Posted on Feb 29, 2020
The top bosses at Google, Facebook and Apple are nervously paying court to EU officials in Brussels, as the bloc’s lawmakers debate a new digital policy, including first-of-kind rules on the ways that artificial intelligence (AI) can be deployed by tech and social media companies.
The new regulations are likely to have far-reaching implications for many sectors, but the impact on tech giants could be game-changing— especially in light of Brussels’ recent attempts to increase oversight and regulate the use of AI, as well as to protect data and prevent misinformation on social media.
Two years ago, the EU introduced an extensive data protection framework (GDPR) for consumers, while last month the UK established a government watchdog to police social media platforms. Social platforms have been warned that they are likely to face tougher penalties in Europe if they don’t take a hard-line stance on hate speech and disinformation.
And yet, even as an increasingly tough regulatory environment poses a real threat to Silicon Valley’s European presence, the numbers of home-grown tech companies are soaring, with France carving out the biggest gains.
Paris leads the EU’s advanced start-up ecosystem
The country is fast emerging at the forefront of tech innovation. President Macron’s characterization of France as the continent’s de facto ‘start-up nation’ is already making it one of the most attractive investment destinations in the tech sector, including for overseas investors.
In the post-Brexit landscape, the EU27 are battling to usurp the UK’s tech crown and France has a head start. One important reason for the country’s rapid rise to prominence is that French start-ups—in sectors including mobility, social media and health — are succeeding in balancing the benefits of AI and machine learning while adhering to EU regulations.
Innovative French companies also enjoy plenty of support from tech hubs and incubators that offer fledgling firms the opportunity to thrive. Paris-based start-up hub, Station F, for example, provides a huge campus-style workspace that’s designed to make entrepreneurship more viable while creating a young talent pool that acts like a magnet for venture capital.
French companies reached record tech start-up funding levels in 2019, surpassing the previous year’s figure by almost a quarter. AI platform Meero raised upwards of €211 million last year, while human resources solutions specialist HR Path received a boost of nearly €100 million. And while Paris-based businesses account for the lion’s share of investments, other regional hubs – like Lyon – are gaining ground, too.
Tech companies scaling new heights: Yubo, Doctolib, BlaBlaCar
In the social space, Yubo, an app centred around sparking one-on-one conversations between like-minded young people ages 13-25, has quickly garnered 20 million global users. Prioritizing the safety of its young users, the French start-up uses innovative AI algorithms in its security features to verify age and detect inappropriate behaviour such as nudity in the livestreams the app offers.
Keeping in mind the EU’s concerns about online harms affecting young adults, Yubo uses a unique real-time intervention system which flags objectionable online behaviour. Because Yubo aims to educate its users about sensible online protocols and appropriate behaviour, rather than immediately shutting down a chatroom or an app, it first gives users an explanation highlighting where they fell short of community standards and time to modify their behaviour before disciplinary action is taken. Given this creative approach to moderating content, it’s no surprise that the start-up landed €11.2 million in its latest funding round, which it plans to invest in further security and customization improvements.
Online medical appointment management service Doctolib is also riding on a wave of success, thanks to a recent €150 million investment. The French-German company provides a low-entry scheduling service for health practitioners; its rapid rise to become the leading cloud service in the medical sector has fuelled expansion into new countries and new types of physicians. Last year, Doctolib launched a platform for doctor-patient video consultations and its viability as a company soared over the €1 billion mark.
There are also a number of prominent French start-ups targeting one of the fastest-growing markets in the world: travel and mobility. Just as Yubo deploys finely tuned algorithms and Doctolib’s success is due to the advanced booking management software developed by the company’s co-founders, the application of cutting-edge technology is enabling start-ups to optimise web and mobile apps. This is all part of a bid to transform the way people make their travel and transport arrangements. Founded more than a decade ago in Paris by Francis Nappez, Nicolas Brusson, and Frederic Mazzella, BlaBlaCar takes carpooling to the next level. It connects drivers of partly-filled cars – and now buses – with passengers looking for affordable, and social, transport options. The company, which has buses in 22 countries, has now reached unicorn status with a €1.6 billion valuation.
Leading the way in a tough market
France is demonstrating that despite a tough regulatory environment, its businesses are riding on a wave of booming investments, entrepreneurial talent and technological innovations. There’s no doubt that Macron’s prominent support has supercharged interest in the tech sector, with plans afoot for advancements that would encourage even greater enterprise – including the introduction of a four-year tech visa for overseas entrepreneurs and investors.
The start-up culture also appears to be migrating out of major cities — well-heeled incubator-accelerator UNIQORN has established a hub in the historic medieval town of Sarlat-la-Canéda in Dordogne, where, its founders claim, entrepreneurs can succeed commercially while enjoying a better work-life balance.
Even as American tech-giants like Facebook and Google are chiding the European Union for being too strict with their regulations — Silicon Valley venture capitalists are flocking to invest in French tech. With the ever-increasing number of French tech innovators, the government’s stated aim of creating 20 unicorns by 2025 might soon become a reality. The EU’s new digital strategy should aim at increasing oversight without curtailing the innovation in the tech sector which has made Paris a shining star of the global tech ecosystem.
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