The 2018 State of European Tech report, now in its fourth year, was released today. Assembled by investment firm Atomico, the report was unveiled today at the Slush tech conference being held this week in Helsinki.
“In another extraordinary year, investment in European tech reached a record $23 billion — up from $5 billion just five years ago. European founders created 17 billion-dollar companies. And in 2018, Europe produced three of the ten biggest venture-backed public listings,” the report reads.
The annual attempt to encapsulate European tech’s biggest issues and opportunities found some positive trends, like tech workers who are resoundingly optimistic about the future and who believe their industry will do more to help address societal challenges than governments. However, roughly half of all women and people of African descent say they have experienced discrimination in the workplace.
Though the 2017 report revealed much concern among startup founders about the impact of Article 50, which kicked off the formal process for the United Kingdom to leave the EU, the U.K. and London remain the primary places to find the largest concentrations of investment capital, researchers, and developers in Europe.
The 2018 State of European Tech was compiled with data from partner organizations like CBRE, Meetup.com, LinkedIn, London Stock Exchange, and European Startup Initiative.
Among other highlights:
- The tech sector is growing 5 times faster than the non-tech portion of the economy.
- Germany and U.K. remain a top destination for migratory talent moving within the European tech industry; nearly half of tech workers in London and Berlin are immigrants.
- London remains a top destination city for startup founders looking to expand or start a company within Europe; however, the answer to this question can vary by region, according to Startup Heatmap Europe. For example, Scandinavian respondents were more likely to list Stockholm as a destination to build a company, and Central or Eastern European founders were more likely to say Berlin.
- People from outside Europe who come to work for European tech companies are most often from India (39 percent), United States (17 percent), and Brazil (7.5 percent), while the United States (32 percent), India (20.3 percent), and Canada (9.5 percent) are the top destinations for European tech workers who choose to work abroad.
- At 7.3 percent, France saw the largest tech worker population growth of any country this year, according to LinkedIn data analyzed by Atomico, followed by Portugal (6.4 percent) and Ireland (6.3 percent). By comparison, France saw a growth rate of 3.6 percent last year.
- Nokia, Microsoft, and the Boston Consulting Group are among companies whose former employees were most likely to create their own startups, according to dealroom.co.
- Turkey and Spain have the fastest growing developer ecosystems, while Iceland, the Netherlands, Switzerland, and Sweden have the highest population density of developers. London, Amsterdam, and Paris attract more developers than all other European cities, according to Stack Overflow data.
The report also includes a survey conducted in September and October that explores a range of topics with more than 5,000 respondents.
More than 60 percent of respondents said they believe European tech entrepreneurs will do more to address societal challenges than governments, and that the biggest obstacles to becoming are an entrepreneur are that it’s too risky or the lack of funding or ideas.
This year, respondents were also asked about matters of diversity and inclusion, a subject examined for the first time in the report’s history. About 45 percent of women said they have experienced some form of discrimination, and people of African descent were more likely to experience discrimination than not.
There appears to be a gap between perception of how things work at their own company versus the wider tech economy: Roughly 75 percent of respondents said they believe the culture at their own company is inclusive, and nearly 90 percent said they agree diversity is a benefit to company performance, but only 47 percent of respondents said they believe the European tech ecosystem overall is inclusive.
Conversely, a majority of men believe the European tech ecosystem is inclusive, while only 38 percent of women agree — and still fewer female startup founders.
Like in the United States, ventures led by men were most likely to receive backing from investment firms, as all-male founding teams received around 93 percent of the capital and 85 percent of the deals, according to Dealroom.co data.
To help companies address the situation, Atomico also released a guide today to help entrepreneurs build inclusive businesses.
Among recommendations in the report, the State of European Tech implores the business sector to deepen its connections with the research community and STEM fields in order to compete with major global economic powers. Europe has 1.8 million scientists, engineers, and researchers, followed by 1.5 million in China and 1.3 million in the United States.
“Europe is a research powerhouse. Its prolific research community exceeds that of the U.S. and China, and is flexing its muscle in deep tech. This research prowess can be a strong differentiator for European tech as science and tech further converge. The key to making that happen: knowledge transfer and better links between STEM and startups,” the report reads.
For the second consecutive year, artificial intelligence remains a top area of investment among the fields of deep tech.
More than half of academic or research community respondents to the survey said help accessing capital was among one of the biggest things that could make it easier for them to start their own companies.
Source: VentureBeat
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