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Key Findings

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Investors

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Purpose

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Policy

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Appendix

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Tech's Take on Policy

We need clearer objectives to successfully regulate the European tech ecosystem.

We need clearer objectives to successfully regulate the European tech ecosystem. Are we trying to create sustainable employment and solve major societal challenges like health and the environment? Or is our chief objective to focus our resources on policing companies from other regions? These goals are not necessarily mutually exclusive. Major technology firms undoubtedly need sustained scrutiny. Still, the political world needs to define a European approach, which balances our ambitions for robust tech regulation with an understanding of what's needed for our companies to scale.

Linda Griffin

King

VP, Global Public Policy

We used the survey to explore what matters most to more than 1,200 European tech founders when it comes to potential policy support. The priorities they shared focused mostly on policy to create the conditions that make it more appealing for companies to attract, retain and replace talent. Founder respondents cited the introduction of simplified employee regulations across Europe as the number one regulatory change that would have a materially positive impact on the prospects of their business. For founders of companies who have raised external capital, this is followed by better taxation of employee stock options. The harmonisation of tech-related regulation across Europe also scores highly for founders of both bootstrapped and externally funded companies.

What is one regulatory change that would have a materially positive impact on the prospects of your business?

Source:

Legend

  • Raised external capital
  • Bootstrapped
Note:
Founder respondents only. Numbers may not add to 100 due to rounding.

At present, there are too many instances of governments trying to apply existing legislation - legislation that was drafted in a pre-digital age to respond to the needs of a different type of work and a different type of worker - to startups and new technologies.

I think the approach in Europe differs from country to country. In countries like the UK, France and Portugal, while still recognising a need to regulate certain aspects of the tech community, there's greater openness to disruptive innovation. Whereas in Spain there's a distinct lack of trust at the government level. However, what we need is a new regulatory framework that focusses on the digital economy. I find it hard to believe there are some countries in Europe that fail to see the potential of the digital revolution and the long-term socio-economic benefits that come with it. At present, there are too many instances of governments trying to apply existing legislation - legislation that was drafted in a pre-digital age to respond to the needs of a different type of work and a different type of worker - to startups and new technologies. The digital age has brought about a sea change in the global economy - changing the ways in which we live, communicate, work and consume - and we need regulatory modernisation to really reflect those changes. Otherwise, we run the risk of slamming the brakes on the digital economy. Today, we see millions of people around the world signing up for platform jobs, and yet there's still no clear regulation that balances their requirement for flexibility and their need for increased social benefits. If we're going to move forward, then this cannot continue.

Oscar Pierre

Glovo

Co-founder & CEO

There are clear differences in what matters most to founders of funded companies of different scales. Interestingly, the importance of better taxation of stock options is much more likely to be cited by companies that have gained significant scale (i.e. more than 100 employees), while they are far less likely to be concerned about changes to improve the harmonisation of tech regulation across Europe or more favourable capital gains taxation.

What is one regulatory change that would have a materially positive impact on the prospects of your business?

Source:

Legend

  • Simplified employment regulations
  • Better taxation of employee stock options
  • More favorable capital gains taxation across Europe
  • More harmonised technology regulation across Europe
  • Other
Note:
Founder respondents of companies who have raised external capital only. Numbers may not add to 100 due to rounding.

We also asked the European tech community to share their view on who is most impacted by the regulatory burden in Europe today. Whether they are empirically right or wrong, the perception of respondents from most occupation groups, including European tech founders and investors, is that the burden is being carried by the region's tech startups.

Who do you think is most impacted by the regulatory burden amongst the following?

Source:

Legend

  • Tech startups
  • Established private tech companies
  • Established public tech companies
  • Non-tech SMEs
  • No difference
Note:
Numbers may not add to 100 due to rounding.

This perception may be impacted by the fact that the general level of awareness of the key priorities of the European Commission in the tech and digital sphere appears to be low. When asked to determine which of the Commission's priorities was most important, the most frequently cited answer was 'I don't feel sufficiently informed to comment'. Interestingly, very few respondents believe that delivering a connected, single digital market was the key priority for the European Commission.

What do you think have been the key tech and digital economic priorities for the European Commission in the last 12 months?

Source:

Legend

  • I don't feel sufficiently informed to comment
  • Policing a handful of major platform companies/Big Tech
  • Supporting the growth of the European Tech ecosystem
  • Delivering a connected Digital Single Market
  • Other
Note:
Numbers may not add to 100 due to rounding.

It's also telling that just one in five European founders believes that the concerns and perspectives of the region's startups and scale-ups are being heard by European policymakers. We also see that half of all founders perceive that European regulation makes it harder to start and scale technology businesses. The European tech community also shared a strong call to benefit more from 'preferential treatment' for European tech companies.

Do you agree or disagree with the following statements?

Source:

Legend

  • Agree
  • Disagree
  • Neither agree nor disagree
Note:
Founders only. Numbers may not add to 100 due to rounding.

On the final point of preferential treatment, it's fascinating that there's a high level of agreement across the board from the European tech community, including amongst European policymakers, that European startups should benefit from preferential treatment from the region's policymakers.

To what extent do you agree or disagree with the following statement: European startups should benefit from preferential treatment from European policymakers

Source:

Legend

  • Agree
  • Disagree
  • Neither agree nor disagree
Note:
Numbers may not add to 100 due to rounding.

One of the shared responsibilities of all government – local and national - is to deliver key services in areas like health, mobility, housing and environment. The demand and the opportunities are huge: we have only just begun to see how public services can be improved when resources like public data sets are opened up and re-used. But startups/scale-ups and government services often have different priorities, sensitivities and timescales. They also have different ways of working. Both sides need to understand each other better. There are examples of this here and there - but it's far too underdeveloped. We must promote cooperation and dialogue.

Linda Griffin

King

VP, Global Public Policy

Disinformation is most frequently cited by respondents as the technology area that requires urgent attention from regulators. This is followed by artificial intelligence, data privacy and cybersecurity as other areas cited as requiring urgent attention. As interesting as what's top of the list, is what's on the bottom. Drones, intermediary liability, autonomous vehicles and blockchain were all far less likely to be cited as requiring urgent attention.

In your opinion, which areas in tech require urgent attention from regulators as they are likely to be most impactful for society (in a good or bad way) ? Select up to 3

Source:
Note:
Numbers do not add to 100 as respondents could select up to three responses.

It's interesting to explore the impact of European policy on the European startup community. Notably, almost half of founders of companies of 10 employees or fewer stated that they have not been negatively impacted by privacy regulation, though that still means that more than half of the region's smallest tech startups have been negatively impacted. The larger the company, the more likely founders are to report having been negatively impacted by privacy regulation over the last 12 months. The most frequent change cited by founders of companies with 10+ employees as having negatively impacted their business is the appointment of Data Protection Officers, a role that is both difficult and expensive to fill.

Which one of the following changes to privacy regulation have impacted your company the most over the last 12 months?

Source:

Legend

  • ≤10 employees
  • 11-100 employees
  • >100 employees
Note:
Founders only. Numbers may not add to 100 due to rounding.

The impact of data privacy regulation is the top-ranked area of regulation perceived as most challenging by founders of companies of all sizes.

Thinking about any potential negative impact on your business from regulation, which one area do you view as the most challenging for your company?

Source:

Legend

  • ≤10 employees
  • 11-100 employees
  • >100 employees
Note:
Founders only. Numbers may not add to 100 due to rounding.

VCs, LPs, tech workers and founders are more likely to agree that European founders can compete equally on the global tech stage, while policymakers and media are more sceptical. Who's right and who has the better vantage point? And if policymakers are sceptical about the ability for European founders to compete on the global stage, what can they do to better support the founders in that objective?

To what extent do you agree or disagree with the following statement: European founders can compete equally on the global technology stage

Source:

Legend

  • Agree
  • Disagree
  • Neither agree nor disagree
Note:
Numbers may not add to 100 due to rounding.

It's interesting that respondents from outside Europe show a materially higher level of agreement with the view that European founders can compete equally on the global stage.

To what extent do you agree or disagree with the following statement: European founders can compete equally on the global technology stage

Source:

Legend

  • Agree
  • Disagree
  • Neither agree nor disagree
Note:
Numbers may not add to 100 due to rounding.

Opinion is split on Europe's likelihood to gain ground relative to the US and China in the next decade.

Do you agree or disagree with the following statement? European tech is likely to gain ground relative to the US and China in the next decade

Source:

Legend

  • Agree
  • Disagree
  • Neither agree nor disagree
Note:
Numbers may not add to 100 due to rounding.

Europe's tech ecosystem remains characterised by a strong level of optimism about the future. 91% of respondents said they were more optimistic about the future of European tech or the same as they were 12 months ago. This is on par with the levels seen in the past two years.

Are you more or less optimistic about the future of European technology today than you were 12 months ago?

Source:
Note:
% of all respondents that answered either 'More' or 'About the same' .

Interestingly, however, there is a large divergence depending on the occupation of respondents. Investors in European tech, including both VCs and LPs, are amongst the most optimistic occupations, while founders and tech employees also expressed strong sense of optimism about the future of European tech. Policymakers, by contrast, were the least optimistic. This divergence of opinion between the founders operators and investors on the one hand, and policymakers on the other, speaks volumes.

Are you more or less optimistic about the future of European technology today than you were 12 months ago?

Source:

Legend

  • About the same
  • Less
  • More
Note:
Numbers may not add to 100 due to rounding.

There is still a wide gap between the world of policymaking and that of tech entrepreneurs... I think that venture capitalists have a key role to play in bridging that gap between the two worlds.

There is still a wide gap between the world of policymaking and that of tech entrepreneurs. Policymakers genuinely want to help, but they don't know a thing about tech startups, and they usually don’t count tech entrepreneurs as friends or acquaintances, which makes it even more difficult for them to understand what's going on. On the other hand, tech entrepreneurs have difficulties reaching out to policymakers because they don't understand that world, where everything seems so slow and so bureaucratic; they rightfully prefer to focus on growing their businesses. This is the reason why, by the way, I think that venture capitalists have a key role to play in bridging that gap between the two worlds. Unlike entrepreneurs, venture capitalists don't have to focus on one single problem over the course of several years. They can embrace a long-term view of the market, identify the many regulatory obstacles that still stand in the way, and help policymakers understand technology and come up with sound regulations designed to boost local champions. It's both about providing entrepreneurs with the resources and the security they need to take more risks and about raising the bar for European tech companies, forcing them to get better on various fronts, and ultimately consolidating their competitive advantage at a global scale - an industrial policy for the Entrepreneurial Age.

Nicolas Colin

The Family

Co-Founder & Director

The OECD has given the UK its highest overall score for the quality of our regulatory practices, but we're not resting on our laurels. We are bringing forward world-leading policies to boost innovation and build trust in digital markets, to promote ethical and responsible technology and give tech firms growing on our shores the competitive advantage they need.

Nicky Morgan

UK Secretary of State for Digital, Culture, Media & Sport.

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