Fear of investing in innovation is preventing promising start-ups from reaching their full potential and that’s preventing growth across Europe, a conference on the future of EU research funding heard.
If European start-ups had the same support as those in the USA it is estimated that over the next 20 years up to a million new jobs could be created and up to EUR 2 000 billion added to the EU’s economy.
But Europe is ‘lagging behind’, according to Kinga Stanisławska, founder of Experior Venture Fund, Poland’s leading early-stage venture investor. She is also a member of a group of business experts that are designing the European Innovation Council, an EU initiative aimed at helping breakthroughs enter the market.
During a conference on the current and future EU research and innovation funding programmes on July 3 in Brussels, Stanisławska explained the importance of entrepreneurs getting more support in the transition from a start-up to a sustainable business and how this would encourage more entrepreneurs to follow suit.
‘Europeans are wary of start-ups, they seem to be quite risk-averse in their attitude and this is what we see everyday in the innovation sector. Perhaps the reason for this is (that) in the year 2000 a lot of people got burnt with the internet bubble or perhaps there just isn’t enough target capital in the market.’
While there are great ideas coming to light, a common thread throughout the conference was the lack of support to turn innovation into growth. In a report published during the conference, the European Innovation Council was proposed as a solution to this problem.
Another group of research and business experts analysed the current progress of EU research and innovation funding and its chair, Pascal Lamy, said that investment set out through the current EU research fund needs to double to EUR 160 billion to ensure Europe can compete on a global stage.
He said: ‘EUR 120 billion would be a bare minimum for the next programme. This is a big increase, but I believe it’s necessary with where the world is going.’
The experts compiled their recommendations into a report where they suggested that the next EU research fund should be made simpler so more entrepreneurs can access financial support.
Estonian Minister for Education and Research, Mailis Reps, who was also speaking at the event, said this is important because ‘today we are losing a lot of very good and important proposals, and the best people, because the funding is just too complex. We really need to try to find simplifications by joining certain jobs together.
‘Europe is the best place for doing research and it should be because of the autonomy and freedom for researchers, and this is the strength that can attract the best people and the best brains in European research.’
As the subsequent president of the Council of the European Union, Estonia will play a key role in convincing Member States that this kind of investment and cooperation is important for the future of the continent.
Many start-ups suffer because investors are too risk-averse. Image credit_Flickr/Berlin Startup Tours
Reps also hopes they can convince private enterprises that ‘investment for the future should not be considered as a cost but really an investment’.
‘Strong research is the basic element of resilience of society, for example, if we have epidemics, natural disasters or if we have any problems then the researchers are the policymakers of politicians,’ she added.
Stanisławska suggests that more investment coming from the private sector, the better. It could come either through corporate funding or successful individuals who have the capital to invest, also known as angel funders, as they are the experts in commercialisation.
‘The private sector is really the one who knows how to commercialise these innovations and then when you commercialise them, you have more jobs in innovation. This creates the jobs, which creates the wealth and then the wealth comes back into the sector because the same entrepreneurs are incentivised to reinvest,’ she said.
European Commissioner for Research and Innovation, Carlos Moedas, who opened the conference, said work on the next EU funding programme for research and innovation will now begin, taking into consideration input from the interim evaluation of the current EU research fund, the group of experts lead by Pascal Lamy and the stakeholders at the conference.
‘The evidence is clear that we need both European funding and national funding for research and innovation. Also, an ambitious increase would demonstrate our commitment to cut the gap with the US and others. And to take leadership in investing in the future.’