By Adam Peaker
The European Investment Bank (EIB) has announced €70 billion in funding to support start-ups and tech companies by 2027.
US tech giants
This announcement comes as digital services, such as social media platforms, and the wider tech industry are dominated by US tech giants Microsoft, Amazon, Apple, and Meta.
These companies are worth trillions of dollars, more than many European countries’ entire economies.
From hardware like the iPhone to software such as Windows to more behind-the-scenes services like web hosting, those companies’ collective internet presence is deeply entrenched in European economies.
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Lagging behind
The Finnish brand Nokia was once the crown jewel of Europe’s tech industry, with its classic design and reputation for being practically indestructible.
20 years later, that same design is still being sold – a sign that Europe’s lagging tech industry has not moved with the times.
Given that Chinese apps like ByteDance’s TikTok and hardware like Huawei’s mobile phones quickly found their footing in the market, Europe has no excuse as it faces being left behind in the tech race.
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Record fines
The EU views the current reigning US and Chinese tech giants as too large and influential, with European Commission president Ursula von der Leyen stating in a 2024 release that “tech giants must assume responsibility for their enormous systemic power in our society and economy”.
The EU has since put several data protection and competition laws in place.
The Digital Markets Act, Digital Services Act, and General Data Protection Regulation are aimed at forcing companies to open up their platforms to competitors, combat disinformation propagated by their services, and better protect user privacy.
In April, the EU fined Apple and Meta €700 million and €500 million respectively, citing violations of these Acts for the first time.
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A window of opportunity
Despite efforts to level the playing field, European tech companies continue to flock to Silicon Valley, whether willingly relocating or after being bought out by an established firm.
European start-ups struggle to scale as rapidly as their US counterparts, partly due to regulation and partly due to a lack of accessible investment funding.
It is thus hoped that the €70 billion announced on Monday will plug this investment gap, with EIB Group president Nadia Calviño stating in an interview with German newspaper Handelsblatt that the fund “aims to nurture the private venture capital ecosystem in Europe”.
Uncertainty across the pond caused by US president Donald Trump’s ‘America First’ policy also represents “an opportunity for Europe to attract talent, to attract investment, to attract capital”, Calviño added.
It remains to be seen whether or not this money will encourage companies to stay in Europe and grow large enough to compete on the global stage.
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