The document presents an overview of the European startup ecosystem, highlighting the significance of digital startups and their contribution to economic growth, particularly in advanced economies. It discusses the funding landscape in Europe, noting the challenges in venture capital investment compared to the US and the emergence of crowdfunding. Additionally, the rise of acceleration programs and the influence of corporates, universities, and public policy on entrepreneurship is examined.

1. Jessica Stacey, Nesta
Digital Venice, 08 July 2014
The European Startup
Ecosystem
A quick look at the stats

2. Contents
1. The big
picture
2. Show me
the money
3. Nurturing,
networks
and support
4. The wider
ecosystem

3. 1. The big picture
What we know about digital
startups

4. High growth firms matter
Source: Vital Growth (NESTA, 2011), based on the ONS Business Structure Database
2002-05 2005-08 2007-10
Firms New jobs
Job creation by existing UK businesses
Firms New jobs Firms New jobs

5. New enterprise
creations
Source: OECD, Entrepreneurship at a
Glance, 2013
50
60
70
80
90
100
110
120
130
140
Norway Netherlands Russian Federation Spain Sweden United Kingdom United States
50
60
70
80
90
100
110
120
130
140
Australia Belgium Denmark Finland Germany Italy
90
110
130
150
170
190
France
UK
Sweden
Norway
US
Russian
Federation
Spain
Australia
Belgium
Denmark
Italy
Germany Finland

6. Innovation in digital tech is reaching a
tipping point
Digital technologies accounted for more than 21% of GDP growth in
the world’s most advanced economies in the past five years.1
Europe’s digital economy is expected to grow seven times faster than
overall EU GDP in coming years. 2
The Boston Consulting Group estimates that the digital economy will
contribute a total of $4.2 trillion to the G20’s total GDP by 2016, which
means that if the Internet were a national economy, it would rank in
the world’s top five, behind only the US, China, Japan and India – and
ahead of Germany.
1 Matthieu Pélissié du Rausas et al., Internet Matters: The Net’s Sweeping Impact on Growth, Jobs, and Prosperity (San Francisco, McKinsey Global
Institute, 2011).
2 European Commission, Copyright: Commission Urges Industry to Deliver Innovative Solutions for Greater Access to Online Content, IP/12/1394
(Brussels: European Commission, 2012).

7. European ICT Poles of Excellence
Source: European Commission JRC-IPTS

8. 2. Show me the money
The funding environment in Europe

9. The three main areas of early stage
investment in Europe
Source: EBAN: Statistics Compendium 2014

10. European VC investment continues to
lag the US as a share of GDP
0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
VC investment as a share of GDP
UK US CE

11. Crowdfunding - it’s big business...
$2.7 Billion
$945
Million
...and it is taking off in
the Europe
Raised in Europe through
crowdfunding in 2012
Raised globally through
crowdfunding in 2012
Source: Massolution 2012 figures

12. $2.7bn in 2012, predicted to have
almost doubled in 2013
Source: Massolution

13. 3. Nurturing, networks & support
The rise of incubation for early stage ventures

14. Growth of accelerator programmes
14
• 53 programmes in Europe
• 703 companies accelerated
• 2034 jobs created
Source: www.seed-db.com, March 2014
www.startupfactories.eu

15. Accelerator and Incubator Ecosystem in
Europe, 2012, Telefonica

16. 4. The wider ecosystem
The impact of big corporates,
universities and public policy

17. 17
More corporate accelerators

18. More corporates involved in VC

19. Entrepreneurship & innovation in
Universities
Source: Graham (2014), Creating University Based Entrepreneurial Ecosystems, MIT Skoltech Initiative

20. Public policy
Procurement
Investment
incentives
Digital single
market
Education

21. • Atlantic Drift, 2011, Nesta, http://bit.ly/1r4Wh18
• Crowdfunding Industry Report, 2012, Massolution, http://bit.ly/1maVnj5
• European Commission, Copyright: Commission Urges Industry to Deliver Innovative Solutions for Greater
Access to Online Content, IP/12/1394 (Brussels: European Commission, 2012).
• European Digital Forum, http://www.europeandigitalforum.eu
• Graham, R., Creating University Based Entrepreneurial Ecosystems, (MIT Skoltech Initiative , 2014).
• Mapping the European ICT Poles of Excellence, 2014, European Commission JRC-IPTS, http://bit.ly/Rlw0yZ
• Matthieu Pélissié du Rausas et al., Internet Matters: The Net’s Sweeping Impact on Growth, Jobs, and
Prosperity (San Francisco, McKinsey Global Institute, 2011).
• OECD Entrepreneurship at a Glance, 2014, http://bit.ly/1tia9sS
• Startup Europe Partnship, http://startupeuropepartnership.eu
• Startup Factories, Nesta, http://www.startupfactories.eu
• Startup Manifesto, http://startupmanifesto.eu
• Statistics compendium 2014, EBAN, http://bit.ly/U0aCQt
• The Accelerator and Incubator Ecosystem in Europe, 2013, Telefonica, http://bit.ly/1rKXHAr
• The European Seed Accelerator Ecosystem, 2014, Jed Christiansen, http://bit.ly/1qQAwV2
• The Rise of Corporations in Tech Venture Capital Investment, 2013, CB Insights, http://bit.ly/1qFViFf
• Unchaining Investment, 2013 Nesta, http://bit.ly/1lPO6A6
• Vital Growth, 2011, Nesta, http://bit.ly/1pWcx7j
References

22. jessica.stacey@nesta.org.uk
@JessStacey
www.nesta.org.uk