This is the fourteenth in a planned series of exclusive columns former Cisco Executive Chairman and CEO John Chambers is producing for The Innovator. Chambers, who is widely considered one of the best performing U.S. CEOs during his 25+ year tenure at Cisco, helped grow the company from $70 million when he joined in 1991, to $1.2 billion when he became CEO in 1995, to $47 billion when he stepped down as CEO in 2015. As Executive Chairman, a position Chambers held until December 2017, he led the Board of Directors and provided counsel to the CEO and leadership team on strategy, digital transformation, and strategic partnerships, Chambers oversaw 180 mergers and acquisitions during his tenure at Cisco and managed the company through multiple economic downturns. He currently runs JC2 Ventures as CEO and serves as an advisor to heads of state, including France’s Emmanuel Macron and India’s Narendra Modi. In this column Chambers talks about why he is betting on France to help Europe lead in technology.
June was a busy month for French President Emmanuel Macron. He inaugurated JPMorgan’s new trading hub in the French capital, which he hopes will attract more bankers leaving Britain due to Brexit. The U.S. bank’s chief executive, Jamie Dimon, was one of almost 120 international CEOs who traveled to Versailles for Macron’s “Choose France” Summit, which shines a light on France as an investment destination. Large financial companies (or any large organizations for that matter) will probably not add significant headcount over the next decade, but they will use technology — and they want to go where they are welcome and where there is an environment conducive to creating a strong ecosystem of partners.
A few weeks earlier, Macron was at VivaTech, which is a Paris-based global technology conference I attend every year. While there, he announced a new goal to an audience of venture capitalists and startups: He wants to see 10 tech companies worth more than €100 billion in Europe by 2030. He also participated in a panel with the leaders of some of Europe’s most successful tech companies to understand how to fix the barriers they face when trying to expand their businesses, a nod to the Scale-up Europe initiative Macron launched in 2020. Macron was clearly underscoring his understanding that for France to win long-term, the EU has to win. The audience was receptive to Macron’s messages, which is a real testament to the appeal of the pro-business reforms the former investment banker has implemented since his election in 2017.
Speaking to Euronews Next at VivaTech, Macron said France was the number one country in continental Europe for raising funds to innovate in the tech sector, but more has to be done. “Since 2017, fundraising has doubled. We hit €5.4 billion in 2020, we’re going to exceed that in 2021,” he said. “We’ve tripled the amount of funds raised in bulk and we’ve created between 150,000 and 200,000 jobs. We absolutely must not rest on our laurels. We have to go faster and harder, and in particular, deploy the same strategies that we have adopted at the European level.”
Macron is, of course, right. Speed is critical if France and Europe are to succeed. Over the past three years, the number of unicorns, startups valued at more than €1 billion, has tripled in France, against a rise of just 69 % in the UK and 44 % in Germany. France is aiming to have 25 by 2025 (but I think they’ll do 40 or maybe 50 – I’m an optimist by nature!). The amount of international venture capital investment nearly doubled between 2013 and 2020 and there has been a four-fold increase in the amount of international limited partner investment during the same period.
What’s more, I think this progress has the potential to accelerate France and other countries in Europe as well, which I would argue are not moving as fast as France right now but can look to them as a replicable model – and they should. With France taking over the rotating presidency of the European Council in January 2022, it’s very possible that we will see even faster progress and hopefully a unified progress among the EU to foster and breed innovation – and ultimately startups.
We are in the middle of a transformation driven by a wave of new technology, and it is not at all certain how it will turn out. The first wave was the Internet, which democratized technology and literally changed the way people work, learn and play. Europe lost out in those early days. The second wave was Cloud and social media. Europe once again was left behind, taking the role of slow follower rather than fast innovator. The current third wave is being fueled by a combination of IoT and artificial intelligence. It doesn’t have to be a zero-sum game. It can be inclusive, but it will be a game in which the fast beat the slow, where you disrupt, or you get disrupted.
Former U.S. President Bill Clinton understood that large scale innovation transformations require political leadership. By being the first to embrace the Internet on a large scale, the U.S. had the best economic results in four decades; 22.5 million jobs were created, there was real GDP growth over eight years of an average of 34%, and the average American income went up by an average 24%. Clinton, with Vice President Al Gore as his wingman and Ira Magaziner as his advisor, created the environment that allowed Cisco to grow from $70 million to $47 billion and create 10,000 millionaires among our employees, while also paving the way for companies like Microsoft, Oracle, Facebook, Google, and Apple.
The lesson? If you don’t have technology leadership, you will not have job creation and economic growth. So, the question is: what is Europe going to do with IoT and AI? When I was Executive Chairman of Cisco, I went to Europe to talk to government leaders about how to digitize at a faster speed. I visited Germany and Britain, without much luck. I then went to France, which I did not think would be receptive, but when I met the leadership there, I found the opposite to be true. They understood it and wanted to embrace it – and fast. They signed off on a strategic partnership with Cisco to digitalize France, all of their ministers supported it, and they announced it publicly, which I have never seen a government do. Macron was the economy minister at that time, and from that point on, he made digitization a key part of his platform.
It is often a single leader – a Bill Gates, a Steve Jobs, a Mark Zuckerberg or a Jeff Bezos – that is responsible when a company breaks out and leads the way. It is the same thing when a country moves. The leader outlines the strategy for the country and then constantly reinforces it through their actions. In this way, France has become, in my opinion, the most innovative country in Europe. It has moved from the worst place to create jobs and new businesses to the best – but it’s not only that. France is encouraging the rest of Europe to move with it. And Europe is beginning to understand the value of this opportunity. Others in the EU appear to be willing to take more risk and do what is necessary to achieve economies of scale.
So, what happens now? Each country needs a government-level digital plan – and there also needs to be a larger, broader plan for how the entire European community can come together to create a “Startup Europe,” realizing that they need to change and move fast. Under Macron’s leadership, France is breaking away. If Europe is to succeed, the other countries will need to follow its lead and innovate at an equal pace.
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