Europe must accept disruptive innovation

Europe must “steel its nerve to permit disruptive innovations” says Eric Schmidt, chairman of Google, in a guest article for the European Commissioner for the Digital Agenda, Neelie Kroes.

The comment refers to Uber, the taxi service which uses smartphone apps to connect drivers and customers. The app has met with bans and protests by traditional taxi drivers, and caused controversy in Belgium, Germany and France.

“Uber is shaking up the taxi market for the good. It offers riders convenience and cheaper fares. Understandably, the incumbent taxi industry is unhappy,” Schmidt.

Kroes, a vocal supporter of Uber, has previously said that moves to ban Uber has more to do with protecting a “taxi cartel” and sends an “anti-tech” message.

Europe’s tech scene – good and bad

While investment in tech is still lower than in the US, Schmidt praises Europe’s “vibrant” start-up scene, hailing the success of Shazam and King in the UK, Criteo and BlaBlaCars in France, Spotify and Skype in the Nordics and Soundcloud in Germany.

Companies that embrace digital, on average, generate 9 per cent more revenue, and their profitability outperforms that of their non-digital peers by 26 per cent.

The role of the internet in minimising costs for new companies cannot be overstated. “With a few clicks of a mouse, a Greek B&B owner, a French fashion designer, and a Swedish candy maker to reach a global marketplace,” Schmidt says.

“At the same time, Europe needs to reform and forge a true digital single market. This will give European entrepreneurs, who have all the right building blocks, the incentive to invest and the ability to achieve global scale at greater speed. Significant political will needs to be mustered to support these changes and ensure Europe’s start-ups succeed.”

Tearing down regulatory barriers will deliver big rewards. “Europe’s digital businesses no longer would have to get individual licenses to operate in 28 different countries. If regulatory barriers are removed, start-ups could directly access half a billion European consumers, a market that’s larger than the US, where technology companies have the ability to achieve scale before they expand internationally.”

Digital series

Kroes has set up the series, called “Digital Minds for a New Europe” – and there are another 39 essays to come. Future contributions to the series will be coming from outgoing EU Council president Herman Van Rompuy, one of the “fathers of the internet”, Vint Cerf, and architect Rem Koolhaas.