Towards a strategic approach to strengthening the European tech ecosystem

For Numeum and Bitkom, the European Union needs an effective strategy. This would involve concentrating on a few champions, whose 10 billion euros of funding under the “European Tech Champions Initiative (ETCI)” and targeted European business support measures will, thanks to a trickle-down effect, benefit the entire technology ecosystem and thus the European economy. To achieve this, Europe needs to clearly define its strategic targets and provide a framework conducive to the emergence of new European champions around three key axes:

1. A clear and uniform European legislative and regulatory framework;
2. Levers that encourage major public and private players to become early customers of European disruptive players;
3. An attractive European working environment.

To meet these challenges, Numeum and Bitkom have formulated 8 recommendations for European policy-makers.

Creating a level economic and legislative playing field :

1. Harmonize European legislation to encourage the emergence of promising, innovative startups. To ensure that new regulations do not have unintended negative effects, the European Union could solicit these players upstream so that they can verify their impact.
2. Objectively define terms and targets (Deeptech, Startup, Scaleup) for a tactical approach at European level ;
3. Promote new regulatory sandboxes for deeptech startups beyond the national level.

Supporting the business development of European startups as a complement to financing:

4. Implement a genuine European preference strategy to guide European public purchasers in their technological choices;
5. Rethink and cover the risk (or rather the perception of risk) associated with private commissioning:
   • Rethinking the accounting definition of quasi-equity ;
   • Create incentives to encourage private companies to contract with startups;
   • Finance insurance for private contracts (or quasi-equity financing to accompany these contracts) above a certain amount.
6. Strengthen diversity on the European scaleup scene, for example by :
   • Requiring that at least 30% of ETCI members’ positions of responsibility be held by women;
   • Encouraging venture capital firms to commit to publishing diversity reports.

Tackling the talent shortage by offering an attractive European working environment:

7. Make the European Union a place of choice in the world by offering attractive working conditions and facilitating immigration from non-European countries to Europe. This could involve harmonizing stock option rules at European level for employees of companies operating in several countries;
8. In the short term, set up an online platform offering standard employment contracts and practical information, particularly on taxation, for each member state. In the longer term, create a European employment contract for technology startups identified as strategic by Europe. Such a contract would offer companies flexibility in recruitment and enable them to meet employees’ expectations in terms of mobility. It would also provide companies with greater clarity over labor costs, and thus greater legal certainty.