One more very interesting #longread and its takeaways coming up below.
A few days ago, an article on «Brain Drain: How Europe is fighting back» was published. Starting off, the editor paints a rather bleak picture of Europe’s technology innovation hub. In the past few years, the US was looking “all to attractive for Europe’s innovative technology”, the editor states. He adds: “There is no doubting that when a European technology start-up is put on the block there is a strong chance it will be acquired by an American company.” However, he goes on to a more hopeful future where Europe is waking up slowly and fighting back against the exodus of startups. More on the specifics of that in a minute.
First, we can proudly say that digitalswitzerland is mentioned in the article as the initiative in Switzerland countering the outflow of talents and startups. We, of course, are convinced that our initiative is important for Switzerland. We know there is a long way to go to become a digital innovation hub – worldwide. But we roll up our sleeves every day and give our best to reach this ambitious aim.
Why is it important to retain startups and talents in the country?
The article raises a few very important issues of why it is important to actually try and retain startups and talents in the country. The same, of course, is true for Switzerland.
“After all, observers ask, what is the point of EU universities teaching and developing engineering talent and generating valuable patents only to have the revenues, profits and jobs that stem from such EU-nurtured technology benefitting American interests?”
“If you move ownership of companies abroad, you also move control of jobs.”
This is very important to understand: everyone who is pushing for more startups is actually pushing for more jobs for tomorrow. Especially in the digital transformation, a lot of jobs will go away and a lot of jobs will be new. If all those new ones will be snapped up by other countries, jobs are going away too. This brings us to what needs to be done:
“What Europe needs are more fertile conditions for tech-driven entrepreneurship which will not only help to keep European inventions in European hands, but also attract more non-European entrepreneurs.”
What are those «fertile conditions» to actually retain startups and talents specifically?
Capital: Do startups have easy access to capital – at all stages?
Switzerland is in the Top Five of the best countries to be an entrepreneur. One of the factors taken into account was the easy access to capital. However, in a different blogpost we already stated that this is not entirely true if you dig deeper:
“At the moment, Switzerland is a very good country to found your startup in due to many reasons. Even capital to kickstart your startup is well accessible. Nonetheless, it is true that bigger sums, for example for international expansions of existing startups, are not widely available.”
Expert Opinions on the Sharing Economy in Switzerland, March 30, 2017
And here lies the crux of the matter. The article is addressing exactly this challenge for startups in all of Europe:
“It’s when a company begins to succeed that predators begin circling. This is when the start-up needs further investment, and possibly a complete buyout, so that it can hire more people and scale up into a bigger company (simply known as “scaling”).”
“Continental Europe currently does not create new growth businesses as well as other parts of the world, Silicon Valley in particular.”
Culture: Do startups and investors have a “go-for-it”-attitude?
Mr. and Mrs. Swiss are especially known for their profound need for security. Security is always first and better let the “money under the pillow” instead of investing it and letting the money work for the economy.
“The European establishment has a deep-seated attitude problem when it comes to accepting the leaps of faith necessary for deep innovation to flourish.”
“A fear of the stigma of failure and a general lack of recognition of entrepreneurs leaves Europe behind in the hard-nosed business stakes.”
In my comparison of Switzerland to Israel we came across the same issue. One of Israel’s main thriving factor is their experimental mindset: “Failure is not a bad thing in Israel.” Switzerland needs to address this issue fast, but changing culture is slow. There is one great initiative by the ETH Entrepreneur Club, which is doing “FuckUp Nights“. At this event people are invited to publicly share their failed business stories. The events are usually massively overbooked, which is at least a small sign for a change in our culture.
Education: Is entrepreneurial culture encouraged from an early age?
Switzerland only just put the subject “Media and Informatics” on schools’ curriculum. According to the article, Sweden and Denmark are way ahead of the crowd with their “early encouragement of entrepreneurial culture”.
“Schools, including primary schools, and universities have put innovation and entrepreneurship on their curricula.”
Other interesting points highlighted in the article:
- Four examples of startups that have remained loyal to their home turf
- The European Commission is turning its attention to four key aspects of the problem:
- People — Better connections
- Finance — More venture capital
- Culture — Changing attitudes
- Regulatory compliance — Improved information
- Most governments are eager to attract innovative start-ups since they can be drivers for economic growth
Do you like these summaries of certain #longreads and their takeaways for the digital innovation in Switzerland? There is more to come! Stay tuned and sign up for our bi-weekly newsletter.