Europe’s economy can compete to win on the global stage if it brings its private funding strengths to the table. That’s the view of Lars Frølund, lecturer in the field of innovation ecosystems at MIT and board member of the European Innovation Council (EIC).
When I spoke with Lars at the EIC Summit in Brussels, he told me that creating a new era of European dynamism hinges on unlocking the financial might of the continent’s pension funds, as well as the wealth of its foundations and big industrial families. He says this can only happen if Europe has an honest conversation with itself and asks: “what are the key fundamental things that we need to change and be proactive on?”
“For the last 10 years I’ve been hearing myself say the same phrase, which is: how do we get our pension funds to be part of this, especially our late stage investments? How do we get our family offices that have become wealthy on our industrialisation of Europe to do much more?”
Freeing up pension funds to invest in areas like quantum technologies and removing unecessary bureaucratic barriers are non-negotiable, Lars says, if Europe wants to achieve success.
“You can compete to win, or compete not to lose,” he said. “And when you compete to win, you need to know what winning looks like.” Which he argues is being able to strike the balance between ‘protect’ and ‘promote’.
“We have become predominantly focused on ‘protect’; predominantly focused on how we can shy away from opportunities, by putting different mechanisms around specific technologies. but we need to get the ‘promote’ mechanisms in place, to get the right balance between some ‘protect’ and ‘promote’.”
He added: “We are in a fierce competition with China in areas like AI, advanced semiconductors, quantum tech and biotech and we need a policy paper with two columns not only to protect, but the equivalent amount of money and regulatory changes, the fundamental changes, that are needed to we drive money into these areas.”
Lars insists the major progress he wants to see won’t come from public funds though, but by “getting private funding activated in totally new ways”, by unlocking the huge financial pots owned by foundations and the big industrial families of Europe.
“In my own country of origin, Denmark, for example, we have some very big foundations, like the Novo Nordisk Foundation. And we launched a national quantum strategy, where one of the key things was to create something called Quantum Foundry Copenhagen, and that is funded through the Novo Nordisk Foundation. This is an example of an infrastructure, a shared infrastructure where quantum companies can be invited.”
Building pan-European infrastructures and models like this is critical, Lars believes, and it’s the same idea with the big industrial families: “it’s about reuniting the families and getting them together – because they collectively can do more than they can individually”.
He said: “I’m talking about some of the big industrial families of Europe. They do a lot of investments and a lot of initiatives. But some of them are also very much focused on their own country of origin so we’ve got to pull them together. That could be significant for Europe.”
He added: “Getting all of these types of investors activated, these are the key things that I would like to work on, to bring them to the table so that they can understand that from an investor viewpoint, this is the only thing that actually matters – because that’s where you can get critical mass and investment into good companies, not into geography.”
Lars says this will be his focus for “the next couple of years” as he works to build a dynamic Europe that can compete to win. And when I asked him what his message was to investors ready to play a part, he said: give me a call.
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