Judith Gerlach: Demanding instead of promoting: finally take start-ups seriously!

When the World Wide Web went online around 30 years ago, developed at the European nuclear research center Cern, it stood for a great idea: universal access to information for everyone.

It is to be welcomed that the EU now wants to correct at least part of the undesirable development: Small and medium-sized companies from Europe are to receive at least 30 percent of the contracts in public tenders for the “Secure Connectivity Initiative” satellite program. This rate refers to orders with a volume of more than ten million euros.

With the initiative, Europe is building its own secure Internet supply via a satellite network and reducing the current dependence on US satellites. Being at the forefront of this important cutting-edge technology is crucial for our technological sovereignty in Europe.

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However, the 30 percent rule is only a first step that still has to be proven. Because at least with earlier satellite programs such as Galileo, there was no consequence if the quota remained unfulfilled.

This means that young companies run the risk of being ignored or simply becoming suppliers of innovations for established players. We must finally enforce fair competition in public procurement so that in the end it is the best provider that wins and not the biggest.

In Bavaria there are numerous highly innovative start-ups and medium-sized companies in the aerospace industry. Those who support them promote innovation and diversification.

Elon Musk led the way: With SpaceX, the multi-founder created one of the most influential players in the space business internationally. The company started with just 30 employees. Only Nasa orders with billions of euros in funding helped to achieve enormous growth.

The EU and Germany should also give more consideration to start-ups when awarding public contracts in the high-tech sector.

Concentrating on just a few tech providers is dangerous

After all, today’s market leaders like Alphabet also started out as start-ups. With often completely new offers, they met real needs, they achieved their market power through innovation and entrepreneurial skill. That inspires every founder – and also us in politics.

And it is precisely such opportunities that we should also offer start-ups from our homeland. At the moment, however, the innovative founders only have a small chance to show what they can do.

>> Read here: Trends from Silicon Valley: Start-ups are thriving in these areas despite the crisis

Public orders are often structured in such a way that only the large, established companies get a chance. This is taking us further and further away from the basic idea of ​​an open digital ecosystem that is accessible to everyone.

The downside of a narrowing of the market to a few providers that dominate everything can be seen clearly, for example, in social media: Concentration on a few platforms leads to a forced community because there are no longer any alternatives.

The well-funded and influential tech giants are sidestepping competitors, buying them up or copying their offerings. Also with regard to our democratic communication culture, the result is a delicate political and opinion-forming power, supported by consistently non-European platforms.

The US aerospace industry is showing how start-ups can be involved

With the Digital Markets Act, the EU has already passed a law that lowers the barriers to entry in markets dominated by technology giants. However, more accessible markets for small providers alone are not enough.

Let’s actively invite start-ups and medium-sized companies to participate in public procurement! Far beyond the satellite program that has already been decided, for example also with investments in digital infrastructure or the digital health and education system.

To do this, we have to break up rigid structures in public procurement and thus allow more innovations. At the moment, start-ups often don’t get through to the decision-makers with their ideas, since the basic requirements for participation in the order are far too high – for example, sales worth millions in previous years.

Here it is worth taking a look at the USA, more precisely at the space industry there. There, large orders are broken down into smaller tranches, for example a tranche for satellites for data transmission and a tranche for satellites for recording the earth.

Start-ups can get involved there, the entry hurdles are lower because of the lower order volumes. Several companies are commissioned for each tranche – both established players and start-ups.

The company that is the first to reach a previously defined milestone is awarded the contract for the next order.

This further increases the competition for the best ideas – and ultimately ensures better results and greater profitability. If a company does not manage to keep to the agreed budget for the tranche, one of the competitors receives its share.

This means that the state does not have to invest millions later, as was the case with the Galileo satellite navigation system and the Ariane launcher. The procurement system as a whole is becoming more resilient: if a bidder fails for technical or financial reasons, one of the other bidders takes over his part. All of this brings more competition and innovation.

Europe needs bold and innovative ideas

We don’t have to favor start-ups, it’s enough if we challenge them – in real and fair competition. This strengthens Europe as a location – with technological knowledge, jobs and tax revenue. Only with courageous and innovative ideas can Europe find its way back to the technological top.

But to do this, we have to rethink everything: At first glance, it may seem risky to entrust start-ups with large and significant projects. But the far greater risk would be not to do it.

>> Read here: Big throw or room for improvement? – Habeck’s founding plan for start-ups

Even if only every tenth start-up is successful in the long term, it could revolutionize an entire industry. Therefore: Let’s start with technologies where the world is already looking to Europe, such as New Space, quantum computing or robotics.

Germany and Europe should make greater use of their economic power so that young companies can grow – with subsidies and specific orders. In this way, we give SMEs and start-ups from Europe the chance for global success – and thus revive the promise of digitization from 30 years ago: that the best will prevail, not just the biggest.

More: European satellite constellation – Germany pushes through the participation of start-ups

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