What if the next Silicon Valley is not in California?

Europe has failed to bring any competitive internet companies. If pressed, we think perhaps of Skype or Spotify, but nothing on the scale of Google or Amazon. This is an identity crisis for a continent that sees itself as open-minded and creative. And it is true that if the model for a successful internet company is the kind of monoliths Silicon Valley has produced – fueled by venture capital and ad sales, hungry for growth and more users, absorbing start-ups and competitors left, right and centre – then Europe has little to offer. But what if this is just one form of success? On closer inspection, the picture is different.

Look at digital games: King, whose hit Candy Crush Saga peaked at close to half a Billion players. The Angry Birds of Rovio is one of the biggest most popular games of all time and one of the fastest growing brands in entertainment. France’s Ubisoft is a top global developer and publisher of games with multi-million selling titles like Prince of Persia and Assassin’s Creed. Another French company – Vivendi – is a giant in media and entertainment (including games) worth over 25 Billion Euros on the Paris stock exchange.

The list goes on: the UK is Europe’s main exporter of games, Germany has some of the most successful social media game companies in the world (Wooga and Big Point). Even Belarus has global hit with Wargaming.net, now headquartered in Nicosia, Cyprus. The Asian games industry, particularly in Japan, China and South Korea, have made big investment bets on European games companies, as have Americans. The point is that there is not one but many successful companies, which is different from the behemoths in the Bay Area.

Also, games make money from their players, not buy selling user data to third parties. If a game is free, there is a micro-payment system in-game, rather than a data-mining ad economy. And if you don’t agree game companies are internet companies, at least they are born digital. So there it is, a home-grown digital success story with growth, jobs and foreign investment. And that’s just games, add fashion, literature, music, television, film, design, advertising, architecture and that message about how Europe is behind in digital is blurred by a much bigger message: Europe’s digital opportunity is in the creative economy, not in copying the surveillance economy of the top 10 internet companies. Why Europe is not in the top 10 is the wrong question. The right question is: how do we take full advantage of the promise of the creative economy? Answer that, next think about what policies will support that. The next Silicon Valley will not be in Silicon Valley, that is for sure. Play our cards right, it may very well be in Europe.

[First published as newsletter March 8 2016]