In memory of Roberto Saracco
It’s with profound sadness that we’ve learned of the untimely death of Roberto Saracco,…
On occasion of leaving his post as EIT Digital CEO, Willem Jonker gave us his views on the past, presence and future of EIT Digital, the evolution of the digital sector and his personal plans for the years to come.
At the time, I was working as Vice President for Research at Philips. I was approached with the proposal to become CEO and was explained the ambition of the EIT and of EIT ICT Labs, as it was called back then. Based on my own experience in innovation and European R&D collaboration, I was very much agreeing to EIT’s principles of giving more focus to bringing innovation from lab to market. In Europe we were already back then strong in R&D but also saw the need to turn it into economically viable solutions, both for business and industry, but also more general for the public good.
My decision to join was also supported by the high quality of partners involved in the KIC. I observed however that the co-founding partners entailed by and large incumbent actors, and realised that in order to be truly successful in the long run, it was important to also get the new economy on board. We could not just build on existing strong R&D collaborations, but had to integrate the new world of incubation, acceleration, and start-ups, and to complement the digital transformation agenda with a digital creation agenda of building the new economy in digital. Already then it became apparent that US players were taking over the market in mobile, Operating Systems, consumer platforms and software, and Europe was losing ground. My point of view was that focussing only on the transformation of existing companies would not be enough. And this was proven by the developments of the past decade and the observation that the global big tech players hardly stem from Europe anymore.
For EIT ICT Labs, now EIT Digital, this meant that next to the transformation of incumbent players we focussed on a targeted expansion of our ecosystem footprint – getting the venture creation part on board and building an acceleration program. This evolution took about seven years from the onset, from the original proposal. We chose an open attitude, expanded the General Assembly, and adhered to an inclusive 1-member 1-vote system to ensure the new economy felt integrated and welcome to participate.
During the first decade, we saw venture creation in Europe growing stronger, start-up innovation hubs being launched and – in certain application domains – new European unicorns emerging. We contributed to this positive development with our early portfolio, supporting a number of actors that later became unicorns. But our support back then was rather ad-hoc, not formalised, and we saw a clear need to professionalise our approach especially through the development of the EIT Digital Accelerator. This evolution was necessary both to improve the quality of our work and to support the financial sustainability of the organisation. When you have paying customers, they also have clear demands and that improves the quality of delivery.
We had a similar experience with our education programmes. These are nowadays a lot more focussed and customer centric, because they also have a prize through reduced scholarships and increased tuition fees. We had to substantially improve the quality of our programmes, but that led in return also to more motivated and satisfied students.
In both cases, our shifting approach has worked. We moved from pure transformation support to an offering that is much more impactful and sustainable on the market.
In the Innovation Factory, we were able to shift from incumbent transformational projects to venture creation with a start-up focus. This approach both supports our mission and our organisational sustainability by building up an equity portfolio. It was clear to us that if we wanted to be investable, then we were also forced to package our offer – often in form of a venture – in a way that makes it attractive to investors. We therefore complemented our activities in the Innovation Factory, that was mostly concentrated on transformational innovation, with a focus on venture creation. These days, we run better activities and increase our equity positions. The return of investment supports a revolving mechanism where future exits will fuel the next cycle of launched and supported ventures.
Looking at the big picture, there is gradually a shift in the venture landscape to deep tech. Earlier, the focus was on venture creation itself, regardless the technology behind, but now there is a shift towards ventures that exploit deep technology. This is also fuelled by the recognition that the societal challenges we are facing such as climate change, energy transition, migration, healthcare, or food shortage require deep technological innovations. These innovations will often be a combination of new materials, new instruments, new production mechanisms, and digital technology. The digital technology deployed does not always need to be revolutionary, but its application in a deep tech environment often leads to disruptive solutions. Next to that, there is of course also the deep tech innovation in digital technology itself, both in the hardware (quantum, photonics, semiconductors, etc.) and in software (AI, cybersecurity, 6G, etc.)
The shifting focus towards deep tech also means a change of investment. Deep tech investments go mostly into research and the development of new technologies, both activities that take time. Especially in the software domain this is something investors have to get used to, after their experience with software applications and platforms that developed much faster and where investments were mostly oriented towards capturing market share.
Next to the change in investment focus, there is also the changing attitude towards platforms like Facebook, Google, Twitter, or Amazon. Admiration has made place for scepticism. For platforms to remain relevant, market share is crucial, and in order to remain dominant players, platforms often try to lock in users – with all the negative consequences. As a result, governments started to develop regulation to harness platforms. And Europe has taken a leading role here with GDPR, DMA or DSA, to name a few.
A final change we witness is the acceleration of the digital transition. Drivers are the availability of advanced digital technology itself, but also major societal challenges around energy, mobility, health and food. For example, in Europe the car industry is rapidly moving to electric cars and in that transition speeding up the application of digital technology, both in the production process and the products themselves. Cars used to be built around combustion engines with a software layer around, but now they are essentially connected computers on wheels.
Well, I would say the glass is half empty, or half full if you will. Already 10 years ago, there was a lot of talk about the digital skills gap. This gap hasn’t closed, it rather became larger, but it would be wrong to assume we failed to produce more talent. The output of talents certainly has gone up, but at the same time the demand has exploded. And the existing education systems are not flexible enough to cope with this demand. We must therefore redesign the systems fast and comprehensively.
The increasing demand of new skills and competences was predictable, and the educational institutions have to ensure to be better prepared and provide systems that can deliver. As we state in our latest Makers & Shapers report, we need a better collaboration of private and public education providers and more resources. We have to bring more women into tech and increase STEM education at all levels, because our society is and will be relying heavily on high tech. We furthermore need more flexible and recognized certification systems and put stronger focus on lifelong learning. Politicians often pledge to change, but this change is not happening in a comprehensive manner. Systems have become more bureaucratic, but not necessarily more impactful. We see higher demands on monitoring and a lot of overhead tasks in education, but the systems are not challenging and training for the needed skills. Our energy needs to be redirected, with more delegation to lower levels and more freedom for educators and trainers.
EIT Digital is making a small, but relevant contribution to European efforts to close the digital skills gap. We supported universities quite successfully in developing their MOOC offer and thus reached hundred-thousands of learners. The Summer School is on a great track and ready to further scale up. The same holds for our Master School, which is definitely one of our flagships, with over the past years an average annual intake of around 300 students and ready to scale up to several thousand students in the next five years.
In a nutshell, we concentrated efforts on enhancing quality and supporting sustainability; now EIT Digital will focus on scalability as a priority. In our new strategy, we plan on tripling the number of students, universities and scholarships. To finance this effort, our ambition is to tap into the EU Digital Europe program and integrate our education activities in what we call (d)Academy, a one-stop shop for digital education and skills at various levels. With this, we will be a key contributor to the EIT’s Deep Tech Talent Initiative DTTI, that will skill one million people within European deep tech fields over the next years. In addition to scaling up, we will also seek to offer a more diverse set of professional school and summer school courses.
An important prerequisite for a diverse and inclusive European digital education system is a flexible and diversified certification system. Recognized certificates are essential both for quality control as well as recognition of individuals’ digital skills on the labour market.
I see a bright future for EIT Digital as a sustainable organisation, contributing to European digital innovation, entrepreneurship, education and skills. While the EIT financial support is diminishing, EIT Digital has been able to diversify its income and to build assets for the future. Together with the recent streamlining of the organisation, the mid-term strategy prepares EIT Digital for a strong position as a gateway to European digital innovation.
This shift from an EIT KIC to a European digital innovation and education organisation accelerates the expansion of the EIT Digital ecosystem, both in terms of geography and organisation types. For example, for certain deep tech partners like RTOs and corporate R&D centres, the EIT regulation and financial model didn’t always work, which unfortunately led to the departure of several of them. This is a concern since ecosystems need ‘animals’ of all kinds. The mid-term strategy makes EIT Digital again attractive to these partners since it supports next to EIT activities also non-EIT pan-European innovation and education activities that are not constrained by the EIT model.
I am convinced that industries and RTOs will reconnect to the EIT Digital ecosystem to play the role they are good in. For industries this means to industrialise digital solutions, invest in start-ups, scale them up, and give access to customers and markets. With our Access to Market offer in the Accelerator, we need to support our portfolio start-ups and help them reach out to big European corporates. For RTOs this means being the generators of start-ups, investing more in incubation and delivering their technical expertise via technology consultancy for and -injection in scaleups, because Deep Tech scaleups need constant tech input to evolve and grow.
At the same time, we will keep a strong footprint in the world of incubators, start-ups and scaleups. The established mechanisms to involve investors are working. Now we need to build on the existing investors network, maintain close relationships, and ensure that they give priority to deep tech investment.
There is of course never a good moment to say goodbye, but after 12 years with EIT Digital, a new and exciting challenge came by. As chairman of the Dutch national AI program, I will contribute to the successful application of AI in the Dutch society, which is an enormous opportunity to make use of the experience I have built up over the past decade. It is something close to my heart and an exciting challenge to contribute to a program from the early stage towards a solid future, as we did with EIT Digital. My key responsibilities include international relationships and at the European level EIT Digital will of course be on the radar, both when it comes to AI skills education and training, as well as Dutch AI innovation that can benefit from the international experience of EIT Digital.
It has been a great journey at EIT Digital on digital innovation, education and entrepreneurship in Europe, and I want to thank all colleagues at EIT Digital and our partners for the fruitful collaboration for more than a decade.
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