Stefan Drüssler is a founding member of Rise Europe, a new initiative that unites leading start-up ecosystem builders from 14 European countries to empower European start-ups. He is Managing Director and Chief Operating Officer of UnternehmerTUM, responsible for the entrepreneurship education and start-up journeys, facilitating international partnerships and organizing its major events. Before joining UnternehmerTUM, a European center for innovation and business creation connected with The Technical University of Munich, Drüssler worked as strategy consultant for the Boston Consulting Group. He recently spoke to The Innovator about boosting innovation in Europe.
Q: Tell us about Rise Europe
SD: In spring of this year representatives from 14 European countries came together in the Bavarian Alps to form Rise Europe, a network of 20 ecosystem builders from Europe’s leading universities and start-up hubs. The idea behind Rise Europe is to combine top ecosystem builders – individuals and people driven and motivated by creating innovation ecosystems – to help move things fast and pragmatically. Everyone in the group is a doer and is already playing a crucial role in driving European innovation. We share a common vision: strengthening “made in Europe” innovations and combining our strengths to accelerate start-up teams, thus contributing to European technological sovereignty. Our ambition is to match the innovativeness of countries such as the United States and China by helping European start-ups to scale.
Q: Why now?
SD: Europe has fallen behind. Rise Europe has just completed a report, with McKinsey’s analytical support, that sums up the situation: In 2007, the sizes of the EU and U.S. economies were roughly the same at approximately $14 trillion each at current prices. Adding Norway, Switzerland, and the United Kingdom, the European economy was even larger at approximately $19 trillion. However, in 2012, the gap began to widen between Europe and the U.S. Today, the U.S. economy is around $9 trillion larger than the EU’s, putting the EU in third place after China and the U.S. The growing gap between the US and Europe is due, in part, to the U.S. outpacing Europe in innovation and its investment in tech that makes innovation possible. In 2020, European companies only invested in about 53 % of the R &D spending/revenue that US companies did. If you look at specific sectors in tech, venture capital funding for robotics in the EU, for example, was only one-fifth of the funding in the US from 2015 to 2020 ($1 billion versus $5 billion). This overall lack of investment has resulted in Europe’s diminished impact in tech. For example, in programming, only 10 % of low/no-code platforms came from Europe in 2020, while the U.S. was responsible for 75 % that same year. In biotech, Europe developed only half as many approved pharmaceuticals as the U.S. from 2018 to 2020 and captured only 2 % of Cloud revenue in 2021 compared to the U.S.’s 73%. In sum, Europe did not invest enough, and we did not believe in the startup economy.
Q: How will Rise Europe try and change that dynamic?
SD: Rise Europe’s goal is to help European high-potential start-ups gain more visibility and attract more interest from venture capital funds, large corporates, and other supporters of Europe’s innovative power in the technology sector. Thanks to Rise Europe’s 20 start-up centers, a total of 38,000 young entrepreneurs across Europe were supported last year and the 20 partner centers supported over 2,300 emerging start-ups in their scaling phases in 2022.. Start-ups supported by these European start-up centers received a total of €7.8 billion of investments, which amounts to around 10% of the total investment in the European tech industry, according to Dealroom In the next few years Rise Europe’s entrepreneurship hubs will work closely to expand their already-established local ecosystems, developing them on a European level. The idea is to hold network and matchmaking events that will create more funding opportunities for international teams. Formats like a Rise & Pitch event by Rise Europe will unite high-potential start-ups and investors from 14 countries to facilitate the type of collaboration that strengthens the entire Continent.
Q: This all sounds great, but U.S. startups have a homogenous market. Scaling in Europe remains a challenge.
SD: Fragmentation across Europe is a clear constraint. For a European start-up to address a market that is similar in size to that of the U.S., it would need to enter 30 heterogeneous countries: the EU-27 plus Norway, Switzerland, and the UK. To drive start-up performance throughout the region and ensure that scaling is not limited to outliers, Rise Europe has just published a ‘Scale-up Navigator’ that advises European startups on how, when, and where to internationalize their companies. It provides important facts on the countries represented in the Rise Europe network and covers what the Rise Europe ecosystems individually represent and offer.
Q: What message would you like readers to take away about innovation in Europe?
SD: Rise Europe members each nominated ten start-ups with the greatest potential to become the next start-up championsand categorized them into four future fields. These scale-ups —including Fernride, IQM, and Ynsect—stand out for their promising growth and positive impact on the environment and society. The four areas reflect the large potential that Europe’s startups have in aerospace,mobility, AI, robotics, energy, climate neutrality/circular economy, and food and healthcare. We additionally need to capitalize on and magnify the strengths of individual European countries. Sweden is far ahead compared to the European average when it comes to scaling. If startups can scale from Sweden, it means European startups can scale, despite boundaries and the complexity. Estonia has more than 2x the number of startups than the U.S. Yes, I know, it is a small country, but if Estonia can produce that many startups it means that it is possible for other European countries to do so as well. Switzerland has 3.6X more patent applications than U.S. and Germany has 2x more graduates than the U.S. in engineering, science and math. We have strengths that we can really bet on, and I am optimistic that if we join forces, we can do more.
McKinsey’s analysis in our report says that Europe’s economic gap could be decreased by boosting the start-up ecosystem in ways that drive innovation, increase GDP, and support greater employment.If the start-up ecosystem of each country in Europe was as good as the average of the top-third, the region could see an additional market cap of up to $3.3 trillion. What is more, this increased performance has the potential to create up to $8.1 million additional jobs and up to 200,000 additional start-ups.
To create sustainable wealth, you need broad innovation and to encourage that, established companies need to be willing to support startups at an early stage. I understand that it can be overwhelming for corporates to decide where to invest. My message is that it makes sense to leverage Europe’s very strong ecosystems and the superhubs in the Rise Europe network. If startups are part of these hubs, it is a sign of quality. We invite corporates to join us. If we want Europe to thrive and play on the same playing field as the U.S. and China, we all need to pull together.
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