How Europe’s green tech ‘scale-ups’ can help tackle climate change

_von der Leyen

Ursula von der Leyen, President of the European Commission. Co-operators:
Photographer: Etienne Ansotte
European Union, 2020
Source: EC – Audiovisual Service

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Johnny Wood, Senior Writer, Formative Content


  • The pandemic has disrupted the growing momentum of Europe’s tech innovators in tackling climate change.
  • Europe lags behind the United States in getting green innovations to scale.
  • Emissions-busting technologies are key to achieving ambitious climate targets.
  • We must remove barriers to finance to maximize sustainable technologies.

The seeds of innovation have long flourished in Europe and its start-ups were set to enjoy unprecedented growth, supported by plentiful seed funding and a political backdrop that prioritized both a digital and green agenda. Then came coronavirus.

Innovators seeking investment in their “scale-ups” – start-ups seeing accelerated growth after demonstrating a product-market fit – which often require complex and long-term investment were suddenly faced with new challenges.

The current uncertainty has left Europe’s economy facing difficult times, and this is particularly true for start-ups. But while the previous funding glut may have dried up, at least in part, the continent’s strong innovation ecosystem is ready for the recovery.

 

A new World Economic Forum report, Bridging the Gap in European Scale-up Funding, explores the challenges facing technology innovators seeking to regain lost momentum.

Stalled momentum

Europe’s start-ups generated around 2 million new jobs in 2019, more than any other sector, according to European Commission-backed platform EuropeanStartups.co, and new tech sector positions increased by 10% each year to the end of the first quarter of 2020.

The Forum report looks at how recovery from the crisis can realign governments, start-up founders and investors to develop innovations that address climate change and digitalization.

Europe has strong fundamentals for innovation, growth and economic prosperity, ranging from a strong education sector to firm regulatory systems. Forward-thinking policies like the Green New Deal aim to decarbonize the continent’s economy by 2050, for example, and the European Commission’s Sustainable Finance Action Plan looks set to transform the region’s financial sector.

Six objectives of the EU
Six objectives of the European Union.
Image: World Economic Forum Bridging the Gap in European Scale-up Funding

Climate scale-ups, and green-tech companies specifically, are a vital part of achieving Europe’s green transition. These companies contribute sustainable products, services or programmes across a range of sectors, including power generation, raw materials, transport, agriculture and pharmaceuticals, among others, helping to meet the European Commission’s six environmental objectives, shown in the diagram above.

Mind the gap

Yet Europe’s start-ups lag behind their US counterparts in their ability to scale up, especially with new technologies needed to realize the continent’s ambitious climate goals. US investment in start-ups remains 3.4 times greater than in Europe, with a quarter of companies reaching scale, compared to just one in eight European companies reaching scale, the report shows.

Since 2015, the US has seen 2.8 times more billion-dollar tech IPOs than in Europe, partly due to the liquidity offered by US stock markets, the abundance of US venture capitalists and the high investment appetite of asset-rich US pension funds.

What’s the World Economic Forum doing about climate change?

Climate change poses an urgent threat demanding decisive action. Communities around the world are already experiencing increased climate impacts, from droughts to floods to rising seas. The World Economic Forum’s Global Risks Report continues to rank these environmental threats at the top of the list.

To limit global temperature rise to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policy-makers, and civil society advance comprehensive near- and long-term climate actions in line with the goals of the Paris Agreement on climate change.

The World Economic Forum’s Climate Initiative supports the scaling and acceleration of global climate action through public and private-sector collaboration. The Initiative works across several workstreams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions to transitioning to a low-carbon, climate-resilient economy. CEOs use their position and influence with policy-makers and corporate partners to accelerate the transition and realize the economic benefits of delivering a safer climate.

Contact us to get involved.

Here are 4 key areas in which investors, entrepreneurs and policy-makers need to come together to help close the investment gap for tech scale-ups.

1. Streamlining access to public funding for innovative start-ups

While public money offers a way for governments to attract top entrepreneurial talent, securing public funding can involve start-up owners navigating a minefield of bureaucracy and different national requirements. Obtaining public funding must be made more efficient and accessible to entrepreneurs.

2. Applying blended finance models

Developing cutting-edge technology often involves lengthy research and development commitments, both in time and capital expenditure, which require long-term funding. Europe’s venture capital funds may not be prepared to finance long development phases, so a blended approach is needed which combines both public and private funding.

3. Making it easier for new companies to partake in public-private procurement

Young companies often have difficulty competing with established corporations to sell new products and services, especially during uncertain economic times. Integrating new products into COVID-19 support packages, for example, can increase procurement opportunities for both private and public buyers, and promote closer collaboration between start-up companies in the support package.

4. Improving the voice of European growth companies in policy-making and standardization

European tech scale-ups need closer involvement in shaping the political and regulatory framework that will impact their growth and direction. Investing in industry associations can help companies treading a similar path to collaborate and help policy-makers to understand new concepts and realize their potential.

Eliminating the funding challenges facing the next generation of innovators will help foster an environment where sustainable technologies can scale up and prosper, which is vital to meet the continent’s drive to decarbonize by 2050.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

The AI doctor won’t see you now

Refugees in Greece: MEPs demand solidarity, warn about impact of health crisis

Righting a wrong: UN Fund helps thousands of sex abuse survivors rebuild their lives

Data is the fuel of mobility. Don’t spill it for nothing

First EU collective redress mechanism to protect consumers

Study: Trade supports over 36 million jobs across the EU

World Food Day: here’s what the UN is doing to fix ‘intolerable’ wrong of hunger

Most people on the internet live in this country

1 in 7 people would choose not to fly because of climate change

Schaeuble wants IMF out and bailouts ‘a la carte’ with Germany only to gain

Brexit: European Commission publishes Communication on preparing for the UK’s withdrawal from the EU

The ECB must extend its money stimulus beyond 2018: Draghi reckoning

Logo Mania: A call to action to our crisis of connection

MWC 2016 LIVE: Qualcomm looks to pick up Hamilton’s winning ways

Berlin ‘orders’ the EU Parliament to compromise

Is it too soon to hope for a tobacco free Romania?

Trying to cure bank cancer with analgesics

UN sees progress in fight against tobacco, warns more action needed to help people quit deadly product

Our present and future tax payments usurped by banks

Gender equality: an issue much talked about but less acted upon

Health spending set to outpace GDP growth to 2030

Commission makes it easier for citizens to access health data securely across borders

How Britain’s backyard bird feeders are shaping evolution

Worldwide UN family celebrates enduring universal values of human rights

Can Eurozone’s uncertain growth answer the challenges that lie ahead?

Why the most important tool in healthcare is trust

Is the ECB ready to flood Eurozone with freshly printed money?

Is continuous sanctioning the way to resolve the Ukrainian crisis?

State aid: Commission approves €1.2 billion French “Fonds de solidarité” scheme for small enterprises in temporary financial difficulties due to coronavirus outbreak

EUREKA @ European Business Summit 2014: Innovation across borders – mobilising national R&D funds for transnational innovation in Europe

Violence will not deter Somali people in their pursuit of peace, says UN chief, in wake of lethal attacks

Thursday’s Daily Brief: Climate crisis and food risks, fresh violence threat for millions of Syrians, calls for calm in Kashmir

Foreign investment to be screened to protect EU countries’ strategic interests

This is what Belgium’s traffic-choked capital is doing about emissions

How COVID-19 could open the door for driverless deliveries

First do no harm. Why healthcare needs to change

Can green bonds help us manage climate risk?

The world wide web is 30. Here are 8 things you should know about it

These are the countries where most adults still don’t have a smartphone

Peer-to-peer learning: a way to develop medical students’ trainings

The eyes of Brazil and the world turn to the largest rainforest and largest biodiversity reserve on Earth #PrayForAmazonia.

3 ways governments and carmakers can keep up with the future of transport

What we can learn from Asia’s courts of the future

Iraq: Education access still a challenge in former ISIL-controlled areas

The impact of refugees on the European healthcare system

Parliament votes reform for better European Co2 market but critics want it sooner than later

The European Union and the United States reach an agreement on imports of hormone-free beef

#TakeYourSeat at the UN Climate Change Conference: a way for all people to join the global conversation

Bullheaded Madrid authorities confront Catalonia with force

Draghi to lay his print on long term ECB policies prior to exiting next year

Why will Paris upcoming “loose” climate change agreement work better than the previous ones?

Is Data Privacy really safe seen through Commissioner’s PRISM?

Marking Sir Brian Urquhart’s 100th birthday, UN honours life-long servant of ‘we the peoples’

Tsipras doesn’t seem to have learned his “almost Grexit” lesson and Greece faces again financial and political dead end

How India is harnessing technology to lead the Fourth Industrial Revolution

Here’s why the world’s recovery from COVID-19 could be doughnut shaped

4 bold new ways New York is going clean and green

Tusk fights back while charismatic Boris goes against everybody in Brussels pushing the UK to leave the EU now or never

From a refugee camp to Davos: one Co-Chair’s story

Ongoing insecurity in Darfur, despite ‘remarkable developments’ in Sudan: UN peacekeeping chief

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s