March 30, 2021

Tech companies call on EU to set up a €100 billion sovereign tech fund

Tech companies call on EU to set up a €100 billion sovereign tech fund

The leaders of around 35 unicorns and tech startups are to call for a European Sovereign Tech Fund to be set up at an online meeting with the EU’s Research and Innovation Commissioner Mariya Gabriel on Tuesday, reports Bloomberg.

It is hoped such a fund, combining public and private money in the form of long-term equity investments, would kick-start the creation of regional champions in green technology, science-driven startups, and other new industries.

The fund would also hopefully prevent the need for homegrown startups to rely on the US when trying to expand. The tech leaders say the sheer scale of the world’s biggest tech companies means it is easy for them to buy out potential disruptors, tighten their grip on industries, and dominate the digital agenda, presenting a risk to growth, jobs, and Europe’s influence in key strategic areas.

The Covid-19 pandemic limited previous attempts by the EU to create a pan-European sovereign wealth fund for investing in strategic industries. However, the EU’s focus is now on finding homegrown opportunities to reduce Europe’s dependence on US and Asian technology.

As such, the bloc has started to make equity investments via a €3 billion venture capital fund for early-stage startups that use cutting-edge science and engineering. It is also preparing to develop and manufacture the world’s most advanced semiconductors by 2030.

“The tech founders want the bloc to push through measures that support a transition to a greener economy and take the lead on digital innovation in health, education, and more experimental technologies. They also want more help to turn the region’s tech startups into global tech giants,” reports Bloomberg.

“In the future, jobs will be created by those bold enough to transform new ideas and knowledge into innovations,” says David B. Audretsch

Writing about knowledge spillovers and future jobs for IZA World of Labor, Audretsch highlights two policy strategies that he says can harness the opportunities created by globalization: “One is to invest in generating ideas and knowledge through R&D, academic research, education, and creativity. The second is to facilitate the spillover of knowledge created through those investments from academia to enterprise, focusing on incentives to promote entrepreneurial startups, technology transfer from universities, and public–private partnerships linking university research to the private sector.”

Audretsch proposes “entrepreneurs will play a vital role in creating the jobs of the future by transforming ideas and knowledge into new products and services, which will be the competitive advantage of the advanced economies.”

Read David B. Audretsch's "Knowledge spillovers and future jobs" in full.