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Although the EU trails the US in small deep-tech businesses, Ireland is a strong performer thanks to Government supports.
Deep-tech businesses in the European Union are lagging behind their counterparts in the United States, according to a new report, with lack of access to finance and skilled talent cited as key reasons.
The joint report by the European Patent Office (EPO) and the European Investment Bank (EIB) on deep-tech innovation in smart connected technologies analysed global patenting activity by SMEs in the EU and US between 2010 and 2018.
It said that in areas such as the internet of things, cloud computing, 5G and artificial intelligence, described as fourth industrial revolution (4IR) technologies, SMEs based in the US “make a higher contribution to innovation” than ones in the EU.
It found that the US has more than twice as many SMEs with an international portfolio of 4IR patents than the 27 EU member states combined.
EU deep-tech SMEs contributed 10pc of international patent families – patent applications that are filed in at least two countries – in 4IR technologies invented in the EU. Meanwhile, their US counterparts accounted for 16pc of their country’s contribution.
Overall, the EU is the world’s third-largest contributor to international patent families after the US and Japan. However, the EPO and EIB report found that when it comes to 4IR technology innovation, the EU lags behind not just the US and Japan but also China and South Korea.
Ireland performs strongly
Within the EU, Germany, France and Italy have the highest number of deep-tech SMEs developing smart connected technologies.
But the report said that Ireland, along with other smaller countries such as Finland, Sweden and Denmark, is outperforming other EU countries and even the US, relative to its size, thanks to a high concentration of small 4IR businesses.
Of the non-EU European countries in the report, the UK, Switzerland and Norway also performed well in terms of the number of small firms developing smart connected tech, with the UK taking the top spot of all countries in Europe.
New smart connected technologies are expected to add €2.2trn to the EU economy by 2030, according to EIB vice-president Ricardo Mourinho Félix.
“European businesses are catching up with leading international counterparts, and investments in deep-tech innovation are crucial to further enhance Europe’s competitiveness in advanced digital technologies.”
The report highlighted that greater finances made available for deep-tech companies to invest in technology and talent will go a long way in bridging the gap between the performance of the EU and US.
The Irish deep-tech ecosystem is supported by Government initiatives such as the €500m Disruptive Technologies Innovation Fund (DTIF) administered by Enterprise Ireland, which aims to invest in disruptive tech solving national and global problems.
Last month, Tánaiste Leo Varadkar, TD, opened a new round of funding through DTIF, this time for companies developing technologies in the advanced and smart manufacturing space. The minimum funding request is €1.5m and the deadline to apply is 14 July.
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