Economy of Europe : Updates and Discussions

« L’Europe est à l’orée de devenir une superpuissance mondiale dans le domaine technologique »

"Europe is on the verge of becoming a global superpower in the technology field".

At the VivaTech trade fair in Paris, Niklas Zennström and Tom Wehmeier, directors of Atomico, Europe's leading venture capital fund, point out in an article for "Le Monde" that more than 300 companies valued at over a billion dollars have been founded in Europe.

Europe has the potential to create more value in the tech sector than any other region in the world. Our tech industry has long been overshadowed by the US and China, and speculation about Europe's ability to catch up with its predecessors still dominates the debate. This seems unfair to us, not only because the European ecosystem is relatively young, but also because there are clear signs that Europe is on the cusp of becoming a global superpower in the technology field.

The key figures are well known: European tech is a $3 trillion industry, with an annual growth rate of 27% since 2015. More than 300 companies valued at over a billion dollars have been founded in Europe, from a diverse base of 29 countries. But Europe's potential is revealed on closer analysis. Growth comes from a combination of innovation, talent and capital, which every superpower needs. Despite the economic downturn, there is ample evidence of the fundamental strength of the industry.

The flow of emerging high-tech companies is almost equal to that in the US. Both regions now create the same number of new start-ups every year. Thirty per cent of all global funding for early-stage companies (i.e. rounds of less than $5 million) went to European start-ups, compared with 36% for the US. This gap has halved in five years. What's more, Europe is showing greater dynamism, with a compound annual growth rate of 24% over the last ten years, compared with 4% in the United States. At this rate of growth, Europe will overtake the US in five years' time.

Constant investment in Europe

The conversion rate of emerging companies into unicorns is the same; 1.9% of start-ups financed from seed become unicorns in Europe as in the United States. When it comes to impact technologies, Europe has an advantage, with over 50% of seed investment going to companies that contribute to the UN's Sustainable Development Goals (SDGs). This level of investment has remained constant despite the recession, while investment in North America and Asia has fallen sharply.