Stay informed with free updates
Simply sign up to the Technology sector myFT Digest — delivered directly to your inbox.
Overawed European companies struggling to compete with domineering US rivals should draw inspiration from Airbus. Founded in 1970 through a mash-up of European aerospace interests, the ungainly multinational has become the industry’s most successful operator, drawing on the region’s strong research, design and manufacturing expertise.
Last year, the European company sold 2.3 times more commercial passenger jets than its once-dominant American rival Boeing, which has been plagued by production problems. Can European tech companies copy its example?
“The model can be replicated,” Airbus chair René Obermann tells me, although he adds that the way companies are built today is very different from how it was when Airbus was created. Cross-border, collaborative European businesses can be built in several sectors, including cloud computing, artificial intelligence, quantum and space, he suggests. But Europe also needs to revitalise — and celebrate — its culture of entrepreneurship and fully embrace different approaches to building businesses. “There has to be a cultural change: an appreciation that innovation is best done by start-ups that can take risks and fail,” he says.
Obermann was this week speaking at an event in Munich discussing how to build Europe’s first $1tn tech company to match the likes of Apple, Nvidia, Microsoft and Amazon. Europe’s need to reassert its technological sovereignty is becoming increasingly urgent as the US adopts a more carnivorous approach to trade, competition and geopolitics under President Donald Trump.
Munich is as likely a city as any in Europe to nurture a global tech giant — even if creating one worth $1tn looks a wildly remote possibility. The southern German city is home to a vibrant cluster of promising start-ups, including software groups Celonis and Personio, the space company Isar Aerospace, the AI-enabled drone manufacturer Helsing, and the nuclear fusion company Proxima Fusion, which hosted the event. Some have already become unicorns, valued at more than $1bn.
Several of these so-called Munichorns have emerged from the city’s two great universities: the Ludwig Maximilian University of Munich and the Technical University of Munich, which have long educated a stream of talented engineers. For the second year running, UnternehmerTUM, an offshoot of the technical university, topped the FT/Sifted/Statista ranking of European start-up hubs for its success in nurturing local entrepreneurs.
Ann-Kristin Achleitner, a professor at TUM, says that innovation occurs at the intersections between science, government, business and finance. With strong universities, a supportive Bavarian government and the established presence of BMW, Siemens and Allianz, Munich scores highly in the first three areas. But the city, like the rest of Germany, needs to activate more growth capital for start-ups if they are to compete with US rivals. “The major impact would be to change asset allocation,” she says.
More money will certainly be needed if Proxima is to realise its ambition of building a demonstration reactor by 2031, designed to replicate the nuclear fusion that powers the sun. The company estimates it will cost more than €1bn to build its Alpha stellarator plant and generate net energy from nuclear fusion in steady-state for the first time. “We are shamelessly shooting for the moon while trying to bring the power of the stars down to Earth,” Francesco Sciortino, Proxima’s chief executive, told the event.
The prospect, however distant, of becoming the first company to create a cheap, abundant and non-radioactive source of energy would be particularly transformational for Europe, which suffers from high energy prices. But the difficulties of building big, complex businesses were highlighted this week by the collapse of Northvolt, the Swedish battery maker that attracted $15bn of funding.
For decades, European leaders have talked a good game about promoting innovation. Yet the EU commission’s shelves are stacked with worthy, mostly unimplemented, reports urging completion of the single market and the capital markets union. Russia’s full-scale invasion of Ukraine and the Trump administration’s economic aggression may have finally galvanised the region. Germany’s incoming chancellor Friedrich Merz has vowed to do “whatever it takes” to boost defence and infrastructure spending.
With the political winds blowing on their backs, rather than in their faces, it is time for Europe’s founders to go big. They will now have to acquire new skills in managing rapid expansion.
john.thornhill@ft.com
