Analysis… Scale-up: the name of the game
EUROPE: The digital comeback of Europe is the goal of EIT Digital CEO Professor Willem Jonker, who detailed the creation of a new Silicon Valley hub and the importance of value creation.
EIT Digital (formerly known as EIT ICT Labs) is a pan-European education and research-based innovation organisation which aims to drive European leadership in digital innovation for economic growth and quality of life. The Knowledge and Innovation Community (KIC) began work in 2010, and through linking education, research and business, it empowers top talents for the future and brings digital innovations to life.
EIT Digital’s ecosystem is characterised by an open and collaborative way of working with partners representing global companies, leading research centres, and top-ranked universities in the field of ICT. EIT Digital is consistently mobilising talents, ideas, technologies, and investments, as well as business across Europe and beyond.
In May, PEN attended the INNOVEIT 2015 conference in Budapest, where EIT Digital’s chief executive, Professor Willem Jonker, set out the KIC’s responsibility for creating jobs, its new relationship with Silicon Valley, and encouraging a European entrepreneurial spirit.
Professor Dr Willem Jonker © Johanna Gavefalk
What have been the most significant developments over the last five years?
The first achievement was building the KIC infrastructure, where we consolidated our strategy, built the basic instruments and back office, consolidated the core co-location centres, and built the action line activities. We have also grown our partnership from around 50 partners when we started to around 130 partners today.
We have extended our geographic footprint in Europe, expanding from five to seven core nodes; established new operations in Madrid, Spain – because we felt we were lacking in this region – creating a link to South America, where there are a lot of emerging economies; and built a hub in Silicon Valley.
When it comes to education, we have built our schools and our blended education strategy. The master school is steadily growing and developing, with an intake of around 350 students at present; it is a very strong programme. The doctoral school saw some setbacks when we were uncertain about our strategy, but we have now rebalanced the strategy and it is on track again. We have two key foci: developing the professional school for professional education and developing the online platform together with the other KICs.
Finally, our innovation strategy is very important as it is vital to invest in innovations that are based on research results. Research feeds into technology, and it is very important to focus on those start-ups and those opportunities. We have innovation activities and we have built a business development infrastructure, a pan-European business development accelerator.
We have eight action lines, and in each of these areas we have so-called ‘innovation funnels’ where we bring together corporates, SMEs, start-ups and scale-ups in specific domains like smart energy, smart cities, security, clouds, network infrastructures, etc. for our start-up funnel because we measure our start-ups in terms of growth in investment deals, customers, turnover, valuation, and the number of employees. It is all about scaling up; we are really focused on the growth of these opportunities.
What are the greatest challenges facing Europe in the digital world, and how can ICT address these issues?
Our strategic innovation agenda is called ‘Blended Life’ – blending the ‘physical’ world and the ‘digital’ world. We are focusing on ‘cyber-physical systems’, sometimes called ‘embedded systems’, and that is an area where Europe is strong and where digitalisation provides new opportunities.
In ‘health and wellbeing’, for example, digitalisation will allow you to move from cure to prevention because you can do much more monitoring with sensor networks – there is enough powerful computing power to do Big Data analysis in order to prevent getting into hospital, rather than being cured in hospital.
Nowhere else on Earth is the quality of the health system so high and so equally accessible. The European health system is an asset that can be used as a basis for innovative healthcare solutions enabled by ICT. This allows more focus on prevention, thus offloading the financial burden of cure. Here there are enormous opportunities for Europe.
With digitalisation helping to reduce the number of people in work, to what extent is it the responsibility of EIT Digital to create jobs?
Technology has destroyed as well as created many jobs. A key driver should much more be to create economic value. There are many tasks in society and nowadays they are packaged in a fairly traditional job model. Technological innovation is not always aligned with this job model. This is why we need technical innovation to go hand in hand with social innovation. The nature of disruptive innovation is that it disrupts existing business models and as a result has social consequences. When these social consequences are not properly addressed, the result will be resistance against the innovation. A shift of focus from job creation to value creation will ease innovation under the condition that the created value in one way or another flows back into society.
What are the developments regarding EIT Digital in Silicon Valley?
There is no disputing that Silicon Valley is the innovation hotspot of the world. We need to be connected, and our hub in Silicon Valley is a connection. We are not going to build a co-location centre and copy what we are doing in Europe, but instead build a bridge.
By being connected, we can add value to our European ecosystem by learning from the achievements in Silicon Valley. This way we can have more critical mass and more experience through our partner network. At present, there unfortunately isn’t a good balance when it comes to exchange between Europe and the Valley in technology, human resources and capital, especially in the digital domain. We want to try to rebalance that by combining and joining forces. Through our strong partnership, as well as the support from our national governments and the European Commission, we are a recognised player in Silicon Valley.
Taking a concrete example, we were able to have a very collaborative project with Coursera in online education; this was mainly due to a KIC bringing together a high quality higher education group. It is very difficult for individual universities to represent themselves and it takes a lot of work and expertise. By combining forces, therefore, everybody benefits. For Coursera, it is great because they have a single entry into a landscape, and for us it is great because we benefit from their innovation when it comes to online education.
It is the same story for investment – very often, start-ups go to the United States because they assume it is easy to access capital there. We think there are also clever ways where start-ups that are born in Europe can also be scaled up in Europe and not necessarily have to move. We should find more clever ways to combine investments, for example a Silicon Valley investor with a European investor.
So instead of a ‘one way bridge to Silicon Valley’, there is also a ‘return lane’, and the success of that hub will be measured on the return stream that can be generated.
How can a more entrepreneurial and positive mindset be encouraged in Europe?
Europeans are not more risk averse than non-Europeans – it is very much to do with the circumstances. The entrepreneurial spirit in the past brought Europe into a leadership position, and whilst getting to the top is one thing, staying at the top requires continuous effort. And there Europe has to step up; in the digital domain in particular, Europe needs to make a comeback.
I am very optimistic about people in general, especially the energy that there is in Europeans, which is what we need to stimulate. We need to say, ‘that’s a good thing’, ‘you should do that’, ‘go for it and we will help you’, and ‘where can we help you?’ – this is mainly our role, rather than saying ‘why the hassle?’, ‘you won’t succeed’, ‘it’s too difficult’.
The way things are financed in the United States is maybe different compared to Europe, but it does not mean that we cannot do it with the different financial tools we have and get just as good successes. If you look at the critical mass, we are more distributed – Silicon Valley is very condensed; however, Google needs its customers worldwide, not only in the Valley. Therefore, it doesn’t matter so much where a scale-up is based; why could you not serve Europe as well as Silicon Valley?
It is important to have strong ICT companies in Europe. At global level we need to have a balance when it comes to digital innovation; a strong global imbalance with only one source of innovation in the long run is unsustainable. To rebalance the current situation, an additional effort here in Europe is needed.
How do you see EIT Digital developing in the next five years?
Geographically, there is a focus on consolidation, so no direct expansion. Sustainability is extremely high on the agenda – how to make sure that we have a diversified income.
Another focus is impact. We are starting to deliver our students and our growth numbers for scale-ups. However, impact is different from delivery – we have delivered our first 70 master school students, and within the next five years, it would be great to see that these people have entrepreneurial leadership positions, are either starting their own company or have been recognised by their environment as true engines of innovation; then they have impact.
Building a strong brand based on quality, sustainability via monetisation of our infrastructure, services and results, and achieving global impact – that is our agenda for the coming years.
Professor Willem Jonker
European Institute of Innovation and Technology
This article first appeared in the seventh edition of Horizon 2020 Projects: Portal, which is now available .
