Europe’s Innovation Emergency: Are We Sleepwalking into Decline?”

4 min readMay 8, 2024

Europe is a place of rich cultural history, beautiful landscapes, and… cheap labor for Google? In a recent decision, Google laid off several employees from US to reduce costs and is aiming to hire in cheaper labour locations. I was quite surprised when I read that Munich, Germany is being considered to be that cheaper location to set up a new team. How the mighty have fallen ?

In the fast pace world of tech and innovation, Europe find itself at a crossroads. And it’s not just tech sector but also public services like telecommunication, energy grids, defence etc. This fact was iterated by Mario Draghi (Former President of European Central Bank) during his recent speech in Brussels. As the rest of the world continues to evolve in innovation and digital transformation, Europe risks being left in the shadows of its own potential. You can read the summary about the challenges and solutions mentioned by him here.

Disparity between Europe and US:

Europe has been extremly slow to adopt and promote new technology. The difference between investments done by US and Europe into it’s tech sector is staggering. Big tech companies like Google, Microsoft, Meta has already confirmed that they will be investing $140 Billion in Tech & Artifical Intilligence (AI) in 2024 Alone. The collective investment of Nasdaq companies should be about $1 Trillion. In comparision, total capital raised by tech companies was about $62 Billion in 2023 and will struggle to cross $100 billion in 2024.

In Non-tech, Europe has been highly dependent on imports to meet it’s energy and mineral needs. European industries are heavily fragmented and bureacracy is slowing down reforms. As US and China are now focusing on protecting their own economy by giving subsidies, European exports are getting tough competition.

Failure to attract talent:

After living in Europe for about 5 years, I can say with confidence that Europe cannot be compared with US in terms of job opportunities, carrer growth, and salaries. Expact forums and facebook pages are filled with incidents of discrimination and racism in Europe which outlines how talent and skills are undervalued here. Based on anecdotal data, I know that atleast 30% of Indians who came to Germany migrated out of Germany in 2–3 years span due to various issues.

Due to my role as a Senior Leader in Amazon I get to speak to colleagues across the globe on daily basis. I know multiple Europeans who either want to go to US or already migrated for higher compensation which can be 3x to 4x higher than what you can earn in Europe. A German colleague of mine has a plan to work few years in US and then buy an apartment in Mallorca, Spain, as a Retirement home. Something which they don’t see happening soon if they continue to work in Germany.

Untapped Potential:

Inspite of all the mentioned challenges, Europe isn’t lacking in Potential. France have done great job so far in the field of AI. Almost all the members of the Meta AI Llama Research team are located at FAIR-Paris; The founders of Hugging Face, one of the most important AI platforms globally are French; and Europe’s very own OpenAI contender i.e. Mistral AI is based out of France. European Union has announced funding of €67.5 million to invest in projects to accelerate and strengthen the adoption of artificial intelligence (AI) technologies in Europe. It will be interesting to see how much of this money will actually be utilized.

Furthermore, Marco Draghi has proposed some Europe wide measures which can potentially improve the current situation. He proposed achieving scale through measures like joint procurements, regulatory harmonization, securing supply chain, supporting the innovative startups across the EU, etc. He also mentioned that it’s high time for European wages to rise so that more money is circulated in the economy. Overall, the key lies in close collaboration and newfound unity among member states, a change in outlook from previously fragmented approach that has hindered Europe’s progress so far.

Closing Remarks:

I hope that Europe does not become a backoffice for US and China in the future. There are many positive aspects of living in Europe e.g. good quality of life, work-life balance, stunning places to travel, etc. Europe still is a powerhouse in Manufacturing. Hopefully the leaders take concrete actions for a better tomorrow.

References:

Europe’s Innovation Emergency: Are We Sleepwalking into Decline?”

Disparity between Europe and US:

Failure to attract talent:

Untapped Potential:

Closing Remarks:

Written by Krishna Sharma

No responses yet