Europe’s to-do list for 2020

Collaboration, late-stage growth capital, and new incentive structures could be the answer to Europe’s lagging competitiveness

Europe needs a radical rethink if it wants to stay competitive in the coming years. Right now we still have powerful assets, 2000 hidden champions and the best research institutes in the world, yet in terms of the global economy, we are falling behind.

As we move rapidly into the age of digital, everything is changing. But, some people are less willing to accept that change is necessary. That’s understandable. It’s a matter of mindset. It’s not only about understanding the opportunity but about realizing the urgency to take action. We have had enough wake-up calls recently like the catastrophic forest fires in Australia, and extreme weather events are sadly becoming the new normal.

The survival of the planet will depend on business leaders changing old mindsets and behaviours. People always ask me what the Fightback movement is actually fighting against. In boxing, a fightback is a great effort to gain a position of strength when you are on the back foot.

As the digital era unfolds, many of us are in that position: Digitization poses the biggest threat to business as usual that our generation has ever seen.

We all share the responsibility. This is a wake-up call to act and take command. The Fightback movement is about bringing people together to contribute to solving two of the world’s most pressing challenges: the global transition to clean energy & providing world-class healthcare for all.

1. Harness new models for innovation

In 2020, I would like to see new models for cooperation. Tech entrepreneurs and established corporations present an untapped area of mutual benefit that is completely underutilised at the moment. On one side you have tech entrepreneurs who know how to build a digital business from the ground up and on the other side, you have large corporations with invaluable assets (customer relationships, market access) that are locked in highly regulated or structured organisations.

As outlined in FightBack the book, there are new innovative models for collaboration, where both sides can benefit. If we can think strategically about creating safe havens — with appropriate incentive structures — to encourage more interactions between both parties we can stimulate innovation.

I firmly believe that co-creations (digital ventures built outside of the core business) will become more popular as large companies try to remould their business for the digital age and take a hybrid business model/portfolio approach. Many of the most pressing problems that we now face from climate change to providing world-class healthcare to all, can’t be tackled by individuals or by government alone. However, there is a huge opportunity if different stakeholders can work together from industry, government, VCs etc.

As we approach Davos 2020 next week, one central theme of the event will be stakeholder capitalism. We should seize this moment to ensure that stakeholder-based business models become the new normal.

2. Europe is desperate for late-stage capital

Part of the problem here in Europe is that there are funds at the early stage, yet still a lot of underfunding at the later stages, consequently founders who want to go for the really big valuations/exits are faced with looking to the States for growth capital. The value destroyed for the European tech industry is incalculable. This urgently needs to change.

Just look at the difference in unicorns created in 2019.

What is happening is late-stage money is helping European consumer activity digitalise, relying on an accessible base of 700m consumers. As e-commerce reaches 20% of all retail, and with Europe boasting sophisticated payments and logistics, it’s easy to back the next online business selling offline goods more cheaply (Zalando, Deliveroo etc) or in a tech-enhanced way. However, this is not tech investing, which means backing already large IP-based businesses to accelerate international growth, or expand product offerings.

There is a ‘chicken and egg’ situation at play in Europe as the tech industry is very young — there are few local IPO exit options, and the elusive combination of world-class talent and technology know-how (the secret sauce behind all current tech giants, from Apple to HP) is harder to assemble in Europe. As a result, the potential to create $1B+ public ‘real tech’ companies in Europe is more challenging, structurally.

Quick fixes:

• Proactively encourage the creation of European late-stage funds
• Enable tax-advantaged financing for Series C real tech companies

3. New incentive structures for CEOs

It is time to change the way we use incentive structures within large corporations. Outside of the private sector, there is a growing consensus that we need to rethink current approaches to doing business. In Davos next week, at the World Economic Forum 2020, for example, a headline topic will be ‘Stakeholders for a Cohesive and Sustainable World.’ Among the key issues addressed will be questions such as: How to help businesses create the models, essential, to remain competitive as the Fourth Industrial Revolution unfolds, in a world driven by exponential technological change, as well as increasing expectations from stakeholders, on all sides.

I will also be speaking at a panel discussion at Davos: Securing a Competitive Future: Platform your business to thrive in a digital world by Mirakl in Partnership with Tetra Pak and the Fightback movement.

Grab a ticket here:

4. Can tech talent save Europe?

The ability of a company/city/country to innovate is largely dependent on the talent at its disposal. For growth in a society, entrepreneurship and innovation are key. We must make sure that we attract and retain and educate future leaders. The entrepreneurial mindset is something I talk a lot about because I firmly believe that training people to think like an entrepreneur is exactly what we need to stimulate growth in our businesses and in the economy.

Furthermore, only one in 20 start-ups have a female founder. That is a disappointing statistic that shows that we are wasting a lot of potential and opportunities for growth. More needs to be done to attract female leaders into tech and ensure that the ecosystem supports and promotes future female tech talent. A big part of this retention will be ongoing learning and development put in place for all employees to stay au fait with recent developments and technical know-how.

5. We all share the responsibility

Europe can lead the way to climate neutrality by investing in technological solutions, empowering citizens, and aligning action in key areas such as industrial policy, finance, or research — while ensuring social fairness for a just transition. I would like to see more collaboration between European governments who can set aside stimulus funds for high-potential businesses in cleantech to accelerate the transition to clean energy and to improve healthcare for all by using new tech. Startups can’t do it alone, large companies can’t do it without entrepreneurs, and entrepreneurs can’t do without growth capital — it’s all interconnected.

Let’s hope 2020 can be Europe’s year to pave a new path to growth through new business models! I also hope that FightBack the book will be a valuable blueprint for corporations seeking new more sustainable ways of doing business, as we enter an era of great technological and societal change. In the book, we introduce the Entrepreneurial Co-Creation (ECC) model with best practices and methodologies for corporations to be effective in the new economy and cooperative frameworks will be the backbone of this.

FightBack is available to pre-order to Amazon: https://amzn.to/374xEft

Don’t forget to join the Fightback movement: joinfightback.com