european tech gets political

European Tech Investment and the Rise of Lobbying

The latest annual State of European Tech report from venture capital firm Atomico indicates a positive trend in investment levels. However, this year’s report extends beyond a typical ecosystem evaluation, functioning as an advocacy document that reflects a significant change: increased lobbying efforts by European startups and investors.

Advocacy and Policy Recommendations

According to Tom Wehmeier, partner at Atomico and head of intelligence, simply demonstrating progress is insufficient. It’s now crucial to leverage insights to guide future development.

The report outlines four key policy recommendations – Fix the friction, Fund the future, Empower talent, and Champion risk – designed to propel the European tech sector forward.

Atomico’s Authority and Portfolio

Founded in 2006 by Skype co-founder Niklas Zennström, Atomico possesses considerable standing to advocate for these changes. Its investment portfolio boasts prominent European companies including Aiven, DeepL, Klarna, Pipedrive, Stripe, and Supercell.

European tech firms, mirroring strategies employed by Big Tech, established industries, and their U.S. counterparts, are increasingly engaging in lobbying activities – both at the corporate level through public affairs professionals, and collectively via impactful open letters that have garnered attention from European institutions.

Alignment with Existing Policy Discussions

This shift explains the alignment of Atomico’s recommendations with ongoing discussions within both the startup community and Brussels policy circles. This includes support for the 28th regime proposed by EU-INC, aiming to establish a unified pan-European company structure, as well as calls for reduced regulation and broader competitiveness considerations.

High-Level Endorsement and Sophistication

The report’s influence is underscored by a quote from European Commission President Ursula von der Leyen, expressing her desire for Europe to lead in the development of AI. This high-level engagement is driving increased sophistication in European tech lobbying efforts.

The Importance of Regulatory Frameworks

Regarding the 28th regime, Atomico emphasizes the critical distinction between a “regulation” and a “directive.” A regulation, being directly binding across all member states, possesses greater enforceability than a directive, which allows for varying national implementations.

Collaboration and Dissemination of Information

Detailed analyses, such as the “non-paper” published by France Digitale on the 28th regime, are becoming commonplace, mirroring the output of organizations like ESNA. Atomico’s perspective, presented through video and a presentation at the Slush tech conference, is strategically designed to reach both the tech community and policymakers.

Potential Challenges and Public Perception

A potential oversight is the lack of acknowledgement of opposing forces to initiatives like EU-INC. Furthermore, some recommendations may appear disconnected from the concerns of the average European citizen, as the pursuit of trillion-dollar companies isn’t a widespread priority.

Addressing Distrust and Building Support

However, it’s argued that broader societal benefits are linked to economic growth. Alexandru Voica, head of corporate affairs and policy at Synthesia, suggests that increased communication is vital to overcome existing distrust of the tech industry in Europe.

Voica notes that communications are now focused on risk mitigation and reputation management, rather than solely on marketing and product growth.

Risks and a Critical Crossroads

European tech’s lobbying efforts aren’t without risk; alignment with specific political parties could provoke backlash and diminish overall support. Nevertheless, many will concur with Atomico’s central assertion: “Europe effectively stands at a crossroads.”