Entrepreneurship and the European Digital Ecosystem

Timhoettges etal
DLD conference

What are the challenges for the digital ecosystem in Europe? What political strategies do you need to foster an investment friendly climate. Klaus Hommels puts together a group of European politicians and industry leaders to discuss the national and supranational level.

Klaus Hommels welcomed on stage Axelle Lemaire, Minister of State for Digital Affairs (France), Ed Vaizey, HM Minister of Culture, Communications and Creative Industries (UK) and the CEO of Deutsche Telekom Timotheus (Tim) Höttges. It was a very emotional talk about the needs of European start-ups and entrepreneurs and how can politics deal with it.

"Leave us alone!" - the opinion of most start-ups when it comes to politics. Klaus joked about the word "politics": poly is greek for "many" and "tics" are little bloodsucking creatures.

But France and UK seams to be better than that, engaging to show the community that they care about their needs. Lemaire meets start-ups on a regulary basis with some other ministers at the Elysée Palace in Paris and they could see the concrete result of their work last week at CES in Las Vegas. France companies won 20 innovation awards. France developed an ecosystem for their start-ups and entrepreneurs even if 60% of the companies are located in Paris (4,000 start-ups, 10 incubators). 9 french cities are now labeled as "French Tech" cities, e.g. Bordeaux about wine tech or in the Alps there is a connected ski cluster. The people feel proud now because it's the first time in the history politicians addresses start-ups and entrepreneurs to help them grow their business, reach different markets and conquering the world. France even offers tax credit for innovations and research (R&D tax credit).

Vaizey gave us a nice overview what UK is doing for their tech scene. For example he promised a 95% coverage of fast internet access in UK, by the end of the decade he would like to have 100%. Even in schools, he said, it is necessary not only to learn how to use apps, it's better to know how to code apps. This literacy should be implemented in the curriculums. But a long time no one was listen to his ideas. Eric Schmidt, CEO of Google just had to ask about it - and the government put it into the curriculum within a month, he joked. In London the government supported the start-ups with its own "Tech City" in East London where they already had offices. It was a beacon, a signal to the English community that the government really wants to invest and take their business serious. A special visa also helps to reach high potentials from all over the world and offers an easier way of immigration. Now 13 clusters all over the United Kingdom are existing beside the Tech City in London.

"Once failed always failed: that’s the mindset of German equity investors.”

The CEO of Deutsche Telekom, Tim Höttges, is part of the other side. He asked for regulations by the governments and "blamed" the Silicon Valley as well as the German mentality about failure. The Silicon Valley, e.g. companies like Facebook and Google are offering communication for free, but the investment for the infrastructure to communicate is offered by others. It is paid by others like the Deutsche Telekom. They earn a lot of money with advertising models but don't invest into the infrastructure. A new mentality is needed, not only in Silicon Valley, he said. The Germans have to change as well. The mind-set about failure is still: "Once failed, always will fail." But you earn a lot of knowledge while failing. Failing is good! That's something VC's and private investors have to learn as well as taking risks. Europe is wealthy, it has a lot of money to spend.

Lemaire second on the last part. Only 250 Million Euros were spent by big France companies for investments. That's not so much for global players. Why don't they invest more into start-ups, take more risks? Another huge problem is the data regulation for Europe. 28 countries, 28 different regulations, but act as one Europe market. That's not very attractive for investors. France is working on a data protection agreement in 2015 to ensure companies doing business in Europe. But Europe should stick together. But do we need more regulations or less? That's the point where the session became very emotional. Do we want the government to regulate your competitors or to deregulate you?

Some questions from the audience also gave some interesting impulses, e.g. why it's not possible to fail faster in Europe? Lemaire answered, that it only takes 3 days in France to exit a company. It's quicker than anywhere else in Europe.

Mentioned in this live blog

Lak 07082017 1006 quad
Klaus Hommels
Quad dl pressebild hoettges en
Timotheus Höttges
Deutsche Telekom AG
Chief Executive Officer
Deutsche Telekom AG
Axelle lemaire bw
Axelle Lemaire
French Ministry of State for Digital Affairs
French Ministry of State for Digital Affairs
French Ministry of State for Digital Affairs

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