17 December, 2014
A Tale Of Two Cities: Why Europe Is Struggling To Compete In The Big Data Market
There’s a pervasive belief in the tech world that Europe is a year behind New York and two years behind Silicon Valley when it comes to technological innovation. While there is still an undeniable lag, European tech companies are seeking to bridge the gap.
Last month the European Digital Forum hosted the High-Level Roundtable on Europe’s Digital Future. The event gathered some of the world’s leading thinkers to explore the continent’s burgeoning field of data-driven businesses. Participants at the roundtable sought to answer the question on everyone’s mind: Why is Europe so behind the times?
Here are the three major reasons Europe’s big data market is struggling to compete on a global stage:
- Lack of talent
Most of the world’s leading big data programs are housed at American universities and colleges. European schools are slowly developing more data analytics programs, but there will likely be a shortage of talent in Europe’s tech industry for several years.
To streamline the development of big data programs, some policymakers have suggested teaching children how to program at a young age. For instance, a new curriculum in Estonia requires toddlers to take basic programming lessons every week.
- Limited access to public data
Another major hurdle European developers face is government regulations on access to data. Public data sets are crucial to the continued success of data-driven startups in Europe.
Many governments in Europe do not allow public access to their information. Open data policies, however, could help drive revenue, cut costs, improve efficiency and create jobs for future generations. When governments relax regulations surrounding big data, it gives startups the opportunity to solve problems that the government couldn’t tackle.
European governing institutions are starting to take notice. The European Union has issued directives encouraging EU Member States to pass legislation aimed at allowing Europeans to reuse open public information.
Neelie Kroes, Vice President of the European Commission responsible for the Digital Agenda, gave a speech in July 2014 in favor of greater transparency.
“Information can long sit in dusty drawers but it only gains value when opened up,” she remarked. “That is the promise of the internet. It is an amazing accelerator for innovation. But you only get the benefits if you are open.”
European countries are slowly beginning to open their data portals but there is still a long way to go.
- Lack of funding
European startups often struggle to receive funding from investors, largely because the finance culture in Europe is so different from the investment culture in the US. Investors tend to be more risk-averse in Europe than they are in the US.
Those European startups that do receive funding typically get it from American investors and end up moving across the pond to the states. The resulting “brain drain” is a huge loss for Europe in terms of economic development and job growth.
In order for the big data market in Europe to thrive, venture capital firms need to be more willing to invest in young, promising startups.
Europe has all the ingredients needed to be a leader in the big data industry. As attitudes towards open data policies change and investors become less risk-averse, I predict that we’ll see a lot more innovative startups emerge from Europe.