Euro Tech Optimism from VivaTech
Macron, Considerations for Corporates and the Ecosystem
Optimism and excitement. Those would be the adjectives I would use to describe the vibe at VivaTech Conference in Paris last week. With the presence of Europe’s newest political promise, Emmanuel Macron, and his hugely reported declaration ‘’I want France to attract new entrepreneurs, new researchers, and be the nation for innovation and start-ups’’ it really feels like the continent is ready to take a leap-forward in the international innovation game. But although political will is key — and some of us libertarians were reminded by top VCs that Silicon Valley was actually kick-started with public investment — what is even more important is the presence and push coming from private enterprises.
The presence of top legacy French corporations such as Sanofi, Carrefour, Accor, BNP Paribas, LVMH, Orange and even La Poste in a tech Conference alongside Google, Alibaba or Stripe, as well as dozens of exciting and promising start-ups, points at a crucial realisation of the competitive weight that innovation has and will continue to have in the 21st Century.
But although the will is there and solid initiatives have been started by these and many other companies across the continent, challenges still lay ahead.
- The well known Innovator’s Dilemma: the success of decades old legacy corporations can be largely attributed to their excellence in processes. But as every student of innovation understands, that is exactly what makes an established corporation suffer in the face of acute change (see our article Becoming Goliaths). This could look just like the famous story of the ice makers told that Guy Kawasaki tells, where the ice harvesters got excited that they could use steam machines to transport ice faster and cheaper into the city… until someone used the steam machine to create an ice factory closer to its customers. The risk for the core of Europe’s economy, its internationally recognised corporations, will be to fall into the trap of the ice harvesters: integrating new technology into their current processes instead of defining the new game-changing models that it could enable.
- The need for corporate innovation quick wins: I personally believe that there is a huge risk that the excitement will wither away if there are no quick wins delivering results; or if there is some crisis that will need to slash down corporate budgets. The problem here comes with the speed and agility with which incumbents can move, the focus on results and, last but not least, the capacity to quantify ROI (in the shape of revenues, equity, indirect revenues, efficiency, capabilities or brand equity, more on that in a future piece). Only if these three challenges can be overcome will the excitement maintain momentum. If not, the continent risks loosing momentum which, in the long term, would leave its companies and consequentially society more exposed to disruptive waves initiated from the outside.
- The need for startup success stories: On Stage 6, Friday afternoon there was the VC Summit and a common issue raised by VCs was the difficulty, almost impossibility, of raising big rounds of capital in Europe (Series B, C…). That is not so because there is a lack of capital but because capital is not excited enough… or at least it is not confident enough. Europe does have good startup success stories such as BlaBlaCar, Shazam, Just Eat, Skype… but the number of serious success stories — in both absolute and perceptual terms — is not yet high enough. It could be argued that it is a chicken and egg problem: if there was more capital there would be more success stories, but if there are no success stories capital won’t pour in. This leads to a last thought: even in one of libertarianism’s hotbeds, Silicon Valley, public funding had a role in kickstarting the ecosystem (NAS, Moffet Field, DARPA…). Now, although we can not rely on political will and funding to step up the continent’s innovation game, having a President tweeting ‘’To put it in one word: ‘’entrepreneur is the new France’’. #VivaTech’’ should certainly help. But to make that happen we need to ensure that regulation won’t lead to Thiel’s famous quote ‘’we were promised fling cars and instead what we got was 140 characters’’ and also, each of us, individually, make it our responsibility to deliver the results.
Now let’s get back to work.