Over the past few years, we’ve seen a number European cities stand out when it comes to innovation. From the university towns of Oxford and Cambridge in the UK to some of the larger centers like London and Berlin, places big and small have made innovation and entrepreneurship a key part of their growth.
In fact, these days Europe as a whole is increasingly encouraging innovation, with exciting consequences for European markets. We only need to look to other regions of the world to see the positive impacts of the development of an innovation ecosystem. Silicon Valley is the premier example of such a region – growing into the world’s high tech powerhouse over the past fifty years.
However, in my estimation the challenge for Europe is the pace of our transformation. We’ve fallen behind the US and Japan when it comes to innovation as a percent of GDP, and may well be surpassed by China in the future – all reasons that innovation has become, and must continue to be, such a priority for European nations.
To help address our innovation gaps, the European Commission established Horizon 2020, a research and innovation funding program that will grant approximately 80 billion euros in funding to companies between 2014 and 2020. Horizon 2020 funding is focused specifically on helping Europe remain competitive with other global innovation regions by helping companies take their ideas and solutions to market. The areas of innovation being targeted are quite widespread – from energy efficiency and green transportation to ICT and nanotechnology. Innovative projects aimed at addressing societal issues are also being funded.
While innovation should continue to be a priority in Europe, we also need to recognize that we will never become Silicon Valley. In fact, we shouldn’t even try. I believe that Europe needs to find our own unique value proposition when it comes to innovation. This will require us to identify our strengths, to work to those strengths, and to find ways to complement what other regions, including Silicon Valley, are doing.
Such a move will require companies and governments within the EU to take more risks – and I recognize that this is not a trait that comes easily to European society. When you think of countries like Germany, you don’t think of entrepreneurs and risk takers. Yet, if you read my previous blog on Berlin, you can see some examples of how one city is encouraging entrepreneurialism. Universities across Europe are doing the same; many universities have introduced schools of entrepreneurship – aiming to support young people who are uninterested in working for traditional businesses and would rather start up their own.
It’s an exciting time for Europe. The reality is that entrepreneurship is essential if our economy is to thrive. We need to encourage companies to be innovative and to take risks – because if we don’t, we could get left behind by other regions more willing to look outside the box.
As the East Regional Head for KPMG in Berlin, Frank plays a very active role in business networks connecting economy, science and politics in Berlin. As Berlin is a hub for Startups and new businesses, Frank is focusing on current business developments with regard to digitalization, Industry 4.0 and building bridges between the old and new economy. Frank specializes in the areas of Risk Management, ICS- and Compliance Services, and has built an excellent international network, that he applies to his current national and international clients, including Deutsche Bahn or Axel Springer in the Eastern Region.
Quarterly global report on VC trends published jointly by KPMG International and CB Insights.