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If Charles Dickens were to write again. A tale of two cities Today, he may well change places. To illustrate the best and worst of contemporary Europe, the novelist might have chosen Helsinki and Venice, both of which I visited this month.
For centuries, Venice was one of the world’s most dynamic commercial and financial centers and a formidable naval power. But the city now lives on as a magnificent museum and tourist magnet. Venice is ridiculously beautiful and culturally rich, even if the environment is threatened. It is also an example of how even enduring empires can end up as political backwaters.
By contrast, Helsinki boasts little of the beauty or artistic heritage of Venice. But it is a far better model of how Europe can reinvigorate itself and reassert its technological relevance. The SlushTech conference, which drew 13,000 attendees to the city this week, highlights Finland’s attractions as a business hotspot. For a shot of positive adrenaline, there are few better places to visit in Europe. Just this week, Ora, a Finnish smart ring maker, raised funding at a valuation of $5.2bn.
Finland’s excellent balance between capitalism and welfare ensures that it consistently ranks as the happiest country in the world. But it believes in hard power as well as soft and is determined to defend its sovereignty. Fearing an all-out Russian invasion of Ukraine, Finland joined the NATO defense alliance last year. It currently spends 2.4 percent of GDP on defense, the highest in Europe.
The country is also a star performer in Atomco’s latest annual State of European Tech report, released this week, which highlights how the region’s tech ecosystem has blossomed over the past decade. . Between 2015 and 2024, European startups raised $426bn, 10 times more than in the previous decade. With 35,000 early-stage startups across the region, Europe ranks with the US in terms of company creation.
But even in Europe’s spirited north, the mood of European founders is pessimistic. Northvolt, the Swedish battery maker once seen as one of the region’s most promising companies, is fighting for survival. Klarna, the country’s fintech company, has just announced that it plans to float in the US, not Europe. And there was concern among Slush attendees that Europe was being left behind in the latest artificial intelligence revolution by the money being invested by US tech giants.
Businesses in Europe do not have high expectations of their political leaders, with France and Germany in particular facing uncertainty. But there are two relatively uncontroversial ways in which politicians can help promote Europe’s new economy. First, they can step up their efforts to mobilize growth capital. Second, they could create a common European corporate structure to help start-ups operate in the EU.
Europe undoubtedly has impressive research depth in many key technologies — AI, climate tech, quantum, biotech and nuclear fission and fusion — and thousands of ambitious startups to exploit them. But Europe’s apparent lack of growth capital acts as a serious impediment to a rapidly winning global presence. Atomico estimates that European pension funds devote less than 0.01 per cent of their €9.6tn assets to investments.
“We have magic in our hands,” says Juha Vartiainen, co-founder of IQM, a Finnish startup that employs 120 PhDs to explore the frontiers of quantum computing. But even though the company has strong state backing and has raised €200mn in funding, IQM fears the industry could move across the Atlantic as investment ramps up. “Europe needs to find its identity in tech or it will become a museum,” Vartiainen told me.
To that end, 13,000 signatories from the tech sector have signed a petition calling on the incoming EU Commission to create an “EU Inc” corporate structure, cutting red tape to a market of 450 million users. Easy access should be provided. “The mindset should be that you set up not as a Finnish or French company, but as a European company,” says Peter Saarlin, co-founder of Silo AI, a Finnish AI startup. In July, Silo sold itself to US chipmaker AMD for $665 million to accelerate its expansion.
The buzz in the slush was that President-elect Donald Trump’s return to the US and the threat of a more nationalist US could be a shock to Europe, prompting its political leaders and fund managers to invest more in future technologies. will force If not, Helsinki also risks becoming the new Venice.
john.thornhill@ft.com
