants valued at more than 100 billion dollars by 2030. The countdown has begun.