BCM has analyzed to its clients why Europe is lagging so far behind in technology.
In January 2022 Begin Capital Markets (BCM) introduced its project of TOP 10 European Technology Company. The broker, active in several European countries, thus responded to clients’ enthusiasm to learn more about European competitors of the US-based companies, which are notoriously leading the market.
BCM: Why Europe is really lagging so far behind in technology
BCM has analyzed for its clients why Europe is really lagging so far behind in technology. This gave rise to the idea of creating a list of top European companies that match their US and Asian competitors both in the strength of the technologies they provide, and the momentum they get in their market segment. What has BCM found out?
To some extent, no doubt, the old continent has passed the train in the technology sector. There are few European companies that have become key global players and are members of the top of the world.
The technology sector in Europe is very different from that in the United States or Asia. While US and Asian technology giants include relatively young companies, the structure of the European technology industry is much more diverse. On the one hand, it consists of companies whose history dates back to the 19th century, on the other hand, we also find young predatory individuals who entered the market only after the internet or mobile telecommunications were born.
- Europe is strengthening its investment presence in China.
- Porsche has published a prospectus for its stock market listing. And it has specified the price at which it will offer its shares
The group of “old” companies consists of Siemens, Nokia, Ericsson, and ABB, while the newer ones include SAP, Spotify, and Avast. However, such a structure in the technology sector seems to be relatively advantageous, as traditional and young companies can work side by side and can complement each other.
At the same time, we can say that the European technology sector has shown exceptional resilience. It is the example of companies such as Siemens, Ericsson, or Nokia that shows the ability to adapt to changing market conditions.
After all, Siemens started as a purely industrial company that was able to take advantage of the advent of electricity, and railways, but also modern technologies, and its products can now be found in almost all key industries. Other European technology companies, whose field of activity has changed radically over the last decades, have shown similar, perhaps even greater, flexibility.
The story of Spotify and Avast
Although Europe is not a global leader in technology, we find companies that can establish themselves on the world market. A shining example is the Swedish streaming platform Spotify, which enjoys the popularity of almost 400 million active users per month and is a competitive rival to American streaming services.
A similar story was written by the Czech software company Avast, which is the second largest in the antivirus protection market in the world with almost half a billion users. Ericsson and Nokia are at the forefront of building telecommunications infrastructure.
However, a characteristic feature of European technology companies is also their disproportionately lower market value compared to American or Asian competitors. Probably the most valuable European technology company is the Irish company Medtronic Plc., whose market capitalization exceeds 116 billion euros. This is even less than one-twentieth of Apple’s value and about 30% of Asia’s most valuable technology company, Taiwan’s TSMC.
This fact points to a huge gap in the investment set-up between Europe, the United States, and some Asian countries. The emergence of technology companies seems to be far more successful in the US or China than in any European country. What is the cause of such a situation, is certainly worth detailed scientific research, which BCM is undertaking for its clients. For more information get in touch with one of the leading European brokers.
About BCM Begin Capital Markets
BCM Begin Capital Markets CY Ltd. is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC), the supervisory and regulatory body for investment services firms in Cyprus, with CIF license number 274/15.
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