The European Union announced that it is cooperating with 71 investors to co-invest in innovative technology projects in the region. Together, venture capital funds, public investment banks, institutions and corporate venture capital funds represent more than €90 billion in assets.
The so-called “Network of Trusted Investors” was launched on Monday to help fund “high-risk deep technology companies that have great potential, but often struggle in the European market to find the right investors.”
The EU investment comes from the European Innovation Council Fund, which was established to support start-ups that have the potential to scale into “unicorns” – companies whose value exceeds one billion euros. To date, it has invested nearly €1 billion in 251 companies, attracting more than €4 billion in co-investment.
See: European investment shows boom in data startups
Members of the Trusted Investor Network will leverage EIC’s co-investments so that biotechnology companies can access the capital they need to compete on a global scale. They all signed on Trusted Investors Network Charterwhich defines the group’s values and best investment practices.
The launch took place at the EIC Scaling Summit in Athens, where 72 new tech startups also joined the EIC Scaling Club. The EU aims to turn 20% of Scaling Club members into unicorns, and so far they have raised more than €73 million collectively.
Then the committee announced on Tuesday New plans To strengthen the European Research Area, a policy framework that promotes unified research cooperation in the region. Communication focuses on increasing investment, improving the quality of research, and translating scientific progress into economic benefits.
Ultimately, the European Union is trying to demonstrate its commitment to closing the financing gap needed to grow its technology sector to compete with the United States and China. A Google report published in October found that Europe spends just 2% of its GDP on technology research. By comparison, the United States spends 3%, and South Korea and Israel spend more than 5%.
Moreover, in July, venture capital funding reached a level The highest level in two years in the United Statesthanks in large part to AI companies CoreWeave and xAI.
The European Union receives criticism for lagging behind in developing cutting-edge technologies
Just this week, Wolfgang Ischinger, a former German ambassador to the United States, said the technology gap between the European Union and other global superpowers is the “biggest long-term challenge” to the continent’s security, according to Politico.
In addition, earlier this month, former European Central Bank President and economist Mario Draghi said in an article a report The bloc’s lack of innovation has led to US GDP dwarfing that of the European Union by $9 trillion in 2023.
Although Europe’s top three R&I investors are in the technology space, “we fail to translate innovation into commercialization,” he said, driving entrepreneurs to the United States. Currently, only four of the world’s top 50 technology companies are European.
“By joining forces with venture capital, we are responding to the pressing challenges set out in the Draghi Report which calls for bold action to ensure Europe’s competitiveness in biotechnologies,” said Ileana Ivanova, European Commissioner for Innovation, Research, Culture, Education and Cooperation. Youth, in A press release.
Europe specifically lags behind in AI innovation. The region filed just 2% of global AI patents in 2022, while China and the United States, The two largest producersBy 61% and 21%, respectively. Google researchers also found that Europe performs poorly in the areas of artificial intelligence, R&D, and commercial uptake.
See: UK government cancels £1.3bn earmark for AI and tech innovation
“Current gaps suggest that the EU risks falling behind the next wave of AI and needs to step up its efforts to remain competitive,” they wrote. Among other recommendations, the report suggested that Europe invest in AI research to make it more accessible.
Regulations could hinder the EU
Both the Google and Draghi reports placed heavy blame on EU legislation for the region’s struggle to innovate in advanced technologies.
“Innovative companies that want to expand into Europe face barriers at every stage due to inconsistent and restrictive regulations,” Draghi wrote.
He added that inconsistent regulations across EU member states limit cross-border operations and hinder innovation by preventing companies from expanding.
“Since 2019, the European Union has introduced more than 100 pieces of legislation affecting the digital economy and society. The challenge is not just the sheer number of regulations, but the complexity,” said Matt Brittain, head of Google in EMEA, in a statement. . Blog post.
But legislation such as the EU’s Artificial Intelligence and Digital Markets Act can hold back big tech companies like Google just as it does start-ups, which is why it has been open in its criticism. In fact, the bloc represents a huge market 448 million peopleBut regulations prevented technology giants from launching the latest artificial intelligence products in the region.
For example, Google’s Bard chatbot launched in Europe four months after it launched in the US and UK, following privacy concerns raised by the Irish Data Protection Commission. Similar regulatory opposition is believed to have delayed the arrival of its second iteration, Gemini, in the region.