Instead of settling for a “new normal” Europe has the opportunity to aim for a bold reset by building a network that involves every industry across the European Continent and connects entrepreneurs with corporates and/or investors to work on innovations targeted around the U.N.’s Sustainable Development Goals. That is the vision of a new movement called “RE:SET: Made in Europe” that is gathering support from the Continent’s business leaders, top entrepreneurs, venture capitalists, family offices and policy makers.
RE:SET is the brainchild of HumanCapitalNetwork, which describes itself as a venture capital and private equity firm that offers bespoke advice to family offices and supervisory boards. The firm was created by Rahmyn Kress and R. May Lee. Kress is a former Chief Digital Officer of German conglomerate Henkel and founder of Henkel X, an open innovation platform that is designed to help industrial players become more innovative and adopt disruptive business models. Lee brings her own unique multi-faceted approach to innovation and entrepreneurship: she has worked in finance, in law and as a corporate intrapreneur, educator and entrepreneur and is credited for leading a groundbreaking effort to establish NYU Shanghai, the first U.S. degree-granting campus in China. Together Kress and Lee are creating an exclusive network of experienced venture capitalists, entrepreneurs, academics and Fortune 500 companies that could end up leading a green revolution and the European economy’s revival.
“We imagine a global economy different from today,” says the RE:SET position paper, which was published this week. “If China is the factory of the world and the U.S. is the tech center of the exponential age, Europe is positioned to become the beating heart of growth and cutting-edge innovation in the sustainable economy. It is an amazing opportunity and a massive responsibility.”
European companies, big and small, have a real incentive to act. Some 79% of consumers are changing purchase preference based on the social responsibility, inclusiveness or environmental impact of their purchases, according to a Capgemini global survey released this week.
Supporters of the RE:SET initiative include Brigitte Mohn, a powerful German businesswoman who is a member of the board of the Bertelsmann Stiftung; Pablo Rodriguez, a serial entrepreneur and founder CEO at Telefonica’s Alpha, Europe’s first moonshot factory and Italian entrepreneur Riccardo Zacconi, co-founder of London-based gaming company King.com which went public with a valuation of $7.08 billion.
“We can’t delay responsibility for the future,” says Mohn. “We have to invest now and demand accountable results from governments and industry to shift into the circular economy and fulfill the Sustainable Development Goals over the next decades.”
Europe needs both growth and an accelerated digital transformation. “With a generally greener attitude our EU approach to growth will be much more sustainability-based than the U.S. or China,” says Torsten Kreindel, a managing partner at German venture capital firm DIVC. “Our highly differentiated start-ups, in interplay with a better organized collaboration with EU´s largest companies and institutions as partners and customers, will help the EU to reset and get up much stronger.”
There is an opportunity to “turn the science and research in Europe, together with the open innovation paradigm which have been used for short term linear innovation progress, into bold bets involving government, corporates and startups, that will move the needle for all and share the risk along the journey”, says Spanish entrepreneur Rodriguez, who has also worked for Microsoft and Bell Labs.
Empowering innovators who are tackling pressing challenges to both human health and planet health will be key, says Laura-Marie Töpfer Lead, Funding & Investors, for Switzerland-based UpLink a digital platform hosted by the World Economic Forum and developed in collaboration with founding partners Salesforce, Deloitte and LinkedIn, to crowdsource top innovations that tackle the most pressing global challenges, and connect them to influential networks which can scale these solutions.
While the pandemic has tightened startup funding, the current crisis also presents a unique opportunity to remove barriers to financing sustainable technologies and inclusive innovation, she says. Europe can play a leading role in this transition. Its hard-won pluralistic culture and prioritized digital and green agenda provide ideal conditions for the development of a connected yet distributed support infrastructure for entrepreneurs across entire industries.”
In practical terms, this means setting up open collaboration hubs with corporates, governments and research institutions that offer startups more flexible ways to unlock pilot projects, funding opportunities and expertise, she says. “Bundling public and private funds will be equally important to help crowd in private capital and de-risk more cautious investors on new asset classes such as growth-stage tech companies,” she says. “All these efforts require a much greater emphasis on giving a voice to the next generation of socially conscious entrepreneurs and fund managers alike. Whilst they face unique challenges such as untested business models and investment track records, it is critical to remember that they are also the creators and enablers of tomorrow’s life-changing solutions.”
While entrepreneurs are best at creating new solutions to market problems fast, corporates have the assets, points out Simon Torrance, a British senior advisor on business model transformation.
“Combining these strengths will be critical for Europe to compete. But this will require much better approaches based on new mindsets about how to manage and incentivise these collaborations to enable this to happen at scale and in a way that creates true impact,” he says. “This is a crucial new muscle that European corporate and government leaders need to build.”
Startup-corporate collaboration is not natural and needs the third component proposed by Re:set – blending together entrepreneurship, access to capital and intensive work with corporates, says Cecile Blilious, head of impact and sustainability at Israel’s Pitango Venture Capital. “Success depends on this third component. Creating the right framework will give Europe a huge advantage in building a structure that can later be replicated around the world.”
The framework also needs to include Europe’s companies established small and medium-sized enterprises. “From my point of view Europe is especially strong in family-owned hidden champions that are purpose-driven and that have a strong heritage in responsible business,” says Marc Sasserath, a professor for Innovation and Entrepreneurship at the ESCP Europe Business School. “Family businesses traditionally think in and for generations, are small enough to act with a high degree of agility and due to their ownership and leadership structure are able to create immediate transformational impact.”
SMEs, corporates, governments and startups need to pool their efforts, says Sasserath. “If we don’t act, we lose. We need to develop a strong European ecosystem fueled by a shared sense of urgency and the will to have impact on a global scale. The national entities are too weak to compete independently. We need to overcome national egotism and ignorance.”
To be successful Europe’s leaders must possess “a rare balance of entrepreneurial vision, business acumen and social commitment,” adds King.com founder Zacconi. “They must also understand the power of networks. HumanCapitalNetwork is a unique platform to connect the best human minds, bringing people together whose values meet but whose paths would not otherwise cross. The result is the ‘network effect’ at a human level. It is a formula that we believe will help usher in the next generation of disruptive innovation required to build the only future possible: prosperous, sustainable and fair.”
The Action Plan
RE:SET’s action plan has four major pillars: an open collaboration platform, the creation of an impact hub, the development of a sustainable innovation standard for education and training and the establishment of partnerships and financing mechanisms.
The open collaboration platform will be created by business and civic leaders in individual countries and spearheaded by an ambassador in each EU member state. Each national Re:set campaign will have the autonomy to define its priorities and actions, creating subgroups around sectors that can range from carbon capture and biotech to education reform and future of fashion, all with a focus on sustainable innovation. RE:SET will serve as a Continent-wide catalyst and help align national initiatives with the SDGs.
The creation of an impact hub is described as a way of accelerating the market entrance of startups by facilitating access to funds and connections to corporates, governments, organizations as well as assistance with media exposure and marketing.
Expanding the talent pool for SDG entrepreneurs and researchers is another goal. The action plan proposes making courses about the U.N. goals and entrepreneurship mandatory in schools and universities while broadening the definition of education with the inclusion of personal capacity-building and skill-set enhancement.
Specific partnerships and financing mechanisms proposed in the action plan include initiating a fund to support startup innovation and education; establishing a 1:1 matching mechanism for public-private capital; creating an infrastructure for collaboration between universities, research and development organizations and startups in key industries.
“We believe Europe has the unique capacity to innovate faster and build businesses with purpose,” concludes RE:SET’s position paper. “This is an open invitation to join us to make Europe stronger together.”
In other news this week:
China’s central bank is partnering up with Didi Chuxing to test the use of its digital currency, which could make China’s dominant ride hailing platform one of the world’s first’s corporate users of a government-created virtual currency.
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