Brexit not our problem? Think again.

June 27, 2016

I received a few intriguing comments on Friday’s fretful post about the worrisome consequences of Brexit for Europe’s innovation ecosystem.

One person affiliated with LaFrenchTech believes England’s departure from the EU will prove a boon to France’s tech scene. Another purported that Paris will now become the Continent’s rightful hub of Fintech.

I hope such a rosy outlook bears out, but I’m not so sure. In a very provincial sense, certain countries in Continental Europe may benefit from a relative shift in startup activity. Nordic or Baltic startups previously planning to base their operations in London may instead choose Amsterdam, Berlin, or Paris as their platform (or simply keep their headquarters at home).

Yet on the world stage, I fear the ramifications of Brexit for Europe will outweigh any short-term uptake. Europe’s appeal for foreign investment from Asia and North America derives largely from its outside perception as a unified, developed market. While nobody held any illusions about its heterogeneity, the differences among member states could be somewhat overlooked by outsiders attracted by Europe’s scale of disposable income and mass consumption.

europe-divided

The Brexit vote represents an acute reminder to the rest of the world that Europe is far from unified.

It is an exclamation point reinforcing a message that was subtly insinuated for years by well-meaning politicians. When LaFrenchTech fosters an atmosphere of rivalry, rather than one of collaboration, with London’s Tech City… When Berlin produces analytical league tables suggesting its superiority as a startup hub… these actions remind outsiders that Europe’s tech ecosystem is a collection of rivals, each with their own agendas, just like the political project of Europe itself. It reminds outsiders that Europe is complicated.

I mentioned on Friday in the wake of the Brexit vote how two Japanese tech actors decided to cancel their trips to France this week. Both were planning to attend the upcoming VivaTech conference at Porte de Versailles. “But VivaTech is in Paris. It has nothing to do with the Brexit!” one French political insider bewailed to me.

His exasperation demonstrates exactly my point. It’s easy on the inside to remain wrapped up in one’s own little local bubble. The very attraction of VivaTech for Japanese investors and entrepreneurs was its opportunity to be a starting point for a broader European rollout. I can understand their sudden apprehension, now that the fluidity of innovation across Europe is in question. Let’s not forget that last Thursday’s vote was called the EU Referendum.

Sometimes shocks can jolt politicians into doing the right thing. I hope the Brexit vote can galvanize more cooperation among the Continent’s disparate (but in the end, more similar than different) tech communities.

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posted in technology, venture capital by mark bivens

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