France and Germany push the EU to fund tech innovation

(Reuters) – France and Germany are pushing for an EU-wide initiative to fund innovation and research in tech startup projects across the region so that Europe can compete more effectively against the likes of China and the United States.

Europe has long been seen as a laggard in developing new technologies compared with the United States, which has a strong venture capital industry funding Silicon Valley startups.The more risk-averse culture in Europe has also been cited as an obstacle to creating a “European Google,” partly because failure can carry more stigma than it does across the Atlantic.

Berlin and Paris called for the European Innovation Council to fund “ambitious” tech startups in a paper presented to European Union leaders at the Balkan summit last week.

“A joint effort is also needed to further improve the venture capital environment and regulations to allow successful market transfer of breakthrough innovations, as well as the foundation and growth of disruptive deep technology companies in Europe,” the paper, seen by Reuters, said.

EU heavyweights France and Germany are pushing for reforms in various sectors before a summit of EU leaders in June and want Europe to be ahead in new digital technologies.

In the paper they say the aim is to create a network to bring breakthrough innovations in science to the marketplace and to open up the network to other interested EU countries. France and Germany want national initiatives to be complemented by EU ones, which can have more added value for the establishment and the growth of tech startups, the paper said.

France has already promised to spend 1.5 billion euros ($1.75 billion) on artificial intelligence by 2022 to reverse a brain drain and catch up with dominant U.S. and Chinese tech giants.

Berlin and Paris want their project to focus on tech leaders in academia, as well as entrepreneurs, and to provide funding for high-risk tech projects.