Building an ecosystem for European tech innovation
CEO and Co-Founder of Nexthink, Pedro Bados, discusses the process behind building an ecosystem for European tech innovation. There is so much for the European tech scene to feel positive about, but that doesn’t stop the challenge of competing with Silicon Valley. Pedro addresses the obstacles that stand in the way of success for European tech as well as the opportunities.
The European tech scene is thriving. Its so-called ‘unicorns’ are allegedly growing faster than their US rivals, and at the end of 2018, London Stock Exchange data found that 69 European tech companies went public during the year, compared to just 28 in the US.
Meanwhile, an increasing number of European locations – including London, Amsterdam, Stockholm and Switzerland – are gaining reputations as tech hubs and attracting a great deal of funding. It’s estimated that a record $23 billion was invested in Europe’s tech sector last year, a significant increase from $5 billion the year before (and hopefully a sign of things to come).
Yet the fact remains that European tech firms are still dwarfed by those in the US and China. To put things in perspective, the highest current valuation of a European tech unicorn stands at just over $11 billion. The top Chinese unicorn has a valuation nudging the $75 billion mark. If Europe is going to compete on a truly global stage, there’s plenty more work to be done.
Creating a world where excellence thrives
Running a successful tech company is all about attracting the top talent – and to achieve that, you have to build an ecosystem of innovation. Historically in the West, this has all been centred around Silicon Valley, which is an undeniable byword for tech excellence.
This creates something of a chicken and egg situation, as the brightest minds inevitability seek out environments where they’ll be surrounded by other top talent. Because this already exists in Silicon Valley, the best European talent will continually be drawn to America’s west coast – meaning it’s hard to replicate their sort of success in Europe.
If European tech firms are going to compete on the same scale, they need to find ways to disrupt the way things are, like investing heavily in workplace services to improve the employee experience. But it doesn’t just have to be about physically bringing talent into the room. European firms should also embrace the possibilities of globalisation and flexible working.
It’s now possible to build an elite team, even when staff are dispersed worldwide. And of course, on a very practical level, Europe is ideally situated to attract global employees because of its favourable time zones. In London, it’s possible to catch APAC and the east coast of the US all in one working day.
Scaling up ambition
In the US, funding rounds are often in the hundreds of millions – reflecting the ‘sky’s the limit’ approach of many American businesses. Even if they can’t quite replicate this, European tech companies should take inspiration from their American peers.
Things can sometimes feel a little more cautious in Europe, and I’d personally love to see European tech firms be even more ambitious in their outlook when it comes to funding. There’s no denying the impact that a huge injection of cash can have into a business’ ability to thrive, so European businesses must strive to achieve. In our most recent funding round, Nexthink secured $85 million – which is already having a phenomenal effect on our ability to drive growth and keep innovating.
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Turning challenges on their head
Of course, there are other challenges to overcome. Europe is quite a regulated environment in comparison to markets like China, and we don’t have access to the huge levels of data that can drive development. So while we tend to talk about Europe in the same way we talk about the US, the reality is, there’s no single ‘unified’ Europe. There are significant variances in culture, working styles and regulations, even between neighbouring countries.
Germany borders France, Switzerland and the Netherlands – and there are real differences between all four, which can make collaboration difficult. The US might have a huge population, but its fifty states at least share a common language.
However, for all the problems this can cause, I also believe that this should actually be perceived as a strength. With difference comes diversity, bringing various points of view to the table. European tech firms are often multilingual, multicultural, and thus multi-faceted in their approach to problem solving and innovation. After all, we don’t want to replicate Silicon Valley exactly – but we do want to utilise our unique strengths to ensure European tech firms are global contenders.
The bright future of European tech
Despite today’s political uncertainty, if the current trajectory continues, it’s set to be an exciting few years for European tech. But this growth won’t drive itself, so business leaders must make sure they’re building the right environments and thinking ambitiously. In doing so, our tech firms can mark their spot on the global map, powering innovation and excellence as we go.
Pedro Bados bio
Pedro is one of the Nexthink co-founders and is CEO. Pedro holds a MSc. in Electrical Engineering and Computer Science from the University of Saragossa, Spain, and spent a few years as a researcher in the Artificial Intelligence Laboratory at the EPFL (Swiss Federal Institute of Technology). While at EPFL he developed the first real-time end-user monitoring technology and he is the author of two patents on behaviour modelling that are part of Nexthink’s core technology. Pedro currently is a Board member of the Alpine chapter of the Young Presidents’ Organization (YPO), he serves on the Board of several start-ups and he’s an occasional lecturer at EPFL on entrepreneurship and new technologies.
For more information on all business in Europe, please take a look at the latest edition of Business Chief Europe.
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