Dear Mr Busoi,
Dear organisers and participants in this event,
First of all, I want to congratulate the organisers of the Global Startup Cities Summit, the city of Malaga and Arturo Villar as the CEO of the Global Startup Cities association, for organising this second Summit despite the special circumstances we are living. When we met at the previous Summit in Cluj Napoca, you committed to make it even bigger and more impactful. You have made it!
It is a great pleasure to be here with you today and to open this Global StartupCities summit, that has as the motto the launch of a bottom-up European Innovation Area action plan for more connections and action at local level towards making Europe, more competitive and more resilient.
A bottom up European Innovation Area is indeed needed to tackle many of the challenges ahead of us in the area of innovation.
Let me start by underlining the main five issues I see in the area of innovation in Europe. Issues that are interconnected with the domains of education and research systems.
Firstly, whereas 34% of the world capital invested in early stage startups is invested in Europe, we struggle to build big tech leaders. Actually, we have actually only a 12% of all unicorns, a way to call to the startups with a valuation above 1 Billion euro, while US and China have a 40% of the unicorns each.
Secondly, the innovation economy in Europe is heavily concentrated with more than two thirds of the European scaleups located around one or maximum two cities per country. The data from 2018 shows that 10% of the European cities host almost 70 % of all scaleups and more than 70 % of the capital raised. Consequently, Europe’s startup hubs are growing the fastest and pulling away from their smaller rivals.
This heavy concentration leads to an innovation divide among Member States and within Member State.
Thirdly, we are supporting innovators in the same way researchers have been supported in the last fifty years, with non-refundable grants. We need a paradigm change in funding innovators. Actually, at this moment more that 50% of the whole funding for Research and Innovation in the US is VC backed.
The new European Innovation Council is moving on this direction with the EIC Fund created in June and that will follow the VC model to support deep tech startups in their growth phase.
Fourthly, we have many vibrant, local innovation ecosystems across Europe, but they are not interconnected. We need to bring together small local ecosystems to be able to compete with the big tech hubs in attracting talent and capital. We need to work closely with cities, like the ones represented here today, to make this idea a reality.
The European Institute of Innovation and technology with its 1650 partners and the new Innovation Ecosystems Workprogramme of Horizon Europe will contribute to the same objective of connecting eosystems across Europe. I suggest you to work closely with them.
Fifth, nearly 90% of the founders of startups are men and this figure increases with the age and the development stage of the firms.
This should change, and to make it change you will need to broaden the kind of innovation we support. We should provide support to innovations that are driven from founders who have an idea to solve a challenge. Of course, this idea will later be implemented using technology. We have been too focused on technologically driven innovation and it is having a negative impact on women founders. For this reason, it is good that we consider both kind of innovations in our approach.
I am proud to announce that since I became Commissioner in charge of the EIC, the percentage of women led beneficiaries of the EIC have grown from a 2.2% to a 34% of all EIC beneficiaries. But more needs to be done to get closer to the 50% figure.
I could continue providing more evidence to underline the strenghts and weaknesses of Europe’s innovation ecosystems, but allow me to finish emphasising that while there are many tens of European, national and regional innovation programmes across Europe, there is not a well structure framework that would provide consistency and direction to all these political and financial efforts that the public administrations are doing to spur innovation in their geographical jurisdictions.
I like this initiative from Global StartupCities to build a bottom-up European Innovations Area.
I want to refer now to four of your flagships programmes and to explore ways in which we can work together.
First, your movement of the best 100 entrepreneurs coming from non-traditional tech hubs in Europe brings fresh air to us, policy makers, and to the society in general because we only hear in the media about the big entrepreneurs in the big tech hubs.
It is high time we give voice to promising entrepreneurs from second tier cities or from rural areas to understand better their needs and to draw new policies targeted to their needs.
The European Institute of Innovation and Technology and the European Innovation Council can certainly provide you with public information of their beneficiaries, including those who were awarded a Seal of Excellence, to ensure your programme support the best 100 entrepreneur from all countries across Europe.
Second, your Women InvCEO programme is fantastic that it combines actions to attract more VC funds to startups led by women founders, with actions encouraging more women to become VC Fund managers. And it is important that it happens within the second tier cities and the rural areas
The European Innovation Council Fund could support you in this endeavour, as it is becoming a magnet to attract VC Funds across the world to invest in European Startups. We need to ensure that this flow of funds reaches out to the best entrepreneurs wherever they are located in Europe, being in Eastern or Southern Europe or in rural areas.
My new “tech start women” programme will also contribute to increase the number of women-led startups.
Third, your “Flash u training” programme to provide Massive open Online courses for the development of specific skill sets for a new workforce contributes directly to the objectives of the new European Digital Action Plan and with the European University Alliances. New need to ensure that all efforts to increase talent for startups are coordinated at EU level.
Finally, your Startup Village programme is an initiative that is very close to my heart. I have supported this idea from the beginning and I hope you can work closely with the new Innovation Ecosystems Workprogramme of Horizon Europe to ensure that we have a high impact on the development of rural areas via innovation.
I know that my colleague, the VP Suica, will talk this afternoon about Startup Villages because it is very important it becomes one of the flagships of the new long term strategy for rural areas.
Your bottom-up initiative is certainly commendable and it fits perfectly with my efforts to build a European Innovation Area. An European space that emanates directly from my hearing at the European Parliament. It will complement the European Education Area and the European Research Area with an European Area for Innovators to cover the three corners of the Knowledge triangle.
An European Innovation Area that will provide consistency and clear directions to increase the effectiveness of the many existing innovation programmes. It will have a strong focus on regions to ensure that nobody is left behind in the Innovation Economy, including second tier cities and rural areas. This is why this morning I have presented a first ever joint action plan between the Committee of the Regions and the areas under my portfolio. Innovation in regions is at the top of this Action Plan,
This European Innovation Area will ensure that technologically driven and non-technologically driven innovations receive adequate support increasing the number of women led startups opening paths from education directly to innovation, in addition to keeping the current paths of moving from research to innovation.
We also need to change the way we support innovation in Europe by looking for synergies among EU programmes, for example Horizon Europe and the Structural Funds, and following on the path of VC style direct funding to startup in line with the new EIC Fund model.
I want to end with making an open call to all the mayors that are part of the Global StartupCities constituency to continue working together to build a European Innovation Area where no one is left behind.
I am confident that with your help we will bring Europe to the road of recovery and growth. A strong and united EU innovation and startup ecosystem across Europe with the cities and regions as key active players is our future!
Thank you for your attention.