It’s clear that technologies such as blockchain and Artificial Intelligence (AI) will change our lives. What is less well-known, however, is just how much of this technology is being innovated in Europe. From Maastricht to Berlin to Tallinn, throughout universities, research centers and start-up businesses, some of the brightest minds are inventing products that promise to change everything from medical science to defense, to how we store information.
Why is this important?
European firms focused on AI and blockchain are set to learn more about how to benefit from a new EU investment fund aimed at boosting innovation in these two key technologies.
The new Artificial Intelligence and Blockchain Investment Fund was launched earlier this year and will finance the development of highly innovative artificial intelligence and blockchain companies as part of a wider move to create a dynamic EU-wide innovation ecosystem. Run by the European Investment Fund, the first phase of the fund will make available €100 million in 2020 to support companies working in this sector. The funds will be available to venture capital funds or other investors that support AI and blockchain-based products and services. A total of 300m EUR is expected to be generated from other private investors ‘crowding in’.
Why do we need to support blockchain and AI in Europe?
Europe is home to a world-leading AI and blockchain research community, with vibrant start-ups and a wide range of traditional industries looking to adopt innovative processes and models based on these technologies. Investment levels in Europe have traditionally lagged those in the US and Asia, however, and the aim of the fund is to narrow this investment gap and support the development of innovation in this field.
Developers and entrepreneurs wanting to grow their businesses ultimately end up recipients of US financing, working for US companies, and the job opportunities and economic growth these technologies bring head elsewhere.
An investment support programme will also be set up to complement the 100m fund, leveraging further financial support from EU Member States. The aim is to multiply investments at the national level by involving national promotional banks, incentivising private sector investments, and making Europe more attractive for start-ups to stay and grow in Europe.
This is a particular issue for companies based in central, eastern and south-eastern Europe. Recent research shows that due to difficulties with access to finance, nearly half of start-ups in this region choose to leave, and the European Commission, together with the European Investment Fund, has launched a pilot investment programme which leverages EU resources under the InnovFin Equity programme. The Digital Innovation and Scale-Up Initiative (DISC) provides finance for highly innovative high-risk digital start-ups across this region of Europe.
These initiatives will also allow co-investments with national promotional banks, which will increase the capital even further. The process will start from 2020. Investing in a portfolio of innovative AI and blockchain companies will help develop a dynamic EU-wide investors community on AI and blockchain.
This article was based on announcements made by the European Union.