7 December 2012
Get up, start-up. Stand up for your rights!
European technology currently is in good shape. Skype and LinkedIn are profitable, and Cambridge’s ARM has shipped more chips in 2012 than Intel in its entire history.Magister Advisors recently predicted that in 2013 at least one “new” technology firm in Europe will achieve a $1bn value. Candidates include small loan provider Wonga, e-payments company Klarna and music identification service Shazam.
This is remarkable, in particular in the face of a worldwide economic slump. But what catalyses the creation and development of the next wave of companies in Europe, and how can this be sustained and supported? Telefonica’s Startup Ecosystem Report gives a few answers by analysing technology hub spots across the world. Only two European cities made the top ten (Tel Aviv and London), whilst the rest are US or Canadian. Paris, Moscow and Berlin are in the top 20. After all.
A lot is promising: London offers a range of support networks and capital infrastructure, and Paris’ focus on B2B start-ups creates a range of opportunities. Moscow is home to more entrepreneurs with master degrees than in the Silicon Valley, and in Berlin office space is cheap and access to the Russian and Eastern European markets is good. There are a structural and significant problems though, preventing European cities becoming more popular technology hubs. Access to skills is a big issue. Access to funding is an even bigger problem, with significantly less money flowing into the European startup scene compared to Silicon Valley. This also has an impact on speed of execution.
Venture Capital has re-discovered its appetite for technology firms, and the government also lends more support. Less bureaucracy such as the UK Entrepreneur Visa makes it easier to set up and run businesses, as do R&D tax breaks. Direct funding comes in form of schemes such as UKIIF. Also, the European Commission is currently devising a strategy to make Europe a global player in technology.
Many signs are positive, and they better are. Much more could and should be done however to make access to funding easier. Technology is a key sector and important contributor to our economies, and entrepreneurs and start-ups deserve all the help they need to become big global companies in the future.
First published on the MHP blog on 7 December 2012, read the full post here: