Geographies in Depth

How Europe's tech sector can catch up with Silicon Valley and China

A man walks on the Pont des Arts bridge as the sun rises above the Seine River skyline in central Paris, France December 28, 2016.   REUTERS/Pascal Rossignol TPX IMAGES OF THE DAY - RTX2WQ68

European tech hubs like London, Berlin and Paris lag behind those in the US and China Image: REUTERS/Pascal Rossignol

Ana Brnabic
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The USA has always been on the frontier of technological research and companies like Microsoft and Apple have set the foundations for the industry. After the expansion of internet, it was possible to develop an idea quickly even with modest resources. This allowed internet companies to develop across the country, with the most successful, rapidly-growing companies favouring competitive environments, like Silicon Valley.

China was quick to follow this trend, which is why the top 10 largest internet companies come from these two countries. There are, of course, some great internet companies from Europe, like Zalando and Spotify, but the number is still noticeably lower than in the USA and China. Furthermore, the majority of the largest 50 unicorn companies are from the USA and China, with only a few from the EU.

A big advantage for American and Chinese companies is their access to a large single market, which companies from the EU also have, but, owing to the differences in local markets, have not found an efficient way to use to their advantage. Years of investment in tech companies and education has attracted some of the best entrepreneurs and engineers to the USA, creating a great environment for innovation and big technological breakthroughs.

The EU is improving its talent through different higher education and academic co-operation mobility projects, such as Erasmus Mundus. However, the USA is still far ahead of the EU, with 18 of the 25 top universities for computer science based in the country. Most of these universities create tech hubs and attract big tech companies, making them a perfect place for young people to prosper in the tech industry. European tech hubs like London, Berlin and Paris are great university centres as well, but they are still lagging behind the US and China. The game changer could be Horizon 2020, the EU’s biggest ever research and innovation programme.

In Serbia, in the first two years of the Horizon 2020 programme, nearly €9 million - from a total of €33 million - was invested directly in start-up and R&D companies. The funds have served as a great boost for these companies and we are hoping that more entrepreneurs and innovators will recognize the potential of the Horizon 2020 programme.

A rainbow is seen over downtown Belgrade, November 18, 2010. REUTERS/Marko Djurica (SERBIA - Tags: CITYSCAPE ENVIRONMENT) - RTXUSEF
The science and tech park in Belgrade is one of the few in south-east Europe Image: REUTERS/Marko Djurica

Encouraging more companies to use the funds and creating a better environment for start-ups and innovative companies is something that the New Leaders for Europe, a World Economic Forum community, should address and promote.

I am really proud of what tech entrepreneurs in Serbia, my home country, have done without any systematic support in the past decade. One of the largest European gaming companies with more than 110 million users worldwide comes from Serbia. We are also home to a biotech company recently declared as “one of the 50 smartest companies in the world” by the MIT Tech Review.

About five months ago, the Serbian government decided to dedicate itself to encouraging more of these companies in the future. We have established the Ministerial Council for IT, Innovation and Entrepreneurship, which I am chairing, to address these issues. We will support the different pillars of the IT industry in Serbia to enable faster development. There is a great demand for IT professionals globally and in Serbia, which is why we will mainly invest in expanding computer science programmes at universities and improving the curricula for IT in primary schools and secondary schools.

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We need IT champions, not only as business leaders, but also as role models. In order to improve the environment for innovation, the government is investing more than €30 million in science and technology parks at the regional university centres of Novi Sad and Nis. This should facilitate spin-offs and start-ups, and create an environment in which young professionals with great ideas can prosper. The science and tech park in Belgrade is one of the few in south-east Europe. It currently houses 47 fantastic start-up and innovation companies, employing more than 400 engineers.

We are also determined to change and modernize different sets of laws in order to allow start-ups and IT companies to explore all possibilities and grow. Moreover, one of my main goals as a minister is to improve eGovernment and alleviate administration burdens for our citizens and companies.

For a developing economy, building an innovative IT industry can support and expedite development, as well as helping to stop and reverse the brain drain. There are fantastic examples of innovation in the UK, Finland, Germany and Estonia that Serbia can use as role models, but the country’s own advantages and great potential should not be overlooked. Europe as a whole needs a new approach to this and we are determined to work together to create it.

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Geographies in DepthEmerging Technologies
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