Startups side with Draghi: EU red tape hampers growth

“The EU’s regulatory stance towards tech companies hampers innovation,” former Italian Prime Minister Mario Draghi wrote in his landmark report on competitiveness, adding that the EU had about 100 tech-focused laws holding back its tech firms from competing globally in cutting-edge technologies, including AI.

Tech giants including Meta and Google have doubled down on that message with fierce lobbying campaigns warning European leaders that its regulatory roadblocks will cause the Continent to miss out on the boom in artificial intelligence.

The new tech survey echoed those warnings loud and clear. Sixty percent of survey respondents said the 2018 General Data Protection Regulation negatively affected the startup and scale-up environment, while 25 percent said it had no significant effect; only 15 percent said its effects were positive.

The Artificial Intelligence Act also scored poorly: Fifty-three percent said its effect was negative; 27 percent said there was no significant influence. Only 20 percent said it had a positive effect.

“Anything that is perceived to create … different sort of conditions versus your competitors operating in other markets is something that is ultimately seen to be a handicap versus a tailwind,” said Tom Wehmeier, a partner at Atomico.

The survey is part of a landmark yearly study by VC firm Atomico on European tech performance. It received about 3,500 responses.