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THE DIGITAL AGENDA
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and financial agents in different sectors contin-
ue to lack the capacity to translate innovation
into new business projects with prospects for
high growth. This is no trivial issue. Without
successful digital companies, the European
business ecosystem is at risk of premature age-
ing and technological obsolescence. This would
leave European companies in a position of de-
pendency, easily dominated in the medium term
by their non-European digital competitors,
some of whom are insatiable global giants.
Is Europe afraid of risk?
Compared to the USA, this would appear to be
the case. Any undertaking involves a degree of
individual risk and great determination to over-
come obstacles (or a high degree of motivation
by the prospects of success); in order to succeed
one must be intensely committed to the project.
Despite this, the chances of success are low.
Although I don’t want to become embroiled
in sociological or cultural issues (which are not
my specialist area) the educational, social and
business model in the US strikes me as more in
tune with the challenges posed by this kind of
risk. However, many of the most talented indi-
viduals in the entrepreneurial ecosystem of
Silicon Valley, including CEOs and founders, are
not originally from the US, and many of them
are European. Areas of significant difference be-
tween the USA and Europe include the scale of
incentives – primarily financial – associated with
successfully developing an idea, the existence of
a technological and financial ecosystem that
supports entrepreneurs through the develop-
ment process, and the social importance at-
tached to business success and failure.
The drawbacks of operating without a
single market
Although there is free movement of goods and
people within the EU, in practice there are still
substantial barriers to sales between different
European countries, and these barriers are very
hard to remove. The EU has 24 official languag-
es, 27 different political, tax and administrative
systems, different sets of technical regulations,
and hundreds of hidden barriers. All of these
factors create practical obstacles to free trade in
products and services.
This creates a purely economic factor that
goes a long way towards explaining the differ-
ence between the USA or China and the EU in
the entrepreneurial sphere. Any project in the
USA has immediate access to a service market
of more than 300 million people who share the
same language and all live in a high-income
country, while the “pan-European” equivalent
of this market does not exist in reality, and is
instead constituted by a series of far smaller na-
tional markets. In other words, there is no need
to explain Europe’s relative underdevelopment
in the entrepreneurial field with reference to the
continent’s alleged risk aversion. There is a clear
size factor involved.
It is far from easy in practice, to develop
business ideas – however innovative they may
be – that are truly able to cross Europe’s na-
tional borders, and as a result the volume of
such intra-European economic transactions is
almost negligible. The statistics indicate that
technological and digital business primarily
takes place within the national borders of indi-
vidual countries, and between each country and
North American companies. Activity between
European individuals and companies across na-
tional borders is almost inexistent.