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The Wheels of Innovation Are Turning

Trust high-tech to disrupt the world order. In the era of digital innovation, Old World Europe is the new kid on the block—a block that was once exclusively occupied by Silicon Valley, according to the savvy speakers assembled for the panel on “Powering Up European High-Tech.” As it happens, the recent rise of Europe-based tech companies comes at an opportune time: Capital is abundant in certain corners, mobile usage is at a high, the talent base is growing, and global markets are instantly accessible via digital platforms.

“What’s happened in the last few years in Europe is we’ve unleashed ambition,” said Fred Destin, a partner at Accel Partners who has worked on both sides of the Atlantic. “There’s no one face of Europe, and that’s the beauty of it. Whether it’s FinTech in London or e-commerce in Berlin, innovation springs from everywhere.”

And once sprung, innovation can generate momentum and gain territory. Europeans are learning to launch not just in one market but multiple ones, said Riccardo Zacconi, co-founder and CEO of King Digital Entertainment, the company behind wildly successful online games such as “Candy Crush.”

Companies in Europe also have turned a shortcoming into a distinct advantage. Having small home markets makes it necessary to consider international markets early in product development, said Graham Cooke, founder and CEO of Qubit, a data intelligence company. By contrast, companies in the U.S. tend to focus on its vast market and have to catch up with global demand later.

The panelists agreed that while the European mindset as a whole is shifting in ways that foster innovation, two key barriers often confront high-tech entrepreneurs: namely, prohibitive regulation and an overly cautious approach among investors.

For serial entrepreneur Sara Murray, much has certainly changed since she started her first company in the 1990s—back when “the only place you could get money was the bank.” Since then, she has pitched to numerous venture capitalists, both from the U.S. and the UK. In her experience, UK investors continue to be much more wary. As founder and CEO of Buddi, Murray is in the business of designing and producing hardware such as wearable monitoring devices for use in the criminal justice and health care arenas. She found that U.S. investors were excited about hardware, while their UK counterparts preferred software. And whereas American investors are comfortable with 100 percent growth initially, those in the UK would balk and want to wait a year to see what “real” numbers are.

Indeed, there is more investor nervousness as well as tighter regulation in European countries generally, said Nick Bray, chief financial officer of Sophos, an IT security company. “U.S. investors are prepared to take the risk of loss for profits later.”

Zacconi cautioned that heavy-handed regulation will stop companies from seeding locally and succeeding globally. “We managed to grow and be where we are because we say we grew on the back of giants: Apple, Facebook, Google,” he said. “The biggest risk for Europe is to oppose these giants.”

That said, innovation is alive and well in Europe. “The key difference between us and [Silicon] Valley is time,” said Zacconi. “It takes a long time before you have the ecosystem working—entrepreneurs who are successful who invest in new entrepreneurs.”

How long that will take remains to be seen. But one thing is certain: There is no stopping the digital revolution and the e-commerce possibilities that come with it. “We are in huge a renaissance,” declared Cooke. “There are literally 3 billion consumers online.… It’s not so much about a tech boom, but our life is digitally enabled in everything we do.”