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The mood in Europe is gloomy, and it has nothing to do with Brexit (or the dreary weather). Over and over at the Fortune Global Forum, which concluded earlier this week in Paris, Europeans lamented their continent’s lagging performance in the digital economy. Globally dominant tech behemoths hail almost exclusively from the United States and China, much to the chagrin of Europe’s policymakers and business champions.
“We missed the boat,” said Prince Constantijn van Oranje, a member of the Dutch royal family and a proponent of Europe’s technology community, speaking on a panel about Europe’s “Silicon Valley,” which doesn’t exist. Europe has the smarts and the wealth and the market to be a tech leader. As Constantijn pointed out, the continent was a leader in GSM, yesteryear’s mobile-phone standard. What it needs now is a more vibrant entrepreneurial and venture-capital culture.
Instead, Europe has innovation in a less-than-helpful area for entrepreneurs: regulation. A trio of European regulators disagreed with the assertion, but there’s no escaping the fact that Europe is pioneering data protection with its landmark GDPR requirements even as it lags in digitalization. (And under the expanded powers of the European Union’s top digital regulator, Margrethe Vestager, the continent is about to double down on the former.) Said Constantijn: “We shouldn’t put ourselves on the back foot too quickly on GDPR. We should have much more flexible regulation.”
Regions with less mature regulatory regimes might make for better investments. Andre Maciel, a Brazilian managing partner in Softbank’s $5 billion Latin American fund, says he is focused on Brazil and Mexico, two markets with tech-savvy young consumers and better-than-average growth opportunities. And lightly regulated labor markets.
This edition of Data Sheet was curated by Aaron Pressman.