LBS, in collaboration with Founderslane, assembled leading experts for the inaugural Digital Europe Evening to solve lagging competitiveness in Europe.
Academics, policy makers and practitioners gathered to discuss the World Economic Forum and McKinsey Company Insight Report: Innovate Europe: Competing for Global Innovation Leadership.
Attendees acknowledged that strong initiative on innovation in Europe is badly needed. Private investment in research and development (R&D) in Europe was US$90 billion less than the US in 2015, while public R&D investment remained below the level of 2010. In 2016, Europe attracted only 11% of venture capital and corporate investment in AI, while the US and Asia captured 50% and 39%, respectively.
Michael Jacobides, Professor of Strategy, Innovation and Entrepreneurship, and a leading expert on platforms and ecosystems, told attendees: “There is a struggle to get away from an economy based on exclusion and privilege, which we give certain groups because we don’t know any better. But we do know better. For example the UK Financial Conduct Authority has a regulatory sandbox but we are seeing the dissolution of that. People like efficient regulation but they don’t like to lose the protections. You see there is an undercurrent of technological and regulatory change.
“Platforms are simplifying our approach and the nature of the products and services on offer. Technology allows us to connect what was previously unconnected. The experience for consumers is more seamless - it’s all encompassing. There is a yin and yang of platforms and ecosystems. The yin is customer-centricity and simplicity and yang is the complexity in the way you can create alliances for ventures.”
Research shows that emerging digital ecosystems could account for more than $60 trillion in revenue by 2025 (or more than 30% of global corporate revenue), and yet only 3% of established companies have adopted an active platform strategy.
The paper highlights the fragmented nature of European innovation and presents ten point plan to build an innovation ecosystem the continent deserves:
The hope is by implementing these tenets Europe could create its first large platform technology businesses. The report goes further by setting out four goals to be met in four years: Eliminate the research and development funding gap with the US; make at least 30% of government data available for research; double the number of female tech entrepreneurs (5% of tech founders were women in 2017); And to double the share of digital innovation requirements in tenders for Europe’s €2 trillion annual public procurement spend.