Will there be world leaders in AI from Europe?
OPINION. Europe has certain assets that could allow it to stand out from its competitors in the field of artificial intelligence. By Jean-Marc de Fety, MSc Mines Paris, Senior Advisor
Jean-Marc de Fety
12th February 2024
Not a day goes by without talking about artificial intelligence (AI). Whether we see it as a powerful tool facilitating the existence of billions of human beings or whether we have reservations about it, the reality is there: AI is an essential player in today's world. today and even more tomorrow. This is why different regions of the world compete fiercely to develop the most innovative solutions.
Europe's assets
The Old Continent has certain arguments which should allow it to stand out from its competitors.
First of all, the size of its market, with 448 million Europeans compared to 370 million North Americans (including Canada). Then, its social model which protects its citizens in terms of health, unemployment and retirement. The complete opposite of American Darwinism which does not hesitate to leave the unlucky on the side of the road. Finally, the excellence of his university training, particularly in scientific fields (“European genius”). American companies do not hesitate to recruit the best in these fields.
However, it is clear that the development and management of effective and globalized solutions for this technology seem to elude Europe, leaving the field open to companies in the American market.
Weaknesses that penalize us
The first explanation for this delay is to be found in the fascination of too many European governing leaders and investors with the Darwinian capitalist model of Silicon Valley. In other words, it would be enough to have deep pockets and “win” with one investment out of ten, while letting the other nine die.
However, such an approach is not adapted to European standards. Firstly because it is not by copying a competitor that we can hope to overtake them. Second, because it requires extremely large funds. This is not possible on the scale of each European country, whose resources are less significant. Finally, because this model is not at all consistent with the European social ideal. This is illustrated by the protection of the most unlucky, in the light of deeply united values of our history, and which could also lead us to “mother” more start-ups.
The post-war period saw the emergence of “Rhineland capitalism” in the center of Europe. Principle according to which investors, often regional banks, play the long term with companies, avoiding short-term stock market pressures, and are remunerated by dividends rather than capital gains.
The doctrine of this capitalism is very different from that defended across the Atlantic: closer to our own social model and more adapted to the “pockets of capital” of each of the twenty-seven countries of the European mosaic.
The painful failure of Minitel
Minitel, launched in the early 1980s by the French national telecommunications operator, was created by brilliant scientists. This major technological innovation should have taken over, particularly in Europe, on the online services market.
This Franco-French success can today be relegated to the status of a relic, particularly in the face of what the Internet has become. There is a great risk that current European AI initiatives will suffer the same fate, because the lessons have not yet been learned.
The failure of Minitel, which should serve as an example not to be repeated, can be explained by four reasons:
- the absence within its management team of French managers who master the different business cultures of other European countries;
- the absence of employees from other major European countries;
- a disregard for the value that high-level salespeople could have brought, with overseas contacts established by scientists incompetent in the "Art of Commerce", imagining that "their product was so exceptional that it would sell all alone " ;
- an inability to ally with one of the main American players in this field, even if it means sharing the two markets.
The most funded AI start-ups today in Europe, including in France, present all these dysfunctions. The composition of their management teams is limited to brilliant national scientists, even if some have already worked for GAFAM. In summary, they have no mastery of the different “business cultures” of the European mosaic, nor any experience of “deals” with American players.
These start-ups will undoubtedly still have the possibility of obtaining significant market shares in their respective local markets, or even of being resold to foreign players, particularly American ones. But this would constitute a new failure in this area for Europe.
Raise wages and promote the European social model
The first hundreds of GAFAM employees all became millionaires. What's wrong with promising the same possibility in Europe? It is essential not to lose our talents, and even more so to attract those from the Asian and American continents.
And, in this profession, the role of remuneration is essential. Successful American technology companies have not hesitated to recruit exceptional salespeople at high prices to ensure their success. It is time to take this into account in Europe.
Furthermore, European players in the sector do not communicate sufficiently on the advantages of our social model. Such a level of protection in the areas of health, unemployment and retirement remains unique in the world. And that may be exactly what brilliant foreign scientists or salespeople are looking for.
Two salutary ways still possible
The picture is bleak if we consider the balance between Europe's strengths and weaknesses. However, two ways seem salutary for our continent in the AI market.
The first would consist of an emerging European player which would immediately ally itself with a counterpart already established in the United States in order to share the two markets, and to continue its development thanks to capital drawn from both sides of the Atlantic. Which would give every chance to a new Euro-American player to become a world leader in AI.
The second would be for the company to quickly conquer major European markets (notably France, Germany, Benelux and Italy), in order to establish barriers to entry. The sine qua non condition for success in this direction would lie in the addition, within its management team, of the collaboration of a professional mastering the business cultures of the countries mentioned. .
Only in this way can we create future global AI leaders in Europe. It will certainly take time to achieve this, but the challenges, not only economic, but also obviously geopolitical, force us to act now.
Jean-Marc de Fety
Jean-Marc de Fety
12th February 2024
Not a day goes by without talking about artificial intelligence (AI). Whether we see it as a powerful tool facilitating the existence of billions of human beings or whether we have reservations about it, the reality is there: AI is an essential player in today's world. today and even more tomorrow. This is why different regions of the world compete fiercely to develop the most innovative solutions.
Europe's assets
The Old Continent has certain arguments which should allow it to stand out from its competitors.
First of all, the size of its market, with 448 million Europeans compared to 370 million North Americans (including Canada). Then, its social model which protects its citizens in terms of health, unemployment and retirement. The complete opposite of American Darwinism which does not hesitate to leave the unlucky on the side of the road. Finally, the excellence of his university training, particularly in scientific fields (“European genius”). American companies do not hesitate to recruit the best in these fields.
However, it is clear that the development and management of effective and globalized solutions for this technology seem to elude Europe, leaving the field open to companies in the American market.
Weaknesses that penalize us
The first explanation for this delay is to be found in the fascination of too many European governing leaders and investors with the Darwinian capitalist model of Silicon Valley. In other words, it would be enough to have deep pockets and “win” with one investment out of ten, while letting the other nine die.
However, such an approach is not adapted to European standards. Firstly because it is not by copying a competitor that we can hope to overtake them. Second, because it requires extremely large funds. This is not possible on the scale of each European country, whose resources are less significant. Finally, because this model is not at all consistent with the European social ideal. This is illustrated by the protection of the most unlucky, in the light of deeply united values of our history, and which could also lead us to “mother” more start-ups.
The post-war period saw the emergence of “Rhineland capitalism” in the center of Europe. Principle according to which investors, often regional banks, play the long term with companies, avoiding short-term stock market pressures, and are remunerated by dividends rather than capital gains.
The doctrine of this capitalism is very different from that defended across the Atlantic: closer to our own social model and more adapted to the “pockets of capital” of each of the twenty-seven countries of the European mosaic.
The painful failure of Minitel
Minitel, launched in the early 1980s by the French national telecommunications operator, was created by brilliant scientists. This major technological innovation should have taken over, particularly in Europe, on the online services market.
This Franco-French success can today be relegated to the status of a relic, particularly in the face of what the Internet has become. There is a great risk that current European AI initiatives will suffer the same fate, because the lessons have not yet been learned.
The failure of Minitel, which should serve as an example not to be repeated, can be explained by four reasons:
- the absence within its management team of French managers who master the different business cultures of other European countries;
- the absence of employees from other major European countries;
- a disregard for the value that high-level salespeople could have brought, with overseas contacts established by scientists incompetent in the "Art of Commerce", imagining that "their product was so exceptional that it would sell all alone " ;
- an inability to ally with one of the main American players in this field, even if it means sharing the two markets.
The most funded AI start-ups today in Europe, including in France, present all these dysfunctions. The composition of their management teams is limited to brilliant national scientists, even if some have already worked for GAFAM. In summary, they have no mastery of the different “business cultures” of the European mosaic, nor any experience of “deals” with American players.
These start-ups will undoubtedly still have the possibility of obtaining significant market shares in their respective local markets, or even of being resold to foreign players, particularly American ones. But this would constitute a new failure in this area for Europe.
Raise wages and promote the European social model
The first hundreds of GAFAM employees all became millionaires. What's wrong with promising the same possibility in Europe? It is essential not to lose our talents, and even more so to attract those from the Asian and American continents.
And, in this profession, the role of remuneration is essential. Successful American technology companies have not hesitated to recruit exceptional salespeople at high prices to ensure their success. It is time to take this into account in Europe.
Furthermore, European players in the sector do not communicate sufficiently on the advantages of our social model. Such a level of protection in the areas of health, unemployment and retirement remains unique in the world. And that may be exactly what brilliant foreign scientists or salespeople are looking for.
Two salutary ways still possible
The picture is bleak if we consider the balance between Europe's strengths and weaknesses. However, two ways seem salutary for our continent in the AI market.
The first would consist of an emerging European player which would immediately ally itself with a counterpart already established in the United States in order to share the two markets, and to continue its development thanks to capital drawn from both sides of the Atlantic. Which would give every chance to a new Euro-American player to become a world leader in AI.
The second would be for the company to quickly conquer major European markets (notably France, Germany, Benelux and Italy), in order to establish barriers to entry. The sine qua non condition for success in this direction would lie in the addition, within its management team, of the collaboration of a professional mastering the business cultures of the countries mentioned. .
Only in this way can we create future global AI leaders in Europe. It will certainly take time to achieve this, but the challenges, not only economic, but also obviously geopolitical, force us to act now.
Jean-Marc de Fety