Spotify is one of Europe’s few big tech success stories © Getty Images for Spotify

Gerard de Graaf reckons Europe has all the elements to be a successful technology centre: top universities, good public services, a strong industrial base and expertise in healthcare and energy.

“We need to just bring all the ingredients together and make a nice spaghetti carbonara,” the European Commission official told the FT’s sister site Sifted.

Good luck to him. At the moment, though, the egg is not in the pasta but on the faces of Europe’s tech boosters.

Last week, an FT series on companies that have prospered during the pandemic ranked the corporate world by equity value added in 2020, a list headed by Amazon, Microsoft and Apple. The US and China dominated the rankings, with 71 of 100 companies. Europe, including the UK and Switzerland, provided only 15 entries, mainly venerable names such as Nestlé, Unilever and L’Oréal.

Only Swedish music streamer Spotify and an eclectic mix of Dutch companies — Prosus, Adyen, ASML and Just Eat Takeaway — represented the continent’s tech sector. And even that flatters Europe. Prosus is just the international assets of South African tech group Naspers, dominated by its stake in China’s Tencent. Spotify is truly a European success but has previously hinted it could move its base from Stockholm to New York, partly because of high taxes.

Perhaps this filter — which gives outsized emphasis to the largest companies — neglects some rising stars? Unfortunately, the next tier is not much more impressive. Monzo, a UK fintech, has just raised money at a 40 per cent lower valuation than the last time it went out to investors. Food delivery company Deliveroo needs Amazon to prop it up. Then there is Wirecard, the German fintech that filed for insolvency this week after admitting a colossal fraud.

There are promising tech companies in Europe but the yawning gulf with Asia and the US needs to be confronted. With vast populations of young consumers and workers on their doorsteps, huge pools of capital and — in Silicon Valley — decades of expertise, it is hard to compete.

According to Mr de Graaf, there is still a lot to play for. He notes that tech will evolve beyond the social media platforms of today. “We’re not going to beat the Americans at American football or the Chinese at ping pong,” he said. “We need to play to our own strengths.”

But that assumes the established tech giants of the US and Asia will stand still. They have already shown a voracious appetite for expansion into new markets.

The biggest hope for Europe is government policy, not so much from Brussels but Washington. With his new ban on work visas, Donald Trump threatens one of the linchpins of Silicon Valley, which relies heavily on immigrant talent.

In response to the ban, Patrick Collison, the Ireland-born co-founder of San Francisco-based fintech group Stripe, warned: “Becoming the pre-eminent locus of agglomeration for the world’s plucky up-and-comers has been one of the US’s greatest achievements and most potent advantages.”

If Mr Trump maintains his ban and is re-elected, he will deter companies from founding and growing in the US. Perhaps then they will prefer to set up somewhere with a more welcoming attitude to immigrants, together with important perks such as a good public health system, fewer guns and a more laid-back lifestyle. Like Canada.


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