Tech Entrepreneur 'Brain-Drain' a Source of Concern

Europe is undergoing a significant technology entrepreneur brain-drain to the United States because it is not doing enough to retain information and communication technology (ICT) start-up companies.

A report by researchers from Imperial College Business School, initiated by the EIT ICT Labs found that ICT is a major economic driver for Europe. Between 2005 and 2010, investment in the sector accounted for one-third of all economic growth in the region, while ICT innovations bring positive, knock-on benefits for other industries.

The report - 'ICT innovation in Europe: Productivity gains, start-up growth and retention' - found that European countries are leading the way in nurturing talent, but do hardly enough to retain it. In fact, 43% of successful EU start-ups end up being acquired by US companies.

Dr Pantelis Koutroumpis, report author and Research Fellow at Imperial College Business School, said: "Technology entrepreneurs are vital to the economic success of Europe. While EU countries strive to create them, they do little to keep the most successful at home. The fragmented European digital market poses substantial legal, regulatory, linguistic and cultural barriers for promising ICT start-up companies to grow and remain in Europe."

While one quarter of the world's ICT accelerators - such as London's Silicon Roundabout - are located in Europe, the report found that the majority of such schemes lack coordination and a clear focus on systemic constraints.

Dr Koutroumpis added: "Europe, to a striking extent, misses out on the benefits from the growth and maturation of these high-impact companies. EU policy makers need to mobilise and maintain a sustainable entrepreneurship ecosystem in Europe. If this issue isn't tackled, the EU will continue to supply the US with an extremely scarce resource - individuals capable of creating high-growth firms."