EIT Digital has outlined its new plans, the Strategic Innovation Agenda, for a strong Europe in the digital world, and is helping European companies to lead innovation.
Yesterday, EIT Digital CEO Willem Jonker presented the organisation’s Strategic Innovation Agenda for the period 2020-2022 to European Commission Vice-President Andrus Ansip, MEP Eva Kaili, and EIT Digital Supervisory Board chairman Raymond Freymann. The SIA outlines EIT Digital’s plans to strengthen Europe’s position in the digital world and to help business and entrepreneurs to be at the forefront of digital innovation.
How EIT Digital is helping Europe to lead digital innovation
EIT digital uses its key instruments to achieve the following aims:
- Drive market uptake of top European research results: EIT Digital facilitates cross-border innovation collaboration to bring promising, mature research results out of the lab and quickly into the market. For the first time ever, EIT Digital opens in 2019 its call for proposals beyond its 200-strong partner network to generate even more commercially competitive innovations.
- Support international growth: The EIT Digital Accelerator helps fast-growing European deep tech scaleups to expand internationally and become dominant global players.
- Fuel the European market with digital entrepreneurs through education: The EIT Digital Academy equips talents with solid technical knowledge and the necessary entrepreneurship and business skills to spot opportunities, understand market needs and capitalise on them.
The core challenges to be addressed
SciTech Europa met with Jonker in Brussels to discuss the SIA and how EIT Digital will continue to provide invaluable support for Europe’s digital businesses.
According to Jonker, there are five core challenges to be addressed in order to realise a strong digital Europe:
1. We need to bring European values to the digital world by building global European digital businesses and scaling up disruptive digital ventures that have potential for global success.
2. We have to further address fragmentation to support digital enterprises and entrepreneurs. The completion of the Digital Single Market must be accelerated and the whole of Europe turned into a “de facto” domestic market for European entrepreneurs.
3. It is necessary to raise R&D investments in digital technologies and emphasise on software, where currently American and Asian companies are leading the way.
4. We must strongly increase deep tech innovation investments and take mature research results from laboratory to market, especially by means of entrepreneurship.
5. And we have to adapt the European education system to the digital reality, to equip people with the right digital skills, and to deploy digital technology in order to support education.
How will the newly-announced Strategic Innovation Agenda 2020-2022 change the way that EIT Digital operates?
The Strategic Innovation Agenda is essentially a growth agenda, and within it there are several activities which we will now begin to step up. For instance, will grow mainly our education activities and the recruitment of digital talent for Europe, and at the same time we will ornate our innovation activities with an increasing focus on business creation – which means the creation of start-ups, whereas in the past we had a somewhat broader agenda.
Our true added value is in taking the results of research and really packaging them in such a way that they can be absorbed, either by the industry or the market. To achieve this, you need a minimum number of viable products, and you have to create companies that can go on to be acquired or invested in; that is the journey that we have come to learn, and what Europe needs is tangible investment opportunities.
Thus, the SIA is not a departure from our past. Rather, it is a more focused vision of how we can have an even more profound impact on sustainability by creating tangible assists as a result of our innovation.
How would you like to see progress towards the Digital Single Market being sped up and so address the fragmentation we see in Europe at the moment?
The main issue that many companies experience when they are trying to grow is to be able to do this at speed, and achieving this requires regulation; you have get rid of geographic boarders, but even when this is addressed, it still needs to be completely implemented. And this has to go hand-in-hand with the group taxation system, which is always a concern when you make a single market. A joint approach is therefore required with regard to labour, taxation, regulation, and towards the breaking down of barriers.
Examples of such barriers are geo-blocking and roaming, and while these have now been addressed by the European Commission, they have only been done so recently, and yet the work towards the Digital Single Market began 15-20 year ago. Of course, that is not to say that this is not positive progress, but it does demonstrate that things are taking a very long time to be realised, and moving forwards future a combined effort will be required, especially when it comes to the issue of labour – we don’t want to see a resistance against progress in the same way as we are seeing a debate around robots in factories taking the jobs of the human workers, for instance. In this example, I believe there needs to be a blended model, where robots and humans will work together.
A strong competitive advantage is provided by a large home market. In Europe, Germany has one of the largest home markets, but compared to China or the USA it is still relatively small. And in addition to this, access to finance is crucial. In Europe it is still difficult for a business to scale-up to the point where it is worth around €10m – which is when it will then be on the radar of the big investors.
Another issue we have in Europe is that when our successful companies exit, that is seldom the result of an Initial Public Offering (IPO); often, it is an acquisition and, especially in digital, it is typically non-European companies which place a high value on digital businesses. It is important to note that the price is what you pay, and the value is what you get, and in Europe there is often more of a focus on the price, rather than the value – and this, certainly with digital, stems from the fact that the value is yet to be proven with new technologies.
This means that European digital businesses are more likely to be acquired by non-European businesses, as they place a higher price on the perceived value.
This, then, shows that it is not just about creating and nurturing successful companies, but it is also about making sure that we build a European digital industry, and that requires strong players.
Education is a key focus of EIT Digital, both now and in the future. How, are you working to ensure that the right digital skills are being taught in order to meet the digital reality?
Firstly, there are a couple generic digital technologies that a lot of people should be a lot more educated about, even if they don’t use them on a daily basis. The chairman of Nokia, for instance, is very keen on having everybody understanding machine learning, but that doesn’t mean that everybody has to learn the mechanics of this, but that they should at least have a basic understanding of it.
People should, for example, understand more about blockchain and AI in a general sense; people should understand the value of data and what you can do with it, but also its limitations and pitfalls. Then, there are also areas which require specific knowledge, and people have to be prepared for that.
That is, if someone is employed within the automotive industry, for example, is seeing digital innovation happen across the board, and so if someone is employed as an engineer in this sector then they have to understand how things are changing; they need to know about radar technology, how you plan the multi-media environment, the security of the cyber-physical systems and so on. Employers will need to hire a lot of new staff who have the necessary skills, but they also have to educate their existing workforce, and this is done via very specific courses which can be problematic because we simply have the teaching capacity in Europe to cope with this. We therefore also need to teach the teachers so that they have the skills to transfer.
This is also true for industries where digital is not as pronounced as yet. In agriculture, for instance, the landowners need to know about numerous aspects of digital (whether it makes sense to fly a drone over their potato field, for instance – they should understand what this drone is doing, what the benefits are, and so on).
Of course, digital has a risk of being hacked, but even in the area of cybersecurity there is still a lot of need a lack of unawareness, while there are also those who scaremonger around of issues of cybersecurity, and that is clearly not helpful. What is needed again is more skills and a better understanding.
How do you hope to improve on the current EIT Digital Accelerator in an effort to provide the best environment for digital scale-ups? How can it be ensured that mature technologies are taken from the lab to the marketplace in a more efficient manner (and how will EIT Digital’s increased focus on deep tech within the SRA 2020-2022 help here)?
The EIT Digital accelerator has always focused on deep tech. In the early days, we believed that it was start-ups which required the most assistance, but we came to realise that it is in fact scaling-up that poses the biggest problem.
The European Institute of Innovate and Technology is this focused on scaling-up companies that have a strong technology footprint and basis to work from (that is what we call deep tech). Deep tech emerges from technical R&D, and that means you can be selective in the topics that you go for. We choose these because they fit with the nature of our organisation as we work closely with universities, researcher organisations, and tech companies.
Focusing on those scaleups that have a strong technical base has several of advantages, including the fact that they have a good technology and are typically a first mover; they may have mastered the technology better than others because they were able to protect it with a good IP, and so on.
In Europe, if you do not have a technology differentiator, then you have to be a fast grower in the market so that you can establish a very strong position but, as we have already discussed, this is difficult due to the fragmented digital European market. Europe is thus at a disadvantage because we are very good at technology, we have very good universities, and we are very talented people, but we don’t have a very strong integrated home market, and this now needs to be addressed in order for European digital scaleups to be able to go on to hold a dominant position, which will be crucial as we move towards the digital future.