Vision

Europe has made great progress in the last decade, with hundreds of tech unicorns, a thriving venture capital industry, and many global market leaders. However, Europe has also fallen farther behind the US and China, whose tech giants now dominate the digital markets to a large extent.

Despite these challenges, the IE.F believes that Europe can regain ground as a key economic power, but only through a bold, coordinated effort to unleash our competitive power, especially in emerging technologies.

The IE.Fs supporters are not just united by economic goals. Rather, the IE.F is driven by the collective concern that Europe’s core values, which have brought more than seven decades of prosperity and freedom to a continent once ravaged by wars and rivalries, are coming under pressure on many fronts at the same time. Convinced that Europe's security and global position are directly linked to its economic strength, the IE.F is committed to the future of Europe as a bastion of democratic values and economic progress.

The current boom cycle in generative Artificial Intelligence has shown the potential importance of this technology to rewire entire sectors of the economy, even changing the nature of work itself. But the cost of AI infrastructure and computational power already indicates that much of the market gains are flowing to established players, primarily from the US. To compete, Europe has to play to its strengths and harness its untapped reserves of sector data and domain knowledge. The EU's recent adoption of the world's first AI regulation (AI Act) has set much-needed guidelines to ensure an appropriate balance between innovation and risk protection. However, regulation alone will not make Europe competitive; our startups and scaleups will. If the emerging AI market continues to consolidate into the hands of a few global players, it can be assumed that it will take decades for Europe to catch up.

A key element that underpins not only the AI economy, but also the tech economy in general, is cloud computing & infrastructure. From its beginnings, the IE.F has fought for a more competitive landscape in which Europe’s emerging players have a chance in a market already dominated by non-European hyperscalers. Indeed, our 2019 study on this warned of the potential for monopoly power and the need for multi-cloud solutions. The current investment gap – whereby US market leaders make multi-billion investments in each major European country, means that Europe’s economies, governments and citizens face an evermore critical dependence on this infrastructure. The IE.F works to ensure that Europe stays competitive in this sector so that our companies can still earn a place on the tech platforms of tomorrow.

Experts in cyber ​​security have long argued that Europe is under constant and massive attack, with threats ranging from ransomware to espionage and theft of intellectual or trade secret property. The IE.F works to ensure that the EU’s current and coming Cyber Security measures are implemented to protect European innovations.

It has long been clear that Europe missed out on the economic potential of the platform economy, which is why the Continent now pins much of its hopes on so-called Deep Tech. The universities, research centers and global champions of Europe produce a staggering amount of research-intensive discovery in sectors including biotech & pharma, quantum, chips, alternative energy, space tech and more. These technologies often take a long time to reach the market, but they represent the markets of tomorrow. Much of Europe’s success and sovereignty will depend on our ability to exploit them and produce and maintain global players in these fields.

The IE.F has been delighted to see two influential reports published for the European Union in 2024, by Enrico Letta and Mario Draghi respectively, that point out Europe’s deficits and actions needed to become more competitive. We welcome the increased attention to this issue and are working to help ensure that the many useful suggestions are translated into actions that have real impact.

The IE.F has worked in a tech-agnostic way from its inception to ensure better conditions for startups & scaleups. A key piece is the access to growth financing, so that our successful companies can compete on global markets. We have authored numerous studies on this topic and continue to work to raise awareness on this issue, especially given the need to help entice more institutional investors (e.g. pension funds) to invest in Europe’s own innovation economy.

But beyond just the immediate needs of startups and scaleups, Europe has recognized the need to finally deliver on its long-held vision of a Capital Markets Union. Currently, a large number of Europe’s most promising founders or scaleups turn to the US market for VC financing or exits. This is because, despite its growing landscape of venture capital, Europe has no equivalent cross-border capital pools or even investment culture that can compare. Ironically, many individual countries do quite well, but we will only reach our potential when investors, founders, and capital markets are truly operating in a pan-European way.

As noted in the context of our above agenda on deep tech, and as highlighted in the Letta Report, Europe’s best opportunity is to improve how much of its tech R&D and innovation gets to market. We will continue to promote more entrepreneurial training at the university level, better regimes for institutions to let professors or researchers bring intellectual property to market, and a stronger ecosystem of tech transfer offices.

Often lost in all the focus on tech and capital is the fact that Europe has a competitive advantage in an even more precious good: talent. Our universities produce world-class researchers, programmers and founders, and many European cities dominate the list of most attractive places in the world to work and live. But for Europe to become the place where founders from all over the globe would prefer to start a new venture, much needs to improve. This ranges from less burdensome employee stock option programs to better systems for visas and movement of workers across the Continent.

From its inception, the IE.F has fought for free and fair competition in digital markets, calling for ex ante regulation in the platform economy to curb monopolies or unfair practices in areas such as search engines, operating systems, or app stores. We were therefore deeply engaged in promoting and fine-tuning the EU’s Digital Markets Act, which has been designed to ensure that gatekeepers give other startups and scaleups a fighting chance. As the EU’s work turns to the crucial realm of enforcement, we will continue to stay involved in this effort, since the existence of many European startups and even whole sectors depends on it.

Since its founding, the IE.F has regularly joined various initiatives to counteract Big Tech's most aggressive and anti-competitive practices. We will continue these efforts in the coming period - because the application of new antitrust instruments to restore open markets has only just begun, and the responsible authorities need all the support they can get from the ecosystem.