The European startup ecosystem’s decades-long innovation push has already produced widely known brands like Adyen, Klarna, Skype, Spotify, Supercell, Wise, Wolt, and Zalando. And thanks to a strong commitment to the green transition, common legislation, and easy movement of talent – as well as the tight link between startups and the research ecosystem – Europe has become home to promising deep tech upstarts. These companies are laying the foundations for new industries like quantum computing, new materials, and clean energy – and most importantly, these companies are purpose-driven.
That’s why I dare say that despite the challenging times, European tech has never been stronger than it is today. Or more so, it’s never been stronger in technologies that truly matter. Because even though companies and people now face turbulent times, Europe is paving the way for purpose-driven startups: according to the State of European Tech, in 2022 half of all global investments into early-stage purpose-driven companies went to Europe, while only 23% of total global investments were done in Europe. And according to the latest stats from their H1/2023 report, climate, and purpose tech were the third largest categories to attract investments in Europe.
Because Europe has focused on building some of the most promising deep techs that tackle fundamental challenges, Europe will strengthen its position in these three industries over the next decade:
Quantum tech
Quantum computing has gained a lot of attention as the breakthrough technology that’s been called out to ultimately change the field of computer science and have an impact on virtually every industry. McKinsey has estimated that quantum computing has the potential to capture nearly $700 billion in value as early as 2035.
Quantum computing is predicted to take major strides in advancing several fields like medicine, cryptography, and deep learning, thanks to its ability to deal with increasingly more complex problems and process inconceivable volumes of data at the speed of light. It’s even claimed that its processing power could trigger the development of breakthroughs in carbon capture, new fuels, batteries, and fertilizers, to name a few, tackling wider global challenges like climate change and food security.
Simultaneously, there are more threatening motivations for the race to quantum supremacy. Quantum technology could be built to breach encryption protocols, produce weapons, and pose a threat to national cybersecurity. So it really is no wonder that there’s constant speculation about whether China or the US gets there first, and China is already leading the race in quantum networking.
But the world shouldn’t put Europe on the sidelines when it comes to quantum computing: we’re actually perfectly positioned to lead the quantum computing revolution. In Europe, one of the most powerful quantum hubs and talent hubs for quantum professionals is being built, while the US and China continue to spend resources battling each other for who manages to come out on top in the race for quantum superiority.
Meanwhile, Europe has been supporting the growth of the ecosystem through research activities like the EU’s Quantum Flagship program. Currently, our quantum computing ecosystem is extremely strong with companies like IQM, Bluefors, Pasqal, Oxford Quantum Circuits, Quantum Motion, and Alpine Quantum Technologies.
While it’s obvious Europe won’t be the first to get its hands on US or Chinese technology, the region is large enough to develop its own competence and computing power. Europe should not and cannot wait around for US or Chinese tech.
Food tech
As the world’s largest agri-food exporter – in terms of revenue – Europe has a long history of feeding the world and is known for large food-producing countries like France, Germany, Italy, and Spain. The food and drink industry employs 4.5 million people in the EU alone and generates a whopping €1.1 trillion turnover.
There’s been a shift in the region to change what we eat and how it’s made – rightly so, considering the paradox of feeding a growing population without consuming all of the world’s resources. According to UN reporting, more than a third of greenhouse emissions caused by humans are linked to food – and food demand is expected to increase by 50% by 2050. Moreover, fluctuations in food prices and threats to food security triggered by Russia’s invasion of Ukraine have amplified Europe’s need for self-sufficiency and food security.
Europe is hungry for more sustainable and scalable ways to grow, process, package, and distribute food – and now is the time to build European players who’ll take on the challenge to make future food more responsible. The commitment is already lining up. In 2022, European food tech startups raised $6.3 billion, a 30% jump in funding compared to the 5% increase for agritech, with the UK, Germany, France, and the Netherlands drawing the most VC funding. In other words, the transition from traditional agro-driven to tech-driven food production is already underway.
But who’s cooking up what? The alternative protein industry is drawing significant interest and efforts with startups working on meat, dairy, and fish alternatives. There’s also work ongoing to find new carbohydrate sources, utilize food side streams, and develop more efficient processes.
A plethora of technologies and scientific methods are joining forces from cellular agriculture and precision fermentation to insect farming and plant-based proteins with companies like Onego Bio, Volare, Revyve, Eden Bio, Heura Food, Ynsect, Planted, Meatable, and more building in the area. They only make up a small part of the solutions needed to future-proof the industry – and Europe has a chance to take the lead in sustainable food development. Therefore, we must urgently and boldly step up to the plate and, quite literally, put our money, research and development, and ambition where our mouth is.
Energy tech
No one can deny the crucial and topical role of energy in today’s business environment or its influence on individual households. Even though the demand for energy technologies has accelerated over the past two years, Europe’s commitment to clean energy has secured its leadership position in the energy transition. The EU is striving for global leadership in renewable energy, and it’s committed to an aggressive target to have at least 32% of all energy in the region come from renewables by 2030. Russia’s invasion of Ukraine has only accelerated the region’s speed and political will in the transition to clean energy. In 2022, significant strides were made, as for the first time ever, solar and wind power (22%) passed natural gas (20%) in electricity generation.
Simultaneously, Europe has been able to increase the capacity and targets of clean energy production, while the US is still lagging behind. For example, Europe’s solar capacity has doubled since 2018 and is likely to triple over the next four years, and this April, a group of Western European countries has committed to increasing their wind energy production capacity remarkably.
And not to forget, Europe’s power grid is actually one of the largest regional interconnected power grids in the world and allows a multinational grid operation. In an attempt to encourage EU countries to further connect their electricity production capacities with each other, the EU has set a goal to be interconnected by at least 15% by 2030.
In addition to the work done in the political field together with industry-leading companies, we have a long list of startups that are building new solutions in the energy field, such as Northvolt, Green Hydrogen Systems, Tibber, Fusebox, and Tado°. Altogether, Europe is having a great run but now we need to invest even more into technology that supports cutting greenhouse gas emissions to as close to zero as possible in the energy value chain. McKinsey lists examples of these technologies in their report: advanced, intelligent electric grid systems that have the potential to produce real-time control of the grid, stationary storage systems forecasted to adopt renewables, and hydrogen-based fuels that could drive down production costs. And the list goes on.
So if Europe keeps investing in research, open collaboration, and green transition, the future of European tech is bright, to say the least.
