California's Silicon Valley continues to dominate Europe

After a series of recent European tech conferences, Silicon Valley continues to dominate. Tech venture capital in Europe still remains relatively small, due to bureaucracy, language problems.

It was hard to ignore the dominance of Silicon Valley at this year's LeWeb tech conference last week in Paris - nearly all the speakers and featured guests were from California's famed tech hub.

While European innovation is picking up speed, it is starting from a long way behind the American startup scene - participants at the conference blamed over-cautious investors and misguided government spending.

Adventurous investors tend to be entrepreneurs themselves, so, where Silicon Valley has created a virtuous cycle, Europe is faced with a chicken-and-egg situation: there's not enough money because there are not enough start-ups, and there are not enough start-ups because there's not enough money.

"I know quite a few companies that moved to the valley just because they found capital there," said Sarik Weber, a German entrepreneur who runs the start-up incubator programme Hanse Ventures in Hamburg. His company provides capital and advice to new businesses.

"The whole Silicon Valley ecosystem is based on 40 to 50 years of entrepreneurs building their companies doing exits very successfully and then reinvesting this money back into the ecosystem," he added.

"This is what really fosters the European startup scene. When we get great exits like Skype or others, these people reinvest their money into European start-ups and we have to create that."

While European governments spend more on research and development than their American and Japanese counterparts, experts say that tax incentives and subsidies are not doing anything to encourage private-sector investors.

"The state is doing its job, but do the individual investors have enough confidence to invest more in research and development?" said Pierre Monhen, who teaches innovation policy at the United Nations University in Maastricht, the Netherlands. "There is a more cautious attitude in Europe than in the US."

Source: Deutsche Welle

 

Dominating Europe is all good.