The volatile currents of today’s geopolitics is characterized by trendy post on social media and overnight “change of mind”, shifting ripple through economies and societies. So, the timing of innovation has never been more critical.
Innovation, especially deep tech, operates on an hourglass, and public funding, if it is to truly fuel growth, must flow with the speed of sand, not molasses.
Grand pronouncements of European leaders like Ursula von der Leyen and Mario Draghi emphasize long-term strategies and increased funding for research and development. Thanks for this kind of endorsements, Regulators moved toward funding innovation. However, a fundamental truth often gets lost in the strategic rhetoric and crashes against reality: innovation, especially deep tech, operates on an hourglass, and public funding, if it is to truly fuel growth, must flow with the speed of sand, not molasses.
Clayton Christensen, in his seminal work on disruptive innovation, illuminated the delicate dynamics of market entry. He taught us that while incumbents often focus on sustaining technologies to serve their most profitable customers, disruptive innovations often emerge from new market segments, offering initially lower performance but at a compelling value proposition.
The “first-mover advantage” in these nascent, disruptive spaces is not about being the first to invent, but the first to establish a foothold and rapidly iterate to meet evolving market needs. This requires agility, an ability to “try, fail, learn quickly, and try again.” And have the funds to keep the company alive.
In the current real world, the “perfect timing” for a new technology to jump into the market is an even more precarious dance. The ongoing geopolitical turmoil, from supply chain disruptions to energy crises, creates both urgent problems and unprecedented opportunities for novel solutions.
A deep tech startup with a breakthrough in sustainable energy, advanced materials, or autonomous systems might hold the key to Europe’s strategic autonomy and economic resilience. But the window of opportunity is fleeting. Early market penetration allows for critical feedback loops, market validation, and the chance to build a competitive moat before others catch up. Delay, even by a few months, can mean the difference between market leadership and obsolescence.
This brings us to the precarious reality of public funding in Europe. While initiatives like the European Innovation Council (EIC) Accelerator, European Institute of Innovation and Technology (EIT) and its children, i.e. EIT Manufacturing, and increased budgets for deep tech are commendable on paper, the practical realities of accessing these funds pose a severe financial risk to innovative and deep tech startups.
The bureaucratic hurdles, protracted application processes, and slow disbursement of funds can leave nascent companies in a perilous “valley of death” between initial R&D and market readiness.
Deep tech, by its very nature, demands significant upfront investment and a longer time horizon for commercialization than conventional tech. They are building foundational technologies that require extensive research, prototyping, and rigorous testing. Startups are not competing with big conglomerates, rather with their laser focus on specific applicatioin, they serve as R&D organization for future M&A acquisition.
When public funding, which is often positioned as a crucial lifeline, arrives late or in tranches that don’t match the burn rate of these highly capital-intensive ventures, it becomes a liability rather than an asset.
Consider a startup developing a revolutionary AI technology to automatize operation efficiency in manufacturing processes. This is the source for competitive advantage of Europe in the current geopolitical landscape, dominated by Far East and the USA. They might secure initial seed funding, but to scale their technology into a viable prototype and then a commercially ready product, they need substantial, timely injections of capital.
If a promised public grant takes 12–18 months to materialize after approval, or if the disbursement is piecemeal and unpredictable, the startup is forced to stretch its limited private capital, potentially delaying critical milestones, missing market opportunities, or even facing bankruptcy.
This slow drip of funding, ironically, achieves the opposite of its stated goal: it stifles innovation, rather than fostering it. This poses a risk not the venture itself, rather the whole European deep tech ecosystem.
these pronouncements must be translated into tangible, rapid action at the operational level of funding bodies.
Ursula von der Leyen and Mario Draghi rightly speak of the need to boost Europe’s competitiveness, foster strategic autonomy, and lead in next-generation technologies. They emphasize streamlining regulations and increasing investment. However, these pronouncements must be translated into tangible, rapid action at the operational level of funding bodies.
A direct plea to European and local fund managers:
You hold the key to the future of Europe’s innovation ecosystem. The current geopolitical climate demands not just strategic intent, but tactical agility. If you truly wish to see Europe’s deep tech flourish and achieve its potential, you must be quick and lean in providing these much-needed funds.
This means:
1) Drastically shortening application and approval cycles.
2) Implementing faster and more predictable disbursement schedules.
3) Adopting a more risk-tolerant approach, acknowledging that deep tech has inherent uncertainties.
4) Prioritising a founder-friendly approach that reduces administrative burden and allows innovators to focus on building, not bureaucratic compliance.
Failure to act with urgency will not only lead to the demise of promising European deep tech startups, but will also contribute to the “burning ground” of an innovation ecosystem that could otherwise be a global leader.
The time for swift, impactful funding is now. The hourglass is ticking, and Europe’s future depends on the sand flowing freely.
