Europe might be successful in a variety of fields and practices but the one thing that Europe hasn’t been able to tap into has been the startups. It was largely accepted that Silicon Valley in the US was where all the innovations happened. But that hasn’t been the case for the last couple of years. The novelty nowadays can come from any other part of the world and investors are actively working to find unique ideas and fund their development.
The continent that has been visibly inactive during this fintech revolution has been Europe. For the most part, Europe has failed to launch the so-called “unicorn” startups, the independent companies worth more than $1 billion and stayed mostly quiet. While Africa has established itself by producing multiple unicorn startups and becoming the hub for technological innovation Europe has been largely flying under the radar.
Northern Europe is in the lead
What has often been said is that while Europe has definitely introduced some technological innovations to the public it has failed to consistently put out these technologies and hence fell behind in the long run. When we talk about Europe and European countries it’s important to distinguish between different countries because contrary to what you may believe the situation is not all that similar, at least when it comes to technology adoption and innovation.
Estonia has often been hailed as the tech capital of Europe because of its high tech adoption levels, the UK has been quite successful with startups housing over 50% of them continent-wide, while Norway based companies have been slowly getting into the fintech game as well as catering to established online platforms and focusing on their online services with Norwegian sites offering bonuses without wagering requirements in an attempt to attract more consumers. The shift to the digital world is evident even in Europe. But that’s not necessarily what brings about the change in the way countries see tech startups.
While the growth in this direction has definitely been slow, this was the first year where European startups actually attracted a significant amount of funding. During the first half of 2019 tech investments in Europe reached €19.2 billion across the first two quarters; and when you think about it, Europe actually has huge potential when it comes to technologies, having the access to the world’s largest market. And why stop there? Europe also has access to the biggest variety of markets including the markets that are currently leading the fintech revolution: Africa and Asia.
Another thing that might have caused Europe’s failure to keep up with the rest of the world in fintech is the attitude towards entrepreneurship and tech startups in general. Now they are beginning to be more and more accepted as legitimate careers but this process is very new.
Corporate careers could be to blame
Maybe too many Europeans have been too busy trying to climb the corporate ladder instead of starting their own businesses and trying to contribute to the technological innovation movement.
Despite what the pattern was in the past, it is becoming more and more clear that without technological advances most countries are doomed. They are bound to lose their status and power if they fail to keep up with the rest of the world when it comes to technology adoption and innovation.
So the general trend we’re seeing right now is that Europe is finally waking up to the importance of tech startups, which is inherently good. But whether or not it will be able to catch up with its main partners, the US and China are very questionable. While China is sparing no efforts to become the leader in this category and invests in all the promising startups while promoting the adoption of blockchain technology nationwide, the US seems to rely on its Silicon Valley giants to keep the country’s status as the innovation centre alive and stable.
But the question is whether or not these companies have what it takes to effectively respond to China’s very meticulous and premeditated efforts to keep the technological innovations as a priority. US government has made no effort to boost these companies and their advancements. This might actually present a window for Europe to jump in and establish itself as one of the leading forces in technological innovation. While Europe has no shortage of internal political tensions, it seems to have more energy to dedicate to technological advancements than the US.
Whether or not Europe will be able to keep this momentum is still hard to tell. We know that there has been a rise in the amount and the volume of the venture capitals focusing specifically on Europe so this might actually present the European startups with the opportunity to work on their ideas and actually make them come to life. Although this increase in venture capitals can’t be solely responsible for good ideas in Europe, it is evident that European tech startups need to step up and work hard so they don’t get swallowed up by far superior markets coming at them from every side.